I was having a most interesting chat the other day with a Sutton landlord when we were looking at a property. We got talking about the Sutton 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 Sutton.
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 there are 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 Sutton? The fact is, as a country, we are facing a precarious rental shortage and need to get Sutton building in a way that benefits a cross-section of Sutton 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 28,300 households in Sutton, currently 13,400 tenants live in 6,100 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 Sutton needs to rise by 2,600 (i.e. 42.8%) .. taking the total number of rented properties in the city to 8,700.
That means Sutton landlords need to buy around 300 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 5,800 people will want to live in all those ‘additional’ Sutton rental properties – so why is the government penalising landlords?
Thankfully the new housing minister, Mr Gavin Barwell, detached Mrs Theresa May’s new administration from the Mr Cameron’s/Mr Osborne’s 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 Mr David Cameron’s watch and still, with increasingly unaffordable Sutton house prices, the majority of new Sutton 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 Sutton society who are already struggling. Let’s hope this new Government continues to see the contribution landlords give to the country as a whole.
