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Government must learn landlords are not just a cash cow – Young

by: Bob Young, chief executive officer of Fleet Mortgages
  • 08/10/2018
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Government must learn landlords are not just a cash cow – Young
Much is often made in our sector about the ongoing and increasing pressure on private landlords and there’s no doubting this has been, and will continue to be, intense.

 

The new regulations being introduced reclassify far more properties as houses in multiple occupation (HMOs), which means greater licensing requirements and thus increased costs for landlords in order to meet them.

Advisers should ensure they are fully aware of the changes, how they might impact on their client’s property and what might that mean in terms of access to HMO finance.

And landlords should not think this is the end of the matter by a long chalk.

Those who might have taken an interest will have heard of more measures that are on the horizon or could be introduced if the opposition win the next General Election.

These included banning ‘no fault’ evictions, three-year tenancies, banning letting agent fees and giving cities powers to introduce rent controls.

 

Rental sector Armageddon

Now, some of those policies seem eminently sensible – a number of landlords would welcome longer tenancies as it provides greater certainty.

However, my views on rent control are well known – welcome to private rental sector Armageddon if that ever sees the light of day.

This ongoing intervention, by all political and regulatory stakeholders is the price that must be paid for being involved in today’s buy-to-let sector – one that might seem a world away from the norm a decade or so ago.

However, while pressure is heaped upon landlords, those in power don’t appear to acknowledge that the knock-on impact for tenants is just as, or perhaps even more, intense.

Just last month, the government announced its own figures on private rents which showed that across the UK, the cost of renting had risen by 0.9% in the 12 months to August.

There is no doubting that the intervention we see so readily across the piece is contributing to the rent rises – how could it not?

 

Tenants will be the target

Landlords have so many more pressures to cope with – including the cut to mortgage interest tax relief, running limited companies, increased EPC requirements, HMO licensing laws, plus of course the stamp duty surcharge.

Where can they go to recoup some of this cost and ensure that the portfolio remains profitable?

There really is only one place, which is why tenants will continue to feel the squeeze on rents until the government starts to view the sector as an important part of the UK’s housing supply, and not just a cash cow or the ‘root of all evil’.

Measures which might appear to be pro-tenant could be anything but, and if supply of quality private rental homes continues to slip, then the government of the day is going to have an almighty issue on its hands.

There needs to be a much more measured approach and an acknowledgement that without private landlords we no longer have tenants to protect.

 

 

 

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