needed rental stock, prevent rents from skyrocketing further, and thousands more people turning to the state for housing, or even risking homelessness. The buy-to-let market took off following the enactment of the Housing Act 1988, which introduced Assured Shorthold Tenancies. These encouraged more property owners to rent out homes which could otherwise have sat empty – because they provided some assurance that tenants could be given notice to leave when required by the landlord. That Act was passed under Margaret Thatcher’s Conservative government – so it’s interesting that what has come to be perceived as a ‘war on landlords’ has since been waged by a Conservative administration. But landlords don’t seem to have much faith the prospect of a Labour Government either: Research carried out in May by Landbay revealed that 48% of landlords have concerns about a change of government. Some believe the Labour party is traditionally ‘landlord-unfriendly’, while one respondent said: “Everyone is anti-landlord. With a lack of affordable housing, we are the scapegoats. They have increased our tax and compliance burden.” Whoever forms the next government must act quickly to allay landlord fears of further tax increases and regulatory tightening. And they must assure private rented sector providers that they do not buy into the stale old narrative of ‘rich, greedy landlord/poor, put-upon tenant’ which has dominated for too long. Of course, tenants’ needs and concerns must be understood, but it is also important to understand the reality facing landlords. The IMLA Landlord Survey published last December revealed a market predominantly supplied by small businesspeople who will struggle to break even in the next two years. Those with mortgages may see their cost of borrowing soaring by as much as 80% as they refinance off historically low fixed rates. The research also found that most landlords do not have significant resources to draw on outside their rental business. On average, landlords’ non-rental income is roughly in line with tenant income, except in London where tenants earn substantially more. The new government must understand this, and acknowledge the essential role buyto-let landlords play in the PRS. Of course, there are some bad eggs in the landlord community, but the focus should be concentrated on removing the few problem providers, while supporting the majority, good landlords who genuinely care about their tenants, and are trying to run a viable business. Labour has talked about expanding owner occupation and the social rented sector. These are both laudable aims, which everyone would welcome if Labour does come to power in July. Indeed, we desperately need to see a rapid increase in the provision of social rented housing. But neither of these aims needs to come at the expense of the PRS, which currently provides a home for almost 20% of the UK’s households - more than the social rented sector, which provides approximately 18%. According to Landbay’s research, only 12% of buy-to-let landlords said in May that they planned to vote Labour, 31% Conservative and 5% Lib Dem. Some 41% said they had not decided who to vote for at that time. At the time of writing, no political party had made any noises about support for landlords in order to attract their vote. In any case, soundbites and platitudes are not what the sector needs, even if one party or another were minded to offer them. There is an opportunity to be grabbed here: we need a cogent, cohesive, long-term plan to address the chronic housing shortage in the UK, which starts immediately but looks beyond the next few five-year parliaments. That plan needs to boost housebuilding for owner occupiers, private renters and social renters alike. Buy-to-let landlords need to be included, and the new administration would be wise to indicate - early and clearly - their support for these small businesspeople who provide an essential part of the UK’s housing landscape. 07 SUMMER MORTGAGE NEWSLETTER
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