Is the tide turning for the lettings industry?

It’s been quite a week for the rental sector.

Lettings agents and landlords have had such a torrid time in recent years that it’s easy to exaggerate the significance of a few events which, in less extraordinary times, would go unremarked.

But after so many government measures aimed at protecting tenants above landlords, and against a long-term backdrop of tax and regulation changes pitched against buy-to-let, this week’s flurry of good news is as welcome as it is surprising.

Let’s go through it one by one...

Firstly, the Queen’s Speech. Of course, it’s committed the government to a White Paper and eventually more ‘reform’. However, there was no immediate legislation to scrap S21 which many expected, and the vagueness of the government pledge leaves the door open to less draconian anti-landlord measures than many feared.

Property lawyer David Smith says the White Paper and broad reform pledge is “a much weaker offer” than was expected - there’s a lot to play for and any legislative change is now likely to take two years to conclude.

Secondly, the eviction ban and possession notice wind-down. We’re only talking, of course, about a return to the state of play that existed before the pandemic - that should happen in October, says the government, providing the virus roadmap holds firm.

This may not represent absolute progress but few would have been surprised had there been another extension of the ban and the six month notice. But no - the government appears to have listened to the lettings industry rather than Generation Rent and that’s a 180 degree turn from the recent past.

Thirdly, the rental market is improving. Zoopla says rents outside London are rising at an average three per cent per year, the highest since late 2018. Rents are rising fastest in the North East (up 5.5 per cent) and the South West (5.3 per cent) - the strongest growth in a decade amid increased demand and constrained supply.

And lettings agency Hamptons says that last year some 131,900 properties were sold by landlords in Britain, the lowest figure since 2013. On top of that, a survey of 500 landlords by property consultancy Knight Knox found over a quarter planning to expand their property portfolio in the next 12 months.

Fourthly, a serious political debate on the rental sector may now be possible. Why? Because Labour has this week appointed a serious politician as shadow housing minister.

Lucy Powell may be in a party looking highly unlikely to grab power anytime soon, but she has been a respected minister, is typically well-briefed and politically nuanced - and in fact she’s a landlord too.

Industry figures speaking off the record have not always felt the same about her predecessor, so expect the debate about the future of renting in parliament and outside to become more intelligent.

One cuckoo doesn’t make a spring, so the old cliche goes. And a week of optimistic news doesn’t mean the government will restore the private rental sector to the status it had in the past, and indeed the status it still deserves as the provider of homes to 20 per cent of the population.

But it may just be that we’ll look back on early May 2021 as the time the Ministry of Housing, Communities and Local Government and HM Opposition started working with the lettings industry instead of parroting the slogans and half-truths of its opponents.

*Editor of Estate Agent Today, Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn