In a year that has seen predominantly good news for landlords there have been some worrying signs as the significant benefit cuts imposed by the government have started to impact buy to let landlords in some parts of the country. Not surprisingly, as these benefits have been cut, the number of landlords who felt confident about letting to housing association tenants has fallen. The National Landlords association reported as many as 53% now felt they wouldn’t be able to profit from renting their units out to Local Housing Allowance tenants. With worrying signs that this period of austerity will continue for some time, landlords will need to reassess their strategies.
Many Landlords Threatening to Leave the Sector
One of those strategy adjustments is to simply exit the LHA tenant sector. This puts pressure on badly needed housing supply and makes life more difficult for those on low incomes. Many tenants had previously been able to live with their families, near work, in a suitable dwelling but will now need to move into commuter towns, further from work, in order to afford housing. This not only puts additional strain on already creaking transport infrastructure but takes profit from landlords and money from the pockets of those who need it most.
It’s concerning that so many landlords appear to be planning to withdraw from the LHA market within just three years, as they can no longer afford to let their properties to tenants at the reduced benefit rate.
David Salusbury, Chairman, National Landlords Association
Buy to Let Business Has Continued to Grow
It’s not all doom and gloom for landlords, however as despite this setback business is largely reported to be increasing by most major lenders and indeed the return of big names like Abbey to the sector are a sign of things to come. Many landlords will, however, continue to feel frustrated that efforts to operate in any ‘niche’ markets such as housing association, limited companies and HMO mortgages continue to be thwarted by legislation or changes to the benefit state.