This quote below is taken straight from the Budget Red Book and has the potential to create chaos in the rental sector if introduced.
I believe this change would seriously effect current landlord’s future investment decisions and if it turns out to be as bad as it looks, many could decide to offload any lower end properties and move to more middle market rentals where this type of situation is rather less likely to occur.
What with Labour suggesting they could return to the bad old days by giving tenants the rights to a minimum of three years tenancy with the next obvious step of "lifetime" tenancies there is the real prospect of severe disruption to the UK rental market.
Although this is all supposed to be to do with lettings, it has the potential to have considerable unintended consequences for the residential sales market as well. In the past, Government has an appalling track record of generating huge unforeseen consequences when interfering in the residential property market.
Could this have anything to do with the latest pension changes? Are the Government expecting stronger demand for buy to let investments in the future (BTL certainly looks a much better investment to many and would appear to provide much stronger potential from income and growth than any other forms of investment) and just hoping to find a way to stem the growth?
Does it not seem quite possible that people will be looking to invest part or all of their pension pot into BTL investments? If so, there is the prospect of a boom (inevitably followed by a bust of course!) caused by the increased demand. Is this a way to try to stem the tide?
There is one very simple certainty in this marketplace. When demand outstrips demand – prices go up and visa-versa.
One way or another the rental market looks set for some significant changes of the next few years. Let’s hope the Government (whichever colour it may be) doesn’t upset this very delicate and currently well balanced apple cart.
Support for the sharing economy
The government wants to ensure that Britain is the global centre for the sharing economy, enabling individuals and businesses to make the most of their assets, resources,
time and skills through a range of online platforms. This Budget therefore announces a comprehensive package of measures that will break down barriers, create opportunities
for sharing, and unlock the potential of this dynamic and growing area.
Building on the recommendations of the independent review of the sharing economy, the government will make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.