The changes proposed by Mr Gove will mean private rental homes have to meet minimum standards, as local authority properties do. However, experts said this would have a disproportionate effect on landlords in the North and Midlands.
Mr Gove’s White Paper noted that there were higher rates of poor quality homes in Yorkshire and the Humber, the West Midlands and the North West. However, property values in these parts of the country are lower and landlords are unable to use mortgage debt to cover the cost of upgrades as investors in the South East can.
Adam Kingswood, of Kingswood Residential Investment Management, a rental agency in Nottingham, warned the reforms would be the “final straw” for landlords.
“The result will be the opposite of levelling up. If landlords sell up and reduce the supply of homes, rents will go even higher.
“We have seen it in Nottingham: landlords leaving over the threat of more tax changes, energy reforms and soaring costs. At the same time, they are being enticed to sell by decent house prices. It’s a perfect storm.”
Mr Norris said the type of properties commonly owned by private landlords would make it even costlier to meet the same minimum standards as local councils.
“Local authority housing is typically in large estates and blocks of flats. But the private sector is dominated by older properties like Victorian terraced houses. These are really hard to meet a certain standard,” he said.
“Of course we welcome minimum standards for homes, but they need to be appropriate. A lot of landlords will be worried about where this money will come from,” Mr Norris added.
The rental market has been crippled by an acute shortage of homes to let, which has pushed up rents to record highs. The number of homes available to rent was 51pc lower in the last three months of 2021 compared with the same period in 2020. Competition between tenants has doubled, according to property website Rightmove.
A series of strict tax and regulatory changes meant more buy-to-lets were sold than bought last year. Landlords bought 184,100 properties, equal to a market share of 12.3pc, according to analysis by Hamptons. However, investors also made up 13.4pc of sales, with 201,300 properties being sold. The number of rental homes fell by 17,200.
