The result of a survey by ARLA Propertymark shows that 2.7% of the 1000 landlords who participated in the study have shifted from privately renting their properties to short-term leases, and the reason is the growing pressure from government regulations: removal of the tax relief, additional stamp duty, and ban on tenant fees.
If the figures from the survey were to be applied across the UK, there will be 46,000 less homes available for prospective long-term tenants, numbers which could heavily affect the already strained housing supply and raise the prices. As with any commodity, in this case, a property, when the supply is low, the prices go up.
Other findings from the survey is as follows:
* Short-term letting via online platforms has grown quickly over the past decade, with around 225,000 active listings on one site alone in 2017/18
* 16% of adults in Great Britain have let out all or part of their property on a short-term basis over the past two years;
* Most commonly they have let out their main residence, but over 3% of people have let out a property they own but don’t usually live in
* The scale of short-term letting activity varies widely between locations
* The number of listings in the London Borough of Westminster was equivalent to 6.7% of its total dwelling stock compared to 0.2% in the London Borough of Havering
ARLA Propertymark’s chief executive, David Cox says: “The growth in short-term lets is particularly concerning for the traditional private rented sector.
“As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this.
“Unless the sector is made more attractive, landlords will continue to exit the market resulting in less available properties and increased rent costs.”
In light of the findings of the survey, ARLA Propertymark has the following recommendations for the government to consider before imposing future regulations that could encourage landlords to totally abandon the private rental sector:
* Carefully consider the impact of any future regulation that may incentivise landlords to start using their properties for short-term lets and thereby reduce housing supply for local people trying to find a home
* Ensure a level regulatory playing field between short-term and long-term lets, including protections for tenants and health and safety requirements
* Ensure a level taxation playing field between short-term and long-term lets so there are no advantages for commercial landlords using their properties for short-term lets
* Identify ways to improve enforcement of cases in which commercial landlords are not complying with local planning laws or the 90-day limit for short-term lets in London
* Recognise the impact of short-term lets on housing supply is not uniform across the country and ‘one size fits all’ regulations are unlikely to be optimal
* Distinguish between using one’s primary residence for short-term lets when the property is being under-utilised and commercial landlords renting out entire properties on a full-time basis
* Monitor and track the number of entire properties on sharing platforms by hosts with multiple listings in different areas to inform future policy
* Consider introducing limits on short term letting activities in areas in which there is a demonstrable impact on private-rented housing supply