I was having a most interesting chat the other day with a Rotherham landlord when we were looking at a property.
We got talking about the Rotherham 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 could mean for Rotherham.
Well my blog reading friends, some commentators said last winter that buy-to-let was about to die due to 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 Rotherham? The fact is, as a country, we are facing a precarious rental shortage and need to get Rotherham building in a way that benefits a cross-section of Rotherham 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 nearly 46,000 households in Rotherham, currently 12,900 tenants live in 5,400 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 Rotherham needs to rise by 2,300 (i.e. 42.8%), which would take the total number of rented properties in the city to 7,700.
That means Rotherham landlords need to buy around 250 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 5,500 people will want to live in all those ‘additional’ Rotherham 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 on just home ownership to solve our housing issues, saying “we need to build more homes of every single type and not focus on one single tenure.”
The private rented sector became a stooge under David Cameron’s watch. With increasingly unaffordable Rotherham house prices, the majority of new Rotherham 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 Rotherham society who are already struggling. Let’s hope this new Government continues to see the contribution landlords give to the country as a whole.
Whatever the future has in store for the Rotherham property market, you can find the latest news and insights on this blog as well as my Facebook and Twitter sites. Follow the Rotherham Property Blog today!
