I recently had the opportunity to challenge a lot of nonsense in Parliament. Or to put it another way, I was called to give evidence to a couple of select committees.
I was asked to speak about the desperate need to unfreeze Universal Credit and to discuss the Renters (Reform) Bill recently introduced to Parliament, which are both undeniably crucial to the future of our private rented sector, but I couldn’t help but feel that the parliamentarians were missing the wood for the trees.
In both instances the point was clear. We don’t have enough homes to allow the market to function in the way that it could, and government policy is failing to address the problem. This should be the Government’s number one priority, with opposition parties holding their feet to the fire until it’s resolved, but strangely it’s not.
Don’t get me wrong, we need to fix the welfare system so that it covers the cost of providing decent housing. And it’s crucial that the Renters (Reform) Bill gives landlords the confidence to invest not give rise to yet more sales and market exits. But neither is going to get to the root of the supply crisis facing the PRS today.
I get criticised on a daily basis for pointing out that landlords are struggling to make a profit, or even break even in many cases, at the moment. The argument goes that landlords don’t want to take any risk and think they have a divine right to make a profit.
It’s absolute drivel!
We’re businesses, we know the risks when we make an investment, and we take on more risk of default and property damage from our customers than practically any industry I can think of. It will go wrong sometimes, we may lose money, but we brush ourselves off and go again.
Landlords are not selling property, or taking their investments elsewhere, because they are scared that they may make a loss. They are doing so because all of the evidence points to a system being engineered to make it next to impossible to make a profit.
If the Government, or the next government for that matter, genuinely wants to deal with the supply and affordability of rented housing there are three simple changes they could make that would boost investment almost overnight.
- Stop taxing our revenue. We should all pay our fair share, but tax our profits like any other business and reverse George Osborne’s absurd s24.
- Start encouraging investment in rental properties by scrapping the additional SDLT levy. Help us grow and revenue will increase; and
- Ditch the ‘them and us’ attitude towards landlords and tenants. We aren’t adversaries, we provide a service and they consume it. A landlord able to plan for the future and run a sustainable business good for their customers.
Supply will not increase if landlords feel they are being punished for planning for the future or making a profit. It doesn’t need to be complicated or costly. Successful landlords provide good homes, lots of them, which result in happy tenants.
* Ben Beadle is the chief executive of the National Residential Landlords Association *
Message to Politicians – forget rent controls and BUILD instead!