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The UK is currently experiencing its highest inflation rate since the early 1990s.
What will this mean to the Luton property market, people
wanting to move home and Luton house prices?
All discussed in this article

The UK is currently experiencing its highest inflation rate since the early 1990s. This increase in prices has primarily come about by the combination of an increase in demand for goods and services from consumers following lockdown last year together with global supply chain disruptions.

 

Most economists weren't too concerned about this increase in the inflation rate as the very same thing happened in the early 1990s following the Credit Crunch with a similar rise in demand and supply chain issues. Thankfully, back in the early 1990s, inflation returned to lower levels quite quickly. However, the situation in Eastern Europe now could change matters.

 

So, let me look at all the factors and what it means for the Luton property market.

 

The crisis in Eastern Europe has sparked even further rises in crude oil (which diesel and petrol are made from), gas and grain prices as pressure on supply chains around the world increases.

 

In my previous articles, I suggested UK inflation would rise to around 7% in the spring and drop back to 5% in the autumn and as we entered 2023, be approximately 3% to 4%.

 

Yet, with these issues, inflation could rise to 8% to 9% by late spring and still be around 6% to 7% in autumn, well above the Bank of England's target of 2%.

 

With Luton wages rising at only 3% to 4% and inflation at 7%+,

Luton household incomes, in real terms, will fall.

 

This is because ‘real’ UK household incomes characteristically have been the most consistent lead indicator of growth (or a drop) in house prices. This is because growing inflation erodes the value of money you earn, which reduces its buying power. When the cash in your pocket has a lower spending power, people tend to spend less when they buy (and rent) a home (and vice versa).

 

Next month, Income Tax thresholds will be frozen, and National Insurance contributions are increasing. Collectively, all these issues will create a drop of around 2% to 2.5% in the real disposable income of Britain's households in 2022 (real disposable income - somebody's take-home wages after tax and then the effects of inflation are considered).

 

Will Luton people be more anxious to spend their money?

 

 

With less money in people's pockets, people's inclination to spend the money they do have could also be curtailed. People's savings are at an all-time high, yet many will decide to sit on the cash, instead of spending it, especially as consumer confidence has dropped to minus 26 on the GfK index (whatever that means – but in all seriousness though - more on that below).

 

All this can only mean there is going to be a house price crash.

 

It’s all doom and gloom! …Or is it?

 

My heart goes out to people caught up in the awful humanitarian crisis in Eastern Europe. Yet, I respectfully need to put that to one side for just a moment for the purpose of this article.

 

This blog is about the Luton property market, and Luton people want to know what will happen to the Luton property market.

 

In the first half of the article, I looked at the impending fall in real disposable incomes of 2% to 2.5% in 2022. I appreciate it's going to be tough for many families in Luton. Yet, it is always important to consider what has happened in previous times.

 

1982 – a drop of 2.3% in real disposable income

1992 – a drop of 3.7% in real disposable income

2008 – a drop of 5.8% in real disposable income

 

Yes, it's going to be tough, yet we got through 1982, 1992 and 2008 – and so we shall in 2022/23.

 

Next, the price of petrol is very high compared to a year ago.

 

The average price of unleaded petrol is £1.51/litre today, quite a jump from the £1.21/litre a year ago. But here is an interesting fact, petrol was a lot more expensive (in real terms) in 2011 than today. In TODAY's money, a litre of unleaded petrol in 2011 would be the equivalent of £1.79/litre. We have some way to go before we get to those levels – and again, the Luton economy (and property market) kicked on quite nicely after 2011.

 

What are Luton people spending

on their rent and mortgages?

 

Housing costs - owner occupiers were spending on average 17.3% of their household income on mortgages in 2015, yet in 2021 this had risen, albeit to 17.7% - not a huge increase.

 

Council house (social) tenants have seen a drop in their rent from 29.2% in 2015 to 26.7% in 2021, whilst private tenants from 36.4% in 2015 to 31.2% in 2021.

 

Interesting that private tenants are proportionally 14.29% better off in 2021 than in 2015.

 

How we spend our money - the average UK home spent 4.2% of their household income on energy in 2021, and that is due to rise to 6.3% after April (and probably 7% in October). Yet, as a country, we spend 9% of our income on restaurants and hotels and 8% on recreation and culture. As with all aspects of life, it will mean choices, and maybe we will have to forego some luxuries?

 

Just before I move on from this aspect of the article, again I appreciate I am talking in averages. Many people with low incomes suffer from fuel poverty and they will find the increases in energy prices hard - my thoughts go out to you.

 

Interest rates - higher inflation is generally brought under control using higher interest rates, meaning mortgage payments will

 be higher.

 

First, 79% of homeowners with a mortgage are on a fixed rate, so any rise won't be instantaneous. Yet, there will be a bizarre side effect from the issues in Eastern Europe. Surprisingly, though the current situation in Eastern Europe, by its very nature, will bring greater UK inflation, it will also probably defer the Bank of England raising interest rates. This means mortgage rates won't increase as much as the bank won't want to exacerbate any pressures to the UK economy in 2023/24 caused by the conflict.

 

The stock market had priced an interest rate rise to 2% by the end of 2022. I suspect this will now be no more than 1% to 1.25% by Christmas, slowly going up in quarters of one per cent every few months. The crisis in Eastern Europe might even come to be seen as a defence for higher inflation throughout 2022, all meaning everyone's mortgage will be less.

 

Next, looking at Consumer Confidence Indexes - these indexes are fickle things. I prefer to look at the Organisation for Economic Co-operation and Development Consumer Confidence Index as it has a larger sample range and a longer time frame to compare against. Looking at the data from the mid 1970s, the drop in consumer confidence is big, yet nothing like the drops seen in the Oil Crisis of the mid 1970s, Recession of the early 1980s, ERM crisis of 1992 and the Global Financial Crisis of 2008/09. Also, when compared to the other main economies of the world (G7), the UK has always bounced back much more quickly from recessions when it comes to consumer confidence.

 

What about house prices in Luton in 2022/23?

 

Increasing energy prices, rising inflation, an increase of sanctions, and a probable drop in consumer confidence and spending in the aftermath of the conflict will knock the post-pandemic recovery globally, which will lead to a recession around the world, including the UK.

 

A recession is when a country’s GDP drops in two consecutive quarters. For the last 300 years, there has been a direct link between British house prices and GDP - (i.e. when GDP drops, UK house prices fall). Yet in 2020, the British GDP dropped by nearly 12%, yet house prices went the other way. 

 

But let’s look at what would happen if Luton house prices did drop by the same extent they did in the Global Financial Crisis of 2008/09.

 

House prices in Luton dropped by 16.5% in the Global Financial Crisis, the biggest drop in house prices over 16 months ever recorded in the UK.

 

The average value of a property in Luton

today is £263,970.

 

Meaning if Luton's house prices dropped by the same percentage in the next 16 months, an average home locally would only be worth £220,414.

 

On the face of it, not good - until you realise that it would only take us back to Luton house prices being achieved in mid-2016 - and nobody was complaining about those.

 

Yes, that will mean if they do drop in price, the 9.5% of Luton homeowners who have moved home since mid-2016 would lose out if they sold after that price crash. But how many people move home after only being in their home for a few years?

 

The simple fact is that 90.5% of Luton homeowners will be better off when they move if house prices crash.

 

And all this assumes there will be a crash.

 

The simple fact is, the circumstances of 2009 that caused the property crash are entirely different to 2022 (no lending by the banks, higher interest rates and increasing unemployment compared to today’s increased lending, ultra-low interest rates and low unemployment environment).

 

I do believe with all that's happening in the world we might see a rebalancing of the Luton property market later in 2022 and could see the odd month with little negative growth in house prices, yet it will be nothing like 2009.

 

The expected fall in household spending could be counterbalanced by UK businesses’ plans to invest more in their businesses (with last year’s tax breaks on investing), which will create even more jobs.

 

Who knows what the future holds? These are just my opinions - what are yours?

 

  • 1,461 homes in the Luton area are empty, which represents 1 in 56 homes.

 

  • 720 of those have been empty for more than six months and are worth £190million.

 

  • Why are those properties standing empty and deteriorating and why could that become an issue for the whole of Luton?

 

A couple of weeks ago was National Empty Homes Week, so I thought I would find out how many homes are empty in the Luton area – the numbers surprised me, so I wanted to share my thoughts about them with you.

The latest Government statistics show that 720 properties

in Luton have been empty for more than six months.

 

Homes that are left empty for an extended period can affect our locality and occasionally invite anti-social behaviour.

With a shortage of housing in the Luton area, these empty homes must be brought back into use to generate much-needed housing for local people.

As you can see in the first bullet point, some homes are only empty for a short period of time. Yet, those local properties that stand empty for more than six months and then deteriorate become a problem for our local community.

I appreciate there can be many genuine explanations why a property may be left empty for a long time. However, with council house waiting lists at high levels and the shortage of both properties to buy and rent in Luton, we must ask what is being done about this at Government level and how this could affect the Luton property market?

The collective value of these 720 long-term (6 months or more)

empty houses in Luton are worth £190million.

This impacts the Luton housing market with a lack of properties coming onto the market for sale and rent. This results in house prices being pushed up, making it less affordable for first-time buyers to get on the first step of the housing ladder.

It’s a real shame that many local properties are empty for over six months when there is an increasing demand for accommodation, at a time when there’s such a competitive housing market.

So, one might ask if this issue of long-term empty properties is a new problem? Well, not really.

There were 815 homes long-term empty in Luton in 2010.

 

I know our local authority likes to work with property owners of empty homes to bring them back into housing stock as it helps with the housing shortage, even with the help of grants if improvement work is needed for the empty home. Yet, they could use enforcement action where a homeowner is incapable or unwilling to bring their property back into use.

 

So, what is the Government doing nationally? Homeowners are charged a 50% premium on top of their Council Tax if their home has been empty for two years or more. This can rise to a 300% premium if the property has been empty for ten years or more.

 

However, the bigger question is, why are all these homes

in the Luton area being left empty?

 

The real answer is - they are not.

 

A handful of the properties belong to the local authority and are in poor condition because the tenant trashed the property. 

 

Probate (where the person's estate is put in order and passed onto the beneficiaries of the will) takes between six and twelve months. Most of these long-term properties are being modernised and renovated, whilst other Luton properties are part of a deceased estate. In other circumstances, some Luton homes have been left empty after the owner has been placed into a care home, yet there is no Power of Attorney to put the home onto the market. 

 

There is no 'one fix all' to the empty home syndrome in Luton.

 

Empty properties in Luton is not an issue that will sort the housing crisis we are suffering from.

 

The simple fact is the population is growing faster than the number of houses being built. We need to build more homes.

 

Whether that means council properties, housing association homes, private landlords or even owner-occupation housing the masses - that's a massive question we could all talk about, day in day out until the cows come home.

 

So, tell me, what are your thoughts on the matter?

Author Taylor Kay

 

The Energy Bills of every Luton resident will rise by around a half in April as the price cap increases to account for the global increase in the cost of gas. Those not on the gas mains will still be hit as the UK uses gas to make 45% of its electricity. So, what can Luton residents do to reduce their energy consumption and ultimately save money? Read this article to find out 68% of you already have a bespoke report on your Luton home which tells you how to quickly and easily save money.. and if you have not any got one of these reports, how to get one” 

The energy bills of every Luton resident will rise in April as the price cap increases to account for the global increase in the cost of gas. Those not on the gas mains will still be hit as the UK uses gas to make 45% of its electricity.

 

So, what can Luton residents do to reduce their energy consumption and ultimately save money?

 

First, let's look at the scale of the costs.

 

Considering the increase in energy prices from April, the combined energy bills for the whole of Luton come to…

 

  • £122,288,082 for central heating
  • £24,519,481 for hot water
  • £13,325,052 for lighting

 

There are extra energy costs for washing, fridges, etc., yet I wanted to focus just on the home as this is a property blog.

 

Everyone's bills will be around 50% more expensive in 2022 than in 2021, but it’s not too late for Luton people to take some quick steps to cut their energy bills and, at the same time, cut our carbon footprint.

 

Just over a quarter of the UK’s carbon comes from heating and lighting our 27.6 million homes, and each UK home produces

4.39 tonnes of carbon dioxide a year.

 

Upgrading the energy efficiency of UK homes is seen as a vital step to attempting to mitigate the issues of climate change, fuel poverty and our nation's energy security.

 

So, what are some quick wins for Luton residents to reduce the energy bills on their homes, and how will energy efficiency play a more significant part in the value of Luton homes in the future?

 

  1. By turning down the thermostat by 1 degree, the average annual saving would be £105.91 per home and each homes carbon dioxide would be reduced by an eighth of a tonne (it all adds up!).

 

  1. Replacing your bulbs when you can with energy-efficient bulbs will, on average, reduce your lighting costs from £172 per year to £103 per year.

 

  1. What time does your heating come on and off? Could it come on later and go off earlier?

 

  1. Smart meters (which are installed for free) are estimated to help lower UK homes electricity use by nearly 3% and gas use by 2% … again it’s all margin gains.

 

These are just a handful of ideas. Check out the internet for others as it's fascinating how much energy we use for overfull kettles, chargers left on and tech on standby etc.

 

Yet, these things will only scratch the surface… many of us will need to go further, especially Luton landlords, to retrofit our properties to make them more energy-efficient.

 

This is particularly important as in June the Government announced they would make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retro-fitting to meet these ambitious climate targets.

 

In 2018, the Government required private landlords to improve the energy rating of their rental properties by prohibiting the rental of any property with an Energy Performance Certificate (EPC) rating of F and G (the lowest ratings). Yet from 2025, that will be increased to C for all new tenancies and 2028 for all existing tenancies (more on these EPCs below).

 

I don’t believe there is an appetite to mandate private homeowners to do this work, though you never know in the future.

 

So, how do you find out about your

Luton home’s eco-credentials?

 

Since 2007, every new home that has been built, rented out or put on to the market in Luton has had to have an EPC, giving it a rating between A and G (rather like those stickers you see on fridges and washing machines).

 

A is the highest rating (i.e., best energy efficient and greener), and G is the worst efficiency rating.

 

 

34.8% of Luton homes are in that eco-friendly A to C energy performance band rating, compared to the national average of 40.1%

 

So, what next? Well, the Government will attempt to make the green revolution as painless as possible with technology.

 

In the future, we might have hydrogen central heating instead of mains gas; or have solar panels for electricity, all triple glazed windows and even ground source heating - sounds fanciful? Well, who would have thought some of the most wanted cars would be electric 20 years ago?

 

There is no doubt that the energy efficiency of our homes will rise in the coming years as the cost of fuel increases and people's opinion on going green changes.

 

You don’t need to spend thousands of pounds to find out what you can do to make your property greener and cost less. Look at your EPC and it will tell you what small changes you can make to improve your Luton home’s energy efficiency rating and ultimately save yourself money. If you want to find the EPC rating of your Luton home, go to epcregister.com.

 

If you need an EPC, drop me a line as I know some great local energy assessors that can easily do an EPC on your property at a price that won't cost the earth!

 

Author Taylor Kay

  • 25% drop in the number of properties for sale in Luton in the last 12 months.

 

  • 885 Luton homes have sold (stc) in the last three months alone, taking the time from the ‘for sale board’ going up to sale agreed to a median of 26 days.

 

  • The £200k to £300k price range in Luton is the most active, where it only takes 14 days to sale agreed, but the £100k to £200k is taking 62 days.

 

  • Yet, what issues cause the people of Luton to want to move home and what can Luton people, who want to move in 2022, do to ensure they sell and find the home of their dreams?

 

There are 891 properties for sale today in Luton; roll the clock back exactly a year, and the figure was 1,191 - there’s been a drop of 25%. This drop is being dubbed ‘for sale board crunch’.

 

The ‘for sale board crunch’ has left many prospective Luton home buyers stressing to find the right Luton property as the number of properties available to buy has dropped significantly.

 

I am sure you know people looking for their next Luton home, but when they see it on the portals (Rightmove, Zoopla, Boomin, OnTheMarket etc.) the properties are gone within days.

 

With demand at an all-time high, many Luton home buyers are in a state of misery as Luton house prices have grown in the last few years, forcing many of them to review their plans.

 

They are victims of the ‘for sale board crunch’ in the Luton property market, the likes of which have not been seen since 2007.

 

Normally when there has been excess demand in the residential sales market, that frothiness has been taken care of by people moving into rented accommodation. However, the number of Luton properties available to rent is at a 15-year low.

 

So why is the Luton property market this way?

 

Demand for Luton homes has exceeded the number of properties for sale since the General Election in December 2019. After years of long drawn out Brexit negotiations, homeowners and buyers were more confident about their move. Many Luton people who put their home move on hold in 2018/19 had more confidence to return to the market.

 

The first lockdown in the spring of 2020 did nothing to quell this pent-up urge, and since the late spring of 2020, the Luton property market has been on fire! The lockdown changed what homeowners are looking for in their Luton home. Proximity to public transport dropped down the wish list for buyers, and demand for apartments dropped. Whilst properties with larger gardens and rooms that could double up as home offices tended to be at the top of most Luton buyers' wish lists.

 

Around 36% more Luton properties have sold in the

last 18 months than the long-term 20-year average.

 

Looking at the supply side of the equation, in the last five years, an average of 204,410 new homes per year have been added to the number of properties available in the UK. Also, 239,600 properties came back into the market when they became available after their owners had sadly passed away. Yet still, that isn't enough. The country needs at least 300,000 new dwellings to keep pace with demand.

 

There is also another problem that has come to light with the cladding issue of apartments. Just over three-quarters of million apartments have issues with cladding. Whilst these are being sorted out (which will take many years), they are essentially unsaleable unless a fire safety expert on these buildings signs them as safe.

 

These cladding issues prevent these apartments from coming onto the market (thus reducing the supply of properties to buy). It also precludes their owners from moving up the property ladder from their apartment to a house. Also, many first-time buyers who can save a bigger deposit or be gifted cash from the Bank of Mum and Dad are skipping the apartment as their first home and going straight for a house, thus intensifying the lack of larger properties for sale.

 

So, how long does it take to sell a Luton property now?

 

Luton Apartments – 54 days

Luton Terraced/Town House – 19 days

Luton Semi-Detached – 15 days

Luton Detached – 57 days

 

This means it is a seller’s market in Luton, empowering them to push up their asking prices in high demand areas. However, most sellers are also buyers, which means the advantage they have on selling their property is turned on its head when they come to buy.

 

Many Luton sellers prefer to find their future Luton home before putting their current home on the market. That is making the lack of properties on the market seem even harsher than it may otherwise be.  

 

The ‘for sale board crunch’ would be somewhat eased if Luton sellers put their property onto the market whilst they were hunting for their next ‘forever home’.

 

However, not all Luton homeowners are doing so, partially because they (wrongly) believe they will be made homeless if they find a buyer and can’t find another property to buy (remember, you are not legally committed to moving until exchange of contracts).

 

A big issue will be finding a suitable Luton home. We very much have a chicken and egg scenario. Some homeowners are waiting for the right property to come onto the market before they put their home on the market. This will probably mean that that Luton property will sell even before the photographs have been taken of your home.  

 

Yet, many Luton homeowners are worried if they put their house on the market and it sells, they won’t be able to find another suitable home and thus be homeless.

 

Classic chicken and egg – so what do you do first?

 

There is another way of doing this. It's a technique estate agents used to use before the internet, and it's called 'chain building'. Many Luton homeowners are contacting me to move home yet don't want to be made homeless. What we do is slowly build a group of people in a chain over many months. It requires a lot of patience to build a chain downwards and upwards around you.  

 

There is no cost to this and no legal commitment to go through. It can take six, even twelve months to build a chain of people who are prepared to wait for the chain to form.

 

Yet, everyone normally gets their next 'forever home'

by playing this long game.

 

Because if you don’t play the long game, build relationships with Luton estate agents (who can build these chains) and only rely on waiting for properties to appear on Rightmove, Boomin, OnTheMarket or Zoopla, you will be sorely disappointed.  

 

According to national research from Denton House Research, 7 out of 8 people who viewed a house through an estate agent in 2021 were not on the mailing list of that agent before they viewed it.

 

That means all these Luton properties, built on a chain builder (as above), will sell yet won't appear on Rightmove or Zoopla, meaning you will miss out. 

 

You must get yourself on the mailing list of our estate agency (and other agents if they do this chain building) so you don’t miss out on your next forever home in Luton. 

 

If you would like a chat about anything mentioned in this article, feel free to drop me a message or call me.

  • Some Luton landlords face bills of between £11,000 to £14,000 as Michael Gove, the Housing Minister, declared an attack on poor quality private rental homes.

 

  • 4,008 Luton rental properties will require upgrading. The Government announced in their ‘Levelling Up’ White Paper last week, they plan to introduce a new minimum standard for private rental properties.

 

  • Also, the White Paper wants every landlord in Luton (17,203 of you) to go on a Landlord Register and proposes the removal of Section 21 no-fault evictions. This could make it more difficult for you to get possession of your Luton rental property.

 

  • Are these proposed changes another nail in the buy-to-let coffin for Luton landlords?

 

On the face of it, yes, it could be seen as another attack on the humble Luton landlord, having to spend money on their properties and get tangled up with red tape on a register and then having no-fault evictions removed.

 

Yet, as always, the devil is in the detail…

 

This ‘Levelling Up Bill’ is a White Paper. White Papers are policy documents created by the existing Government that set out their future proposals for legislation. Many White Papers don’t even make it to the House of Commons to be debated on, and even then, it needs to be voted on by both Houses of Parliament before becoming law. Any changes are at least two or three years away, and that’s assuming it gets debated and subsequently approved.

 

Many have said the White Paper is supposed to lay out how to resolve the problem of rebalancing the UK economy that is suffering from the highest level of regional inequality than any G8 country. This is a gargantuan challenge…

 

yet the Levelling Up White Paper reads very much like a shopping list of great ideas without the means to pay for it.

 

One of the 12 points in the White Paper was focusing on housing, with a plan to introduce a new minimum standard for rental properties, a landlord register and the removal of no-fault evictions (as an aside, there was also a mention of a possible reintroduction of Home Information Packs - remember those from 2009!).

 

So, what does this mean for the landlords of the 17,203 private rental properties in Luton?

 

Sub Standard Rental Properties

 

The proposed changes will mean rental homes in the private sector will have to meet two specific standards that the existing 11,807 social housing homes in Luton currently need to meet.

 

The first being called the ‘Decent Homes Standard’ (DHS) and the second, the Housing, Health and Safety Rating System (HHSRS) evaluation.

 

Looking at data from the Government, there are 4,008 private rental properties in Luton that are considered substandard under these two measures and each one would cost between £11,000 and £14,000 to bring up to the prescribed standard. That means…

 

the estimated total cost to improve the 4,008 Luton properties, that are considered substandard, could be as high as £56,116,186.

 

All of that would have to come out of the pockets of Luton landlords!

 

Yet both systems of standards (DHS & HHSRS) have been slated by many (even by the Government itself).

 

The DHS criteria for the standard are as follows:

 

  1. It must meet the current statutory minimum standard for housing
  2. It must be in a reasonable state of repair
  3. It must have reasonably modern facilities and services
  4. It must provide a reasonable degree of thermal comfort

 

Note how the word ‘reasonable’ is used in three of the four points of the DHS. Reasonable is an arbitrary and a very much subjective point of view. It screams loopholes and get out clauses to me.

 

Looking at the HHSRS, the Government announced just before the pandemic in June 2019 that the HHSRS would be revamped after it was found to be ‘complicated and inefficient to use’.

 

Putting aside how one measures the standards, it is a simple fact that there are many Luton rental properties that are substandard. I believe it right the Government have an ambition to halve the number of sub-standard private rentals by 2030. However, would it surprise you that…

 

in 2006, 46.7% of private rented homes in the UK were classed as substandard and today that has reduced, without any legislation, to 23.3%. One must ask if new legislation is now required?

 

Also, if you recall in an article I wrote recently (drop me line if you would like me to send it to you), Luton landlords will be faced with bringing their properties up to an energy rating (EPC) of C between 2026 and 2028 in legislation already announced.

 

Most of the works to meet that EPC rating requirement will be the same works to meet this new DHS and HHSRS. Also, in that article, I discussed how the Government have suggested that certain allowances will be made for landlords on rental properties that can’t be improved.

 

So, I think Luton landlords should sit tight and let the Government shine more light on this in the coming months before any knee jerk reactions are made.

 

Landlord Register

 

To be honest, there are several city/borough registers around the UK for landlords. Experience has shown they seem to add an extra level of bureaucracy and red tape. The register would be for every Luton buy-to-let landlord and rogue landlords would be struck off whilst allowing tenants new redress rights. Another reason to employ the services of a letting agent to sort!

 

End of No-fault Evictions

 

Again, I spoke about this a few weeks ago with the proposed removal of Section 21 to evict a tenant (again, if you want a copy, drop me a line). If you recall, I stated that no-fault evictions were removed in Scotland over four years ago and the apocalyptic suggestions it would kill the rental market for Scottish landlords was not forthcoming. Now of course, the Scots strengthened the other grounds to evict a tenant. If the Government strengthen the Section 8 legislation, again, I cannot see this being an issue south of the border. Again, time will tell once the Government put more meat on the bones of the White Paper.

 

Conclusion

 

Many of the announcements made in the Levelling Up White Paper are re-hashed proposed legislation that has been on the books for the last couple of years.

 

This White Paper is not another nail in the coffin of buy-to-let

in Luton.

 

Yet, many commentators have cautioned that more landlords with substandard homes will sell up because of these proposed changes, warning the sell up would add to the private rental sector's shortage of homes, thus pushing up rents.

 

If that was true, that would increase rental returns on Luton buy-to-let and attract more Luton landlords into the sector, wouldn’t it?


But if you don’t agree other Luton landlords will buy these rental properties that other landlords are selling, who will buy their Luton properties from them? It will be Luton renters, who are now able to buy because the price has come down, meaning equilibrium should return to the market.

 

This is all theoretical and there are shortages/gluts in specific locations. Let us not forget it was 12/18 months ago that rents were dropped by double digit percentage points in the space of a couple of months in the big cities. Those rent drops weren’t anything to do with landlords buying up City Centre rental properties, but demand plummeted with 20 something tenants moving back in with their parents during the first lockdown and the months that followed. Yet, now rents have bounced back to pre-pandemic levels (and more) with the return of tenants to the cities.

 

In a nutshell, if Luton landlords do end up selling in their droves (which they won’t), yet if they do, those Luton properties will

still exist.

 

Few of them will be left empty because most of them will be bought by other Luton landlords as they will be attracted to the sector as inflation takes hold whilst others will be bought by first-time buyers.

 

What goes around, comes around. So, let’s see what happens in the coming months. In the meantime, if you’re a Luton landlord and you want to discuss anything in this article, please either drop me a line or send me an email.

 

Author Taylor Kay

 

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