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Phil Spencer speaks up for landlords and private rental sector

Location Location Location star Phil Spencer - a former buying agent - says he’s “particularly worried” about the private rental sector.

He says: “I’m particularly worried about the rental market at the moment because tenants are having it really hard because of a lack of choice, which produces inflated rents. It’s good for landlords and is bad for tenants, but that’s actually come about as a result of what is bad for landlords.”

In an interview with the Metro website and newspaper, the TV property guru says: “I’m trying to get people to appreciate is that what is bad for landlords – which is that the tax rules have changed and buy-to-let is not generally an attractive investment – but the changes make it hard to make money which means there are less landlords. Existing landlords are selling up, and new landlords aren’t coming into the market.”

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Spencer says he understands why the landlord typically received little sympathy from the public, but he insists this is a wrong perception and the result of this lack of support means there are fewer places to let and inevitably higher rents.

Recently Spencer set out five reasons why he hoped current and future landlords would keep faith with buy to let, despite the challenges facing the sector through legislation and higher costs.

Firstly, he says capital returns are good albeit not guaranteed. New figures from he Halifax show that at  average UK house prices grew by 20.4 per cent between January 2020 and December 2022, up by £48,620 from £237,895 to £286,515. “We doubt that same level of growth will be seen in the next three years but long term capital appreciation has been consistently good for bricks and mortar” he notes.

Secondly, rental returns have been strong especially in high yield areas. Lettings agency Hamptons estimates that an average property bought in 2017 would have generated £96,000 in rental income over the past six years. 

Thirdly, there seems little prospect of rental demand slowing significantly, as housebuilding levels are low, especially for affordable housing. Fourthly, would-be investors still have the option of owning buy to lets through a company to minimise their tax and overheads.

And finally landlords can genuinely feel they are contributing by providing a home “and it’s not the landlord-tenant battleground some people claim it to be.”

You can see the entirety of Spencer’s interview with the Metro here.

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  • Peter  Roberts

    The Government and Councils are doing the Ostrich Act.
    Burying their heads in the sand and hoping the housing problem that is gathering speed up the road won’t actually happen.
    They seem to think that all the properties that PRS LLs are selling are going to other LLS.
    This is NOT the case..
    Only 1 in 8 of Properties being sold off by PRS LLs are being bought by LLs
    The PRS LLs supply is shrinking and shrinking and in turn supply to the rental market and ever increasing interference by Government and Councils is collapsing and forcing rent costs upwards.
    PRS LLs are not stupid. We are Business People and know when is the time to get out of this sector.
    For many many years, nowhere near enough properties have been built to accommodate the rental requirements in the UK and it shows no sign of change in the
    near future.
    What will happen in the future
    The Council Office will be full of Even More Families that need housing and the Councils will be putting these families into B&Bs and Cheap Hotels. Which Councils will have to pick up the bill.
    These will run short very quickly and the costs to the Government and Councils will rise and rise.
    We already pay 6 Million Pounds EVERY DAY to house the BOAT people coming over from France.
    This will pale into insignificance once the housing crisis gather’s even more speed.
    We have propped up the Housing Market for long enough and are not prepared to continue whilst being constantly battered by what’s seems like daily increased costs levies by Government and Councils.
    Good Luck with this one Government and Councils.

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    Superbly worded Peter. The sad thing is this will fall on deaf ears as most have no clue of what the real problems are, which you clearly pointed out.

     
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    It's £7m per day. It was about £5m per day a couple of years ago.

     
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    Well said Peter. 100% correct. 👍

     
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    The rental demand is a fallacy. The only reason people want to rent is because they can't afford to buy. It's self fulfilling. More appealing property is to landlords the higher house prices go and the less affordable they become to people who want a home. The vast majority of these people don't want to rent, they want to buy. Less profit from renting, lower house prices more people buy, less rental demand. Hopefully that is how it will play out and we'll get back to average house being valued at 4x average salary which is where it always has reverted and stabilised

     
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    Good points by Phil but the government are in a trance …. They are vote hunting and being ‘ soft’ to landlords is not a vote winner.

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    I agree with Mr Spencer's analysis on the cause of the issue. Not convinced of his argument for new investors.
    Good that he has hit the nail on the head, shame he did not mention that around 80% of tenants get on with their Landlord.
    Any positive news is good, where are Landlord groups pushing this news story and flapping it about at the Government and other media outlets.
    Housing is a real problem now and is going to get worse very quickly as fixed rates come to an end and a lot of Landlords will have no choice but to sell.

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    Another 200 Banks closing by end of year to add to the 5000 already gone since 2015.
    That 200 will likely be more high rise Blocks of Flats for the brand new big boys driving us out.

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    No doubt they will be poor conversions full of damp and mould

     
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    Good this got into the Metro paper, so tenants might read it.
    Though doubt Rachel Maclean, housing minister will: she'll probably just keep to her unsubstantiated views; and avoid reading anything which might challenge them.
    Did anyone hear Radio 4's File on Four this last week about terrible social landlords, including repeated problems of toilet in one flat leaking and flooding other flats (tenant had to be moved to hotel)? Their Ombudsman interviewed and highly critical of Housing Assns. conduct and attitude. And follows child dying after health problems in Rochdale Council owned flat. But Ombudsman complaints only 0.1% of social housing tenants (yes, 1 in 1,000).
    And we're going to get an Ombudsman imposed on us LLDs, even if we are not incorporated businesses - just private individuals, unlike letting agents.
    They'll likely charge costs of setting up Ombudsman onto us. So rents will rise even further, just like after the Tenant Fee Ban. Even if the charge is an allowable management expense that can be set off against income before it is taxed. Do feel free to correct me anyone if I have got this wrong.

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    ITN news last night ' private landlords earning millions renting sub standard flats', only it turned out they were not private landlords like us on here, they were big companies housing the homeless referred from councils and paid far more than LHA in order to home the low life scum in society

     
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    Good job Phil Spencer, and thankyou.
    It’s a telling reflection on society that it takes a ‘Celeb’ to get a reasoned voice across in our corrupted and wholly biased media. The landlord community is repeatedly condemned and ignored.

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    Once you conclude that high house prices harm the vast majority of people and it is not moral to profit from someone else's need for a home you will shift your view. And the landlord community, these are investors, do not, like any investor warrant sympathy or special treatment when the investment landscape becomes less favourable

     
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    Nothing wrong in making a profit, that's what pays wages and puts food on peoples plates , how do you earn a living H R ? or do you just collect your U C from the working tax payer ?

     
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    Wow Harsh Reality! You're in the wrong place for anyone to listen to you. As Andy say I suspect you are another UC claiming layabout?

     
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    H R do you think the supermarkets are being immoral because they make a profit selling food, everyone needs?

     
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    Harsh Reality...
    needs to recognise economic reality.

    Yes, high house prices tend to affect buyers (homeowners and BTL landlords) and renters (whether they are renting to save a deposit, or long-term renters).
    High house prices greatly benefit landowners selling land for housing development (not much developers/builders who tend to get their usual %). Also people downsizing (who can pass money gained to help children or their pension).

    If it were "not moral to make profit from someone else's need for a home" housebuilders wouldn't build (nor housing associations who depend on some % of sales on a development to make schemes viable). Only that with direct Govt. subsidy would be built if there was no profit incentive.

    As others have said (very eloquently by Jo Westlake) what landlords want is equal treatment to ordinary companies; fair treatment - not special treatment.

    If investment landscape becomes less favourable in general, this can affect many people's pensions funds (including some parts of public sector pensions indirectly): not a good thing as I see it. If Govt. action makes renting out even less favourable, this harms tenants as well as LLDs. Some tenants understand this; but not the usual anti-landlord groups.

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    Harsh Reality:
    Perhaps there's a whiff of 'the politics of envy' and/or some'delusional ideology' at work here.
    So, if I have the capacity to provide a home for those who for 'whatever reason' cannot currently own one. Am i supposed to simply 'give my accomodation' away?
    If so, how will I make my own living, my property investment is my living?

    So, no, the provision of homes I can and do provide is not 'immoral 'and neither is the 'profit' i need to make in order to provide an independant living for myself and my family.

    Perhaps if there were 'enough homes to go around' for everyone prices would settle at more affordable levels. The current shortage of UK housing of all tenure types is a huge Gov failing and it is the Gov we should all be holding to account.

    No point bashing those that provide what's needed if and when they can, and in doing so, also support themselves.

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