2016 may be one of those years to forget for people connected with the lettings industry. Politicians decided they’d had enough of ‘Banker Bashing’ and concentrated on landlords. With a blizzard of new rules and regulations already announced, they decided to put the boot in with more investigations into letting fees, extending lease lengths and yards of more red tape seemingly designed to ensnare landlords and their agents.
Little progress was made with Client Money Protection and the new Housing Minister confirmed that those banned from practising as letting agents would still be able to be estate agents and vice versa.
The spring saw the introduction of the new higher rate Stamp Duty Land Tax leading to a spike in sales in March, as investors and second home owners rushed to beat the additional 3% cost of buying a property.
Experts predicted that the higher costs would be passed on to tenants by way of higher rents but, despite the unexpected result of the EU Referendum in June, the market has in fact stayed remarkably stable.
Rents generally have held; most landlords have not passed on any additional cost they have incurred (says the impressive HomeLet monthly rental index) although there has been some inflation through the first half of the year. What seems clear however is that much more stock has come to the market and this has kept a lid on rent rises in many parts of the country.
2016 will be remembered by many as the year that more data became available - data for landlords, agents, for the emerging Build-to-Rent sector and of course for the State.
Whilst we have still not seen anti-money laundering regulations catch up with the sales side of the business there is clearly some joined up work going on with the tax man now able to focus his interests on those deriving an income from letting property which, in due course, will enable him to also cross-check those who should be declaring Capital Gains Tax when selling an investment property.
We have never had a better understanding of the lettings market and the significant part it plays in both the economy and the social fabric of the United Kingdom. More homes are let each year than are sold. The majority of landlords only have one property in the portfolio. These used to be estimates but are now known to be fact thanks to the proliferation of data available through multiple sources.
So as we head into 2017 what can we expect? More legislation I’m afraid, more hoops for landlords and agents to jump through.
Capital values look likely to fall and, unless transactions costs fall for the more expensive homes, then there will be more people looking to rent which may help hold rents up - leading to higher yields too. Tenants can expect more security and better protection from less scrupulous landlords and those who do police the sector may well get greater powers to clean up those parts that give the industry a poor reputation.
Social tenants will get less financial support, which will leave many struggling to afford private sector rents. The implications of this still seem to be lost on politicians despite the frantic efforts of charities and lobby groups to draw attention to the likely impact.
2017 should be a less frantic year than last but, once again, the winners will be those who plan, who are informed and who consider their relationship with their landlord or tenant to be something more than a simple commercial agreement. Maybe we will all be better off as a result?
Henry Pryor is a buying agent & "the BBC's favourite property expert". Any views expressed in this article are those of the author.
Editor’s note: At the time of writing, the Autumn Statement hadn’t yet been released.