21 Feb 23
Two key figures jumped out from the National Residential Landlords Association’s (NRLA) excellent recent report on the private rented sector – A Housing Market that Works for Everyone.
The first was that only 18 per cent of private renters would have brought a home already if they could have, and the second is that the rented sector is the home of the working population – 77.5 per cent of private renters are in work.
The notion that all renters are forced to live in the tenure against their will has seeped into public consciousness – and quite frankly it’s damaging.
Our national obsession with home ownership skews housing policy so that we are left with short-termism and podium politics; the voter-friendly soundbite promising support for first-time buyers winning above sensible long-term planning and strategy for the benefit of all tenures.
It is obvious that not everybody wants, or has the ability, to buy a home, but from media to policymakers, it’s a point that seems to get lost. It’s also a common myth that landlords push first-time buyers out of the market, yet the number of mortgages taken out last year to buy a first home outweighed those taken to purchase a buy-to-let property by three to one.
The NRLA’s report found that the majority of people aspire to own, but they either can’t, it just isn’t quite right for their circumstances or they are simply happy to continue to rent for now. This chimes with our own research of tenants, which found that two-thirds want to buy, but only a third are actively saving to do so.
There’s a myriad of reasons why people renting aren’t in a position to buy, and the hike in mortgage rates following the mini-budget puts home ownership even further out of reach for many. But others simply don’t want the cost of owning a property, or strive for the flexibility and convenience that renting offers.
As the NRLA’s report states – there are strong cohorts of tenants who want or need to rent, and the job of landlords is to provide a good quality home for these people.
I have been disheartened and disappointed by some of the recent national media coverage of the rental sector, which has bordered on hysterical to downright misleading. One recent Sunday broadsheet’s article on what it is like to be a tenant in 2023 offered a completely distorted view of the market, which was garnered by the journalist tweeting and asking for people’s poor experience of renting.
It completely misrepresented the excellent work undertaken by the majority of landlords, who not only provide a good home for tenants, but also benefit the broader economy through their own tax contribution and by also enabling economic fluidity.
Landlords do not create tenant demand, they react to it, which brings me on to the second stat regarding three-quarters of tenants being in work. The PRS facilitates economic fluidity and I believe this role goes largely unrecognised. As local economies evolve and grow, landlords provide the transient housing that is often required to support that growth.
If I look at our own book, you can see examples of this. The East Midlands, for example, has experienced strong buy-to-let growth on the back of the expansion of that region’s distribution and logistics network.
As the Government pursues its Levelling-Up agenda, it’s never been more important to have a committed group of landlords who have the desire and ability to react to changes in the population’s housing needs. It’s about time that role was recognised and understood, something we’ll continue to take an active part in working towards alongside the NRLA.
* Richard Rowntree is Managing Director of Mortgages at Paragon Bank *
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