Following the nationalisation of the mortgage business of Bradford & Bingley, there have been a number of commentators quick to support the view that buy-to-let, as a concept, has come off the rails.
For a wide range of reasons, the NLA believes this is fundamentally not the case:
* Only 25 to 30 per cent of landlords actually use buy-to-let mortgages to finance their property purchases. This leaves a large number of private landlords untouched by the situation at Bradford & Bingley.
* With EU expansion and globalisation, immigration continues to rise. This further pushes demand for rental accommodation. An increasingly mobile workforce is also a key factor.
* Student population is growing with over 2.5 million students now in university education and, for the most part, requiring rental accommodation.
* There are more households owing to divorce, later marriage and other lifestyle factors. This means more people renting for longer.
* The majority of landlords are motivated by long term objectives holding on to property for around 15 years. It is highly unlikely that rental demand would reduce in a downturn.
* Next to no increase in social housing provision means families increasingly look to the private-rented sector for housing solutions.
Simon Gordon, Head of Communications, NLA, said: “It is simply not true that the nation’s landlords are now facing some sort of crisis. For the cautious and mature investor who has bought the right property in the right location, they will be seeing an increase in rents and can expect demand to keep climbing. This kind of market is not for the feint-hearted and the landlords who may be struggling may well be the more recent entrants with more highly geared portfolios.”