The Government’s new £65 annual property registration fee could become the “final nail in the coffin” for some landlords already considering leaving the private rented sector, it has been warned.
Landlords will be required to pay the annual charge for each property registered on the new national landlord database, which begins rolling out in the West Midlands on 15 December.
While the fee amounts to £325 a year for a landlord with five properties and £650 for someone with 10, property firm We Buy Any Home warns it needs to be viewed alongside the wider costs and regulatory pressures facing landlords.
The concern is that further landlord exits could reduce rental supply if properties are subsequently sold to owner-occupiers rather than other investors.
CUMULATIVE PRESSURE
Elliot Castle (main picture, inset), Chief Executive Officer of We Buy Any Home, says: “We absolutely welcome legislation that protects tenants from rogue landlords and helps councils act against unsafe or poorly managed properties.
“However, policymakers must also recognise the cumulative financial and administrative burden being placed on responsible landlords. For some, this latest requirement could become the final nail in the coffin.”
He adds: “A £65 fee viewed in isolation may not sound enough to make somebody sell but landlords do not experience it in isolation.
“It arrives alongside mortgage costs, taxation, maintenance, safety requirements and wider regulatory changes. Smaller landlords with narrow margins may decide that continuing is no longer financially or practically worthwhile.”
RENTAL SUPPLY
Castle warns that any resulting reduction in rental stock could ultimately affect tenants in markets where demand already exceeds supply.
He says: “A policy designed to protect renters must not inadvertently make it harder or more expensive for them to find a home.
“The Government must monitor whether responsible landlords begin leaving the sector and be prepared to act if registration becomes another factor reducing rental supply.”
