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By Richard Rowntree

Managing Director , Paragon Banking Group

OTHER FEATURES

Ignore political rhetoric - private renting is here to stay

It’s disappointing to say, but once again the rhetoric from both the Labour and Conservative party conferences towards the private rented sector and landlords was, on the whole, negative. 

Let’s face facts, we all know that advocating growth in the private rented sector is not going to garner positive headlines for politicians. Advocating and implementing policy that encourages home ownership is a vote winner. 

But to consistently denigrate the sector, and the landlords that operate within it, will only compound the supply pressures the sector is already facing today. 

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We heard some of the tired cliches about privately renting trotted out again over the course of the two conferences – one more so than the other - both on the main stage and in the fringe meetings, tarnishing the fantastic work that the overwhelming majority of landlords do in providing a fifth of the nation’s households with a home. 

I’m not naive enough to expect this, but it would be refreshing for landlords to hear some praise once in a while, and also for Government to recognise the vital role landlords are playing. 

Praise for the investment they have made to house the millions who can’t find a social home or afford to buy their own home, praise for the social mobility the private rented sector facilitates, praise for providing a home to students, praise for the billions of pounds they have ploughed in to improving and upgrading rental properties.  

Too often we hear about the negative side of the rental market and, of course, that needs to be addressed and stamped out. But let’s do that at the same time as recognising and encouraging those landlords that foster great relationships with their tenants and invest in their homes. 

The private rented sector is facing severe property shortages, particularly in the South East of the country. We have seen smaller-scale landlords sell and a shift into short-term lets in certain markets, such as London and tourist locations. Current tenants are also staying in existing homes for longer, so the turnover of rental homes is stilted.  

The reduction of new homes coming into the private rented sector stems directly from Government policy, including the introduction of the three per cent stamp duty surcharge and the winding down of mortgage interest tax relief. 

And new policy could cause further disruption. The Renters Reform Bill has implications over the ability of landlords to seek possession of their property, whilst the long-awaited minimum Energy Performance Certificate legislation will require broad action from landlords. 

In Scotland, we have seen more severe Government intervention in the form of rent controls. We believe this will discourage investment into the sector and is something we argue strongly against.

Labour leader Sir Kier Starmer called out buy-to-let landlords in his speech when announcing a new target of 70% home ownership and a housing policy that would favour first-time buyers. 

First-time buyers already outweigh purchases by landlords by five to one according to industry figures and the three per cent surcharge on Stamp Duty for buy-to-let purchases helps level that playing field. 

Let the political leaders sabre rattle from their podiums to garner soundbites and votes. 

But at a policy level, let’s focus on creating a housing market that recognises the needs of different cohorts of people at varying stages of their lives. Let’s stop pitting one tenure against another and consider the housing ecosystem in the round. And let’s stop taking cheap shots at a sector that is doing so much good in providing a good quality home to millions of tenants. 

* Richard Rowntree is managing director of mortgages at the Paragon Banking Group *

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    Sorry Richard, but what was the actual point of this article?

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    Keeping taking our BTL mortgages please landlords. My business is drying up!

     
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    Yeah and I have a dinner date with Miss World up on the Moon tonight and she told me she will bring along her pet Unicorn

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    Easy target is what we are. Just a way of deflecting the total incompetence of our career politicians and champagne socialists.

  • Rik Landlord

    Preaching to the choir there.

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    He's right that we need to stop pitting one type of tenure against another.
    There needs to far greater recognition of the different types of both homeownership and letting. It isn't a straightforward two horse situation.
    You have homeowners without a mortgage, homeowners with a mortgage, homeowners with shared ownership, homeowners where the government have underwriten a share of their house (HTB).
    Then you have tenants living in self contained Social Housing, tenants in self contained PRS properties, HMOs on individual tenancy agreements, shared houses on joint tenancy agreements, fixed term tenancies, rolling SPTs, short term let's, Monday to Friday let's, lodging in a landlords home, etc.
    Every type of tenure suits someone. Most people will experience a whole range of different types throughout their life.
    At certain stages in life renting is by far the most cost effective, flexible option.
    In the long term homeownership will probably be best for the majority, but not necessarily if divorce or long term health problems occur.

  •  G romit

    Nice upbeat article, but of course, it must be remembered that the author has a vested interest.
    The realities are that regualtion comes at a cost and as for every business that cost plus the taxation has to be borne by the customer (tenant). If the tenant is unable or unwilling to bear that cost (and accommodation a cheaper rogue Landlord) then the law abiding Landlord will have to sell-up or change business model (e.g. airbnb). Government over-regulation & punitive taxation is therefore driving out good Landlords leaving the rogue Landlords who now have less competition and can charge even higher rents. Tenants end up with even less choice, a shortage of decent properties, and having to put up with sub-standard properties and extortionate rents, further damaging the reputation of those good Landlrods that remain.
    The solution is less & fairier regulation and taxation, and even encouragement of Landlords to invest more into the sector. Competition will drive out (not completely) the rogue element resulting in an overall natural improvement in standards. WIN-WIN

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    Divorce is a good one to knock you back, I know a guy left it a bit late before getting married, he had a property she left after a short time, he had to sell to compensate her, now he hasn’t a property or a woman.

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    Probably better off without both!

     
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    The irony of this article is that the author is a supporter of immense regulation as any applicant to paragon will discover, they are zealots to make sure every tiny aspect of regulation is adhered to. There is absolutely no risk in anything paragon lends ( not that I want them to be risking their money) but they intentionally support more regulations and aren’t there to help landlords

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    Paragon are a dream to deal with compared to some of the others.
    The big plus with Paragon is they don't insist on using a broker and will allow direct application. The forms are lengthy but they have good instructions online and very helpful staff if you need clarification on any part of the application.
    For portfolio landlords who know all the information about their properties and can read mortgage criteria it just removes one layer of potential error and spreads up the communication process.
    Maybe I have been especially unlucky with brokers this year but their mistakes have cost me thousands and lost 2 mortgage offers. Paragon on the other hand were quick and easy to deal with and processed 2 remortgages with extra borrowing in a timely fashion with no complications.
    It's just a question of if you and your property fit their criteria.

     
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    I do agree with the headline......... Private Renting is here to stay...... but not for all of us ! Yes all the legislation is the main reason i am selling up, but age is also another factor. The vast majority of small landlords own 1 or 2 properties, they do not totally rely upon the income, and have full time jobs. I am one of these, my rental properties do not provide any of my income, my wife and I work full time, the BTL's are simply another investment to provide a lump sum when we do retire, with work pensions and state pensions, the properties are simply a nice to have.

    I would hazard a guess that a lot of landlords are just like me, and with the constant hassle and new regulation it is becoming all too much of a pain in the backside, so yes, if they were our sole income then we would need to consider very carefully if we sold or not, but given they are not.... its an easy decision indeed, and i suspect its the same for many thousands of others...... therefore, we have a crisis in supply which will only get worse.

  • Elizabeth Campion

    Crisis in demand Simon. You' ll have me feeling sorry for the tenants 🤗🤗
    It's in landlord interest to look after a good tenant . Mutual investment.
    Unfortunately, they want us to take up the work of social workers. Provide problem families with great homes they don't respect. Probably living in better EPC ratings then our own home.
    Sucks the life out of us don't it

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