HMO Landlords Retreat

January 2006

ARLA has reported that the number of landlords owning Houses in Multiple Occupation, has fallen sharply. The share of houses in multiple occupation across the whole rental sector has dropped from 9% to 6% over 3 months.

75,000 properties could go

Manning Stainton can echo these findings in Leeds, with a noticeable number of sales of properties previously let to five or more tenants. Across the country this could result in the loss of 75,000 properties, as the rental market increases demand for smaller rental units. Leeds could be significantly affected by this move.

ARLA has expressed the hope that the government recognises from these figures that regulation may be a two-edged sword. Whilst aiming to safeguard tenants, it can conversely drive bona fide landlords out of the market very quickly.

Tenants are staying for longer

However, the Review shows that in the mainstream rental market, tenants are staying longer. An average stay is now over 17 months, regardless of the initial term agreed. This is backed up at Manning Stainton Lettings; the increase in the number of young professional tenants staying beyond their initial 6 month let is growing as renting property in Leeds becomes more popular.

Generally speaking, landlords are satisfied with the rental market, with ARLA’s survey stating that they would not sell their investment properties even if house prices fall. A good deal of optimism was expressed, with over half of landlords expecting their investment property portfolios to increase in value over the next year.

HMO Legislation "Over-burdensome"

Commented Adrian Turner, Chief Executive of ARLA, “This quarter’s review gives a clear warning of the dangers that can be posed by legislation in a market place. We all recognise that tenants of Houses in Multiple Occupation must be protected from bad landlords”.

“However, if legislation is seen as over-burdensome it becomes a two-edged sword. This is because it is likely that it is those landlords who are prepared to stand up and be open about other properties and the way they manage them who are leaving the market. Meanwhile, the rogues are probably still in place, but crawling under the carpet where they will be difficult to trace”.

Manning Stainton Lettings fully expects the demand for good quality rental property to thrive in 2007, as the booming Leeds economy continues to drive in new employment opportunities.