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January 2020 | Buy-to-Let

Bob Young: We finally have some certainty

Bob Young is chief executive officer of Fleet Mortgages

Elections by their very nature are divisive events and, given our political climate over the past few years, they tend to be even more so now.

The country is clearly polarised and, let’s be honest, the Parliamentary situation in the lead up to 12 December was not helping anyone.

Regardless of what you think of Boris Johnson personally and the rhetoric he uses, he was right in saying that government had effectively come to a halt because of its inability to get anything passed through Parliament, and that was having a deep impact on the UK economy, on our businesses, and of course the general public in their ability to make decisions, particularly on ‘big ticket’ items like property purchase/remortgage, etc.

However, even with last month’s General Election there was always going to be a risk of another hung Parliament and, from our perspective, a Labour-led coalition or minority government which had a combination of policies for the private rental sector which would have caused the biggest damage to the PRS since the ill-conceived 1974 Rents Act.

Having lived through this pernicious legislation, I had no wish to return to those days however we live in a democracy and that was certainly a potential outcome.

Which is perhaps why I treated this election lead-up with more trepidation than many others – it’s my view that the leadership of the Labour Party have viewed the existence of private landlords as not a ‘necessary evil’ but a full-blown evil that needs to be eradicated.

Indeed, part of me thinks it views the entire PRS as a terrible thing and that private landlords only exist to do a number of things – to rip-off working-class tenants, to make as much money as quickly as possible, and to have no interest in the quality of the homes these people live in.

Needless to say, in my line of work, I’ve met a large number of landlords – I am one myself – and with exceptions you could number on one hand, I’ve found them all to be decent people, investing in property yes, but also caring for their tenants and wanting to ensure they are safe, secure and living in excellent conditions.

Of course, you want a market rent from those properties, but on the whole you would probably much prefer to have excellent, long-term tenants in those homes, rather than an extra couple of quid every 12 months.

Again, I’ve lost count of the number of times I’ve heard from landlords who have kept rents at the same levels often for years on end.

From a business perspective and as an intermediary-only buy-to-let lender, I also feared a Labour victory because it would have delivered seismic changes in our sector and, let’s face it, these take time to bed in, they often come with many requirements in terms of being understood and implemented, they bring about unforeseen circumstances, and they can be a major destabilising presence which takes all stakeholders time to react to.

That type of wholesale change tends to un-nerve investors in particular, and I think we would have seen investment – particularly from outside the UK – into buy-to-let lending pulled or at least seriously slowed, while both us as lenders and these institutions secured a complete understanding of what this new world would look like, and how it would have impacted on the market.

As mentioned, because of my long memory, I could see the incredibly negative impact those Labour policies would have had right across the PRS and the buy-to-let market and, I’ll make no apology for feeling mightily relieved on the morning of December 13 when I awoke to find that that outcome had been averted.

Over the past 12 months in particular we’ve all talked a lot about uncertainty and the damaging impact this has had on the UK economy, and all of our individual businesses.

Trying to second-guess what might happen with regards to the UK leaving the EU has been both exhausting and debilitating in terms of investment and resource within our firms. How can you prepare when no-one quite knows what happens next?

A large majority for the Conservatives might not be everyone’s cup of tea but one thing it does do is give certainty and we can all plan accordingly.

My feeling is that many people have been putting off major decisions because of this, but that should start to work itself out during the course of this year.

In that sense, I feel very positive about the PRS, the buy-to-let market and the position of advisers within it.

There will of course be ongoing challenges – our sector is always going to be in the political and regulatory crosshairs – but I believe we have a government that values the PRA and indeed, to a very large extent, is reliant upon it in terms of helping bridge that housing gap.

2020 not only looks more certain for all, but the future does seem bright. It’s now up to us all to make the most of it.