Landlords under fire

buy to letLandlords could be forgiven for feeling like pariahs just now. The government is working hard to make it really difficult to be a landlord, which seems more than a little out of kilter in a market that needs more, not fewer homes for rent

Ringley is retained by and advising top institutional build to rent developers in England and Ireland and has just announced a joint venture with JP Hay which is very active in the BTR market in Manchester.  With housing need so acute right across the country, supply has to be the answer so the more the better.  Bring it on, we say!

The current thinking around the private rented sector is clearly to foster institutional investment and encourage the big developers to flood the market with purpose-designed build to rent accommodation, while taxing smaller buy-to-let landlords out of the market, in theory leaving the big boys to do it better. But not all renters want to live in an institution-run building and many may prefer a flat in a small development or a house. In light of rising house prices and a rapidly expanding rental sector surely there has to be room for a broad range of property that includes HMOs, family homes and older as well as new build housing stock in addition to the shiny new apartment blocks that are springing up across the country.

The other aspect that we believe needs revisiting is taxation. According to new research from the National Landlords Association, the rental income received by 79% of landlords with mortgages is only sufficient to service the interest element of their loans, and not pay down their debts, as they contend with rising costs. How is it possible to justify taxing buy-to-let landlords differently to institutional landlords – it is clearly unfair.  The government has failed again and again at meeting its own housing targets.  Arguably, only on immigration targets is its track record worse. And the government is equally scared about funding pensions for our aging population.   So, if a buy-to-let landlord is delivering both a home to a tenant and simultaneously providing for their own old age via property investment, instead of expecting government handouts then surely the BTL sector deserves support? Our solution is simple: instead of forcing BTL landlords out of the market, why not limit the number of properties they can own and monitor them properly to keep the rogues out of the market.

The Tenants Bill now going through Parliament is rightly trying to make the market fair and transparent for renters. But there is a balancing act here. For the pendulum to swing too far in the direction of tenants without also addressing the genuine needs of landlords, many may decide to call it quits. That would worsen, not alleviate, our current housing crisis and would be an embarrassing own-goal for government.

As the NLA said this week, encourage building more housing of all tenures by simplifying planning and borrowing rules and stop taxing professional landlords out of the market. The loss of good landlords will not make renting more affordable; it will simply drive up the cost for those who want to access decent rented homes.