Wendy Peterman, one of our truly local estate agents, has posted an interesting comment on the rental housing shortages in Herne Hill (and nationally).
Based on current trends in the property market in terms of growth of the population – Brits living longer, the lack of new homes being built, and the reduction in social housing (aka council housing) – demand for homes in the private rented sector needs to increase nationally by 227,000 homes per year, she says.
So, based on those numbers, Herne Hill theoretically needs to have an additional 72 private rented properties per year.
Problem: the number of private rented properties in Herne Hill has instead reduced from 2,535 in 2017 to 2,399 in 2021, a net loss of 135.
Wendy’s blog unpacks the reasons, as she sees them, for this trend in private renting, and the possible upturn in rentals: see the full blog here .
But maybe that’s not the whole story…
Firstly, some of us might add that the stupendously high cost of buying a flat or a house in London (where the ‘average’ deposit, according to one of this morning’s papers now stands at over £115,000) must inevitably push people towards the rental market, thus stimulating yet more demand in excess of supply, creating that frantic and highly competitive search for a decent rented flat that afflicts so many people these days.
And secondly, landlords are facing an imminent change in the landlord/tenant law which is hardly calculated to ease the supply of rented accommodation.
Until now, landlords have had the right to terminate a tenancy and repossess the property – either because they want to sell it or live in it themselves, or perhaps because the tenants have proved unsatisfactory, or even because they believe that they could get higher rental income with a new tenant.
But the government has today now confirmed its plans (trailed in the Conservative 2019 election manifesto) to change the law that until now has allowed such so-called Section 21 “no-fault” evictions. This has alarmed some landlords and likely making them much more cautious when choosing tenants.
The National Residential Landlords Association, a trade body, has warned that abolishing Section 21 would make tenants feel less obliged to pay rent. “For the new system to work, the Government needs to ensure it includes clear and comprehensive grounds upon which landlords can legitimately repossess properties,” he said.
The NRLA went on to say that “This should include a mandatory ground for serious rent arrears. It would be unacceptable if the new system gave any signal that paying rent was an optional extra.”
A medium-term consequence of scrapping Section 21, some landlords believe, is that it will also make it much harder for lower income tenants to find properties, particularly amid a chronic shortage of rentals. Some landlords had already started evicting tenants ahead of the abolition of Section 21 being put into effect.
Landlords are not a popular constituency for any government to protect, but if the costs and complications of renting continue to mount, this would be another reason why the rental market is shrinking, or increasingly available only to more prosperous and financially reliable tenants.