Government Reiterates Importance of Private Rented Sector for the UK House Market
A thriving property rental sector is paramount to an effective UK housing market, says Michael Gove during the Conservative Party Conference.
Attending a Centre for Policy Studies fringe event, Michael Gove faced questions from Ben Beadle of the National Residential Landlords Association.
Let’s look at this conversation in more detail and understand what effect it may have on property investors in 2023 and beyond.
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What Dive the Housing Secretary Say About the Housing Market?
Gove agreed with Beadle’s assertion. He said:
“You can’t have an effective housing market, or provision of the homes we need, without having a variety of different types of tenure.
“A route to homeownership, a private rented sector that facilitates labour mobility among other things, and socially rented homes in order to help people who are, for whatever reason, eligible for, and deserving of, that level of support.”
Gove went on to acknowledge the NRLA’s relationship with the Government regarding private rental sector reform, highlighting the importance of a ‘balanced market’ that considers the requirements of landlords and tenants.
Gove went on to say:
“Actually, the overwhelming majority of landlords want a relationship with their tenants where their tenants stay. Easily, the best thing is to have a long-term relationship with someone who pays the rent, looks after the property and where there are those ties.”
In another Shelter-organised event, Gove reiterated the need for a thriving private rented sector.
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What Did Gove Say in His Keynote Speech at the Tory Conference?
Earlier in the week, Gove and Housing Secretary Rachael Maclean gave assurance that the Renters Reform Bill would get a second reading before Christmas.
However, Gove failed to touch upon the bill in his keynote speech.
Gove spent much of the speech targeting the Labour opposition. However, he promised that Conservative housebuilding plans would protect Britain’s natural landscape. In addition, he dubbed the party one of “beauty and nature” and promised to “build in the hearts of towns and cities and on brownfield land, because that cuts commuting times, revitalises high streets and protects the Green Belt.”
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Should Buy-to-Let Investors Enter into the Property Market?
Gove’s rhetoric suggests a need for new properties in the private rented sector.
Inflation and interest rates have made it difficult for many people to get onto the property ladder, leading to a surge in rental demand. However, supply remains an issue. Take a look at our Interest Rates UK Table for a closer look at the figures over the years.
The economy has shown early signs of recovery. Inflation has decreased for two months in a row, and the Bank of England halted the Base Rate hike.
Numerous experts expect the UK property price decline to bottom out soon. Afterwards, prices will stagnate before potentially rising in the next few years.
As such, Q4 2023 represents a promising time for buy-to-let landlords willing to think long-term. With rental demand still high, landlords have plenty of potential tenants.
Off-plan property investment offers a discounted way to get into the property sector. Investors purchase off-plan units before they are built. The price is usually below market value. In addition, property investment companies offer instalment plans to spread the cost of the home.