A prominent rental market analyst warns that parts of the Labour Party’s proposed reform bill cast “dark shadows” over the rental sector, leaving few landlords at ease given the potential threats to their investments.

Doug Shephard, director of the website Home – a listings platform that also produces respected monthly market analysis for the rental and sales sectors – says the new government’s upcoming Tenant Rights Bill could be the straw that breaks the camel’s back for many landlords.

He mentions the possibility that metropolitan mayors – all but one of whom are Labour – could act as guinea pigs for the introduction of some form of rent control. He also speaks of the provisions of the Act itself, which include restrictions on evictions, stronger redress for tenants and the encouragement of more pets in rented accommodation.

Shepherd writes in his latest monthly report: “Activists’ calls for rent controls and an end to contractual lock-in are casting dark shadows over the future of the sales and rental markets. Too many landlords are already selling because they fear they will either be unable to set the rent needed to cover their costs, or will be forced to introduce expensive licensing systems, or both.”

He fears this will exacerbate the long-term crisis in the rental sector – a persistent excess of demand over supply. He points out that in August 2019 there were 96,000 properties available to rent across the UK; this month, in August 2024, there are only 66,000, a decline of 31%.

The result has been a steady rise in rents, but Home believes that current rental growth across the country is being dragged down by particularly weak performance in London.

According to the website, the annual growth rate of asking rents across the country is only 1.1 percent.

Wales continues to lead the regional growth table, followed by the South West with increases of 14.5% and 11.7% year-on-year respectively. Yorkshire and the North East also continue to see double-digit year-on-year growth. The fall in rents in Greater London is now -1.2% year-on-year. In the capital, the boroughs of Bexley and Haringey are seeing the largest falls in asking rents, with annual rent falls of 16.6% and 9.4% respectively. The East and West Midlands are also seeing falls (-2.8% and -0.8% respectively).

On the selling side of the market, asking prices rose 0.2% across England and Wales last month – the seventh consecutive monthly increase – and are now 1.2% higher compared to August 2023. Prices rose again in Wales, Scotland and all English regions, except in the North West and South East, where they remained unchanged.

The number of unsold sales inventory for England and Wales rose again last month, reaching a 10-year high in August. Agents’ portfolios have been expanded by nearly 6,000 properties, bringing the current total of unsold properties to 494,837.

You can see the full detailed index and commentary Here.

Would you like to comment on this article? Our goal is to provide you with a platform to share your insights and views. We welcome your contributions.
If a post is deemed to bully, harass, degrade or intimidate an individual or group of individuals, the post may be removed and the individual may be immediately banned from posting future posts.
Please help us by reporting comments that you find inappropriately offensive so that we can review them and take action if necessary. Thank you.