Association of Residential Letting Agents and National Association of Estate Agents– 2016 predictions for the housing market

David Cox, managing director, Association of Residential Letting Agents (ARLA) provides an overview of what may be seen in the private rented sector in 2016:

Rising cost of renting

‘ UNFORTUNATELY for renters, rent prices are likely to go up in 2016. There are various pieces of legislation coming into play in 2016 which will result in increased compliance costs for landlords, and as a result push up rents for tenants. We urge the Government to re-think its proposals around reducing Mortgage Interest Relief, scrapping the Wear and Tear Allowance and hiking up Stamp Duty by three per cent on buy-to- let properties. Whilst these remain, the Government’s goal of increasing the percentage of people in home ownership is getting further out of reach.

‘ The issue of supply and demand in the rental market will be increasingly pushed to its limit with rising demand outstripping supply.

Regulation of the sector

‘ The good news is that regulation in the industry looks like it will be tightening up in 2016. We hope that the provisions of the Housing and Planning Bill – when brought into force – will give enforcing bodies and the courts more teeth in tackling rogue and criminal landlords and agents. This will develop in 2016 to enforce harsher penalties for landlords and unregulated agents that aren’t complying with basic laws.

‘ The Right to Rent checks introduced in the Immigration Act 2014 will be rolled out nationally from February 1 2016 following a successful pilot scheme in the West Midlands. However, we worry that the goodwill established towards the scheme may be tested by the increase in volume, disenfranchising landlords from the process.

On Scotland

‘ We applaud the Scottish Government for its recent bold plans for regulating the lettings industry and look forward to working with them during 2016 on the roll out of the proposals.

‘ However, we caution against the introduction of rent controls and the withdrawal of ‘nofault’ possession route for landlords as this will reduce investment into the Scottish private rented sector at a time when rental housing is needed more than ever before.’

Home buyers’ market

Mark Hayward, managing director, National Association of Estate Agents (NAEA) provides an overview of what may be seen in the housing market in 2016: ‘ Next year we will see a growing struggle for those trying to get on to the home ownership ladder, with house prices further beyond the reach of low to middle earners and rent costs eating away at more of their income.

First- time- buyers

‘ It is important that first- time- buyers (FTBs) remain at the top of the Government’s agenda in order to help them get a foot on the housing ladder. However, if the supply, specifically of ‘affordable housing’, doesn’t significantly increase in 2016, FTBs will continue to feel driven out of the market.

Supply and demand

‘ Supply is a key issue; if we truly want to see FTBs able to buy their first home we absolutely have to address this.

‘Osborne’s announcement that he’ll be building 200,000 new-starter- homes is a good place to start, but it’s not enough to solve the worsening crisis. We are at risk of doing too little, too late. We are still waiting to see new homes being built; and whilst we wait, house prices continue to rise.’