Are Plymouth Landlords Profiteering?
The private rented sector for both Plymouth landlords and Plymouth tenants is facing immense challenges, with a shortage of available homes for rent putting renters under significant pressure.
And you can see why when the average UK rent in 2021 was £1,381 and in 2023 it has been £1,706, an increase of 23.53%.
Let’s look closer to home in the Plymouth area.
The average rent for homes coming on the market in the Plymouth area in 2021 was £749 per month, whilst in 2023, it has been £883 per month.
(Plymouth area PL1 to PL9).
You can see why people are accusing landlords of “widespread profiteering”.
But as always, the devil is in the detail.
This increase in average Plymouth rent is for new tenancies, not tenancy renewals.
A new tenancy is when a brand-new tenant moves into a home, whilst a renewal is when an existing tenant renews the lease with their existing landlord.
Government data shows that most landlords are not exploiting the mortgage crisis, with 64% of landlords maintaining and 4% decreasing rents to shield renters from the impact on renewal of their tenancy agreement, dispelling the notion that they are exploiting the situation.
Looking at the same Government data, of the landlords setting rents for new tenants, just under half of landlords (45%) stated they increased the rent compared to the previous tenancy with the old tenant, whereas a third (35%) kept the rent they charged at the same level, and surprisingly 1 in 12 (8%) decreased the rent.
Therefore, whilst the average percentage growth in Plymouth for new tenancies is 17.9%, the overall average for all tenancies is only 4.6% for Plymouth.
And 4.6% is much lower than the rate of inflation.
Contrary to popular belief, landlords’ profit margins have significantly dwindled in recent years. The profits for private landlords are at their lowest since the Credit Crunch due to rising mortgage rates and limited tax relief. This demonstrates that private landlords are not profiteering during the cost-of-living crisis.
Now some of you will say, Plymouth house prices have risen in that time. Yes, that is the case, yet not by the rate of inflation, so in fact in ‘real’ terms, their investments have gone down in value.
Landlords are often portrayed negatively in the media but are in fact making considerable efforts to provide safe and secure housing for millions of tenants.
Landlords face growing costs, including increased mortgage payments and the negative impact of a tax system that discourages investment in the rental market. These challenges are further exacerbated by ongoing uncertainty surrounding reforms to the law regarding landlords.
With limited options available, landlords must choose between leaving the private rented sector, increasing rents as a last resort, or absorbing mounting costs. However, the latter is nearly impossible for most individual landlords who lack deep pockets. To address these challenges, the Government must provide crucial support to the rental market.
To alleviate the burden on renters, the Government should reconsider current taxes which are designed to discourage landlords from providing more rental homes. It is vital to ensure that the supply of rental properties does not further diminish, as Plymouth tenants simply cannot bear the consequences of a dwindling market and it will lead to further housing hardship.
Without proper government support, both renters and landlords will continue to face challenges, caught between a rock and a hard place.
Housing is such an important thing (rather like the NHS), and I would urge all parties, to move beyond rhetoric and take positive action to support the private rented sector.
I know many Plymouth landlords who are making sincere efforts to shield Plymouth renters from the mortgage crisis, and it is crucial their contributions are recognised.
By fostering an environment that encourages investment and providing support to renters, the Government can help alleviate the strain on both landlords and tenants and ensure a sustainable and fair rental market for all.
These are my thoughts, what are yours?
