Light at the end of the tunnel?

We certainly weren't expecting that! Michael Gove seemed to hint at a tax review for landlords in exchange for more regulation in the private rental sector.

After years of being treated as a political football and a tax cash cow, it was a welcome change to hear his remarks in the the Budget debate. Mr. Gove told MPs that in order to ensure the supply of affordable rental homes they also needed to ensure there was fairness in the tax treatment of landlords. He offered no further detail, but implied that this would be tied to the forthcoming rental reform legislation.

He also set out the government's position on rent controls in England, saying "A rent freeze, while often attractive, has the effect, as we have unfortunately seen in Scotland, of reducing the supply of rented homes."

This follows a response in November by the then Housing minister Felicity Buchan to the Select Committee in which she acknowledged "demand is currently outstripping the supply of properties available to let". 

More chinks of light

Rents continue to rise

Zoopla's monthly rental report shows that rental enquires are 10% higher than a year ago, but the supply of rental homes is down by a third as fewer renters become first time buyers. Consequently, average rents for new lettings are up by 11.1% year-on-year.

Mortgages continue to fall

Rightmove's mortgage analysis confirmed that fixed rates continue to fall after the turbulence of late 2022. They expect that they  will fall further as the year progresses. The buy to let market is now receiving more attention from lenders. By way of example, The Mortgage Works, the buy to let arm of Nationwide is offering a five year fixed rate for a 55% loan-to-value at 4.07%. That involves a rather steep 3% arrangement fee, but at a more modest £1,495, the rate is 4.47%

Rental reform legislation imminent

It was always stated that rental reform legislation would be brought to the House during this parliamentary session. Michael Gove appeared to confirm this when he said that we could expect to see it within 'a couple of months', though this contradicts his housing minister who just two weeks ago suggested the autumn. Either way, sight of the legislation would bring much needed certainty to the private rental sector.