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More Competition for the Buy to Let Private Landlord

The private landlord has a hard time; whilst many are aware that tenants will seek private rented properties because of better standards, sometimes better areas, there will also be those who believe that private rented accommodation is the worst deal available for tenants and strive to persuade others of this stance. 

I wrote a little time ago of the encouragement that seems to be given to the corporate landlord, the large companies who build new properties in large numbers; they would make up the shortfall there is between what social landlords can provide. Easier to control perhaps than the small private landlord?

I was surprised to read recently that a number of private builders have decided that as they cannot make profitable enough deals with housing associations, they will register themselves as social landlords. Hopkins Homes has a turnover of £166 million; with concerns that the homes they are building will not be affordable without branding as a housing association, they have registered Peal Community Housing as a housing association. 

Others have gone the same way; Larkfleet Homes opened Swift Homes as an association in 2018. The Chief Executive of Larkfleet, Karl Hicks, stated ‘It is becoming increasingly difficult for associations to obtain the funds to buy new homes. We have therefore set up Swift…to take on this role directly’.

It seems probable that if these housing associations, and the others like them, operate with success, there will be others that will swiftly follow. Chris Wakefield, a director of Park Properties which registered in September said that there were problems with bureaucracy (there’s a surprise) but echoing other private builder Housing Associations, that the original housing associations, had been known to offer ‘less than build cost’ for developments. Of all the people that should be working for charity and negative profit, it is not fair to expect private builders to join that number. 

But are a housing association the way to ensure houses get built and a fair deal be found all round? I think it will be confusing for many people. Will the properties be offered on the same terms as a social property? Will the tenants appreciate the differences, if there are any?

Why is this challenge for the private landlord? Brand new properties will always seem more appealing to some than a characterful, and probably more spacious, older property. I think the grants that landlords used, having diminished, will disappear; the landlords that the Government will want are the corporate lettings. I hope it will work, but not to the detriment of the many caring and responsive private landlords that the local authorities have relied on.

I cannot fail to mention this week that Amber Rudd has had the courage to say that Universal Credit is not working and that more changes need to be put in place if it is to effectively provide benefits to those that need them. Well said, Ms Rudd. Is she making a place for herself as the landlords’ friend? There may be a general election before long – Amber Rudd as Prime Minister? Remember you heard it here first!

For advice on buy to let issues – General Knowledge

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