August 4, 2014

Bob Young is managing director of CHL Mortgages


If you conducted a poll amongst the general public in the UK about which group or community were most deserving of public sympathy then I suspect private rental sector landlords would either not feature at all, or be close towards the bottom.

And yet, while I appreciate that the profession is not exactly number one in the popularity stakes, neither should it be treated with disdain.

Indeed, in recent times it appears to be that landlords are often blamed for many of the UK’s housing issues which ultimately are completely out of their control and are actually the consequence of Government inaction over many decades.

Let’s be honest, there has been little in the way of a coherent Government strategy on housing for many years.

Even now, with the work the Coalition is trying to achieve, it could be viewed as too little, too late and any positive results will not be felt for a long time. In this environment it has been almost inevitable that the PRS would grow in order to fill the housing gap and, to achieve this, the role of smaller buy-to-let lenders has been crucial.

Were it not for lenders and landlords willing to get involved and support the sector then I suspect UK housing would be in a far worse position than it is today.

However, this simple fact goes unappreciated by many in the chattering classes particularly the mainstream media which often seems obliged to precede every use of the word ‘landlord’ with ‘unscrupulous’.

This is simply not the case and I suspect if you were to talk to the vast majority of tenants across the land most would be able to talk positively about their experience of renting.

Of course there will also be bad apples and these need to be weeded out of the sector however most landlords are not ‘get rich quick’ types willing to up rents at the drop of a hat and evict tenants with impunity.

In my view, landlords, particularly the smaller/amateur ones, are easy targets for just about everyone as they unfortunately do not have a credible, strong voice to represent them.

And before I receive emails and calls from the various landlord associations, let me say that I believe you do a very good job for your members in difficult circumstances, it’s just that landlords (as a whole) could be better represented particularly in Government circles.

So, why are landlords in the cross-hairs? Perhaps it’s that people are envious of landlords because of the perception that property prices ‘continually rising’. The other fundamental here is that, let’s be honest, tenants don’t like paying rent – how often have you heard renting described as ‘throwing money away’? – plus we have a press which has an easy target in picking out isolated poor practices and extrapolating a problem. We should also not forget that politicians – rather importantly for them – can score easy points with voters if they say they’ll bring the sector ‘under control’.

If this prevailing attitude continues to persist, we could well see some significant negative effects on the PRS specifically, but also the entire UK housing market as a whole. It would appear the anti-PRS/landlord momentum will not stop anytime soon and the ‘problems’ will continue to be highlighted which ultimately might result in the Government feeling it has to regulate. If this is the case, then we’re in for consequences which will be as serious as the 1974 Rent Acts which sought to help, but literally destroyed, the PRS.

Regulation of buy-to-let may well result in a number of unintended consequences with more landlords selling up – this will mean an even worse housing problem, property prices will fall sharply as a reaction to the oversupply caused by landlords selling, and we may have a case where ordinary people who had invested in buy-to-let in order to support themselves in retirement are left needing State support, and not paying tax as they have less income.

All this because a vocal number believe landlords are the root of all evil rather than actually helping the country’s housing market because of years of inadequate action.

This focus on landlords, and lenders, is the equivalent of complaining that the manufacturer of a Band Aid, which has been used on an amputated leg, is to blame for not stopping the bleeding.

It is the symptom of a far bigger issue and the Band Aid should never have been used in the first place.

We need to look at the root cause of the problems in the UK housing market – notably a lack of supply – and focus less on a group which has for many years been part of the solution.





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