Brokers fear for buy-to-let future due to regulation and economic backdrop

Participants at a roundtable hosted by YBS Commercial in January, pointed to changes around the Energy Performance Certificate (EPC), which, if it comes into law in its current form, could mandate that new tenancies have an EPC rating of C or higher by 2025. Existing tenancies would have to meet this deadline by 2027.

The abolition of Section 21 eviction notices and rent caps in Scotland could mean that landlords could have less authority over their properties.

The higher interest rate environment’s impact on affordability, rental yields and landlords’ capital raising ability were also mentioned.

Attendees worried that these factors together could lead to a market exodus as many landlords choose to leave the sector rather than jump through increasingly compel regulatory hoops in a more expensive rental environment.

YBS: ‘A sustainable private rental sector is vital’

Tom Simpson, managing director for YBS Commercial Mortgages, said: “As an industry, it seems clear that there’s a collective sense of worry about the long-term effect of these changes.

“A sustainable private rental sector is vital in terms of providing quality housing for people across the UK.”

He continued: “Landlords of all kinds provide a vital service to the property market, yet with measures over recent years, many landlords, both large and small scale, may find increasingly that they have lost control of their own assets and that the numbers just don’t add up anymore.”

Norman Chambers, managing director for the NACFB, said: “The government needs to take these concerns seriously, and look at ways to support and encourage – not hinder – landlords in the future.

“This could include more consultation with trade associations like ourselves in advance, to better understand the implications of future policies recommended by government which affect landlords.”