I was having a most interesting chat the other day with a Hull landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Hull, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don’t charge for that, and you don’t even need to be a client of mine. We got talking about the Hull Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Hull.
Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!
Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Hull? The fact is, as a country, we are facing a precarious rental shortage and need to get Hull building in a way that benefits a cross-section of Hull society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.
Of the 124,500 households in Hull, currently 53,200 tenants live in 23,900 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Hull needs to rise by 10,300 (i.e. 42.8%) .. taking the total number of rented properties in the city to 34,200.
That means Hull landlords need to buy around 1,100 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 22,800 people will want to live in all those ‘additional’ Hull rental properties – so why is the government penalising landlords?
Thankfully the new housing minister Gavin Barwell detached Teresa May’s new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying “we need to build more homes for every single type of person needing a home and not focus on one single tenure”. The private rented sector became a stooge under David Cameron’s watch and still, with increasingly unaffordable Hull house prices, the majority of new Hull households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Hull society who are already struggling. Let’s hope this new Government continues to see the contribution landlords give to the country as a whole.
