The inaugural Great Buy to Let Debate in Westminster saw landlords, agents and lenders all voice their concern and confusion over upcoming Government proposed schemes aimed at aiding the housing market. Many of these industry figures suggest that more thorough streamlining of the policies is needed before they become law. Others have described them as contradictory to what regulations already in place.
Lack of strategy
Speaking at the event, vice president of the Association of Residential Landlords Valerie Bannister, said that the Government had no clear vision of their housing strategy. Bannister argued that, ‘successive governments without a long-term housing strategy have got us into this situation we are now in, and the private rental sector is supposed to pick up the shortfall.’
Lenders at the event gave their opinion that the Government’s primary schemes for improving the housing industry, such as NewBuy and Funding for Lending, will actually serve as hindrance.
John Heron, managing director of lender Paragon Mortgages, is one figure confused at the Government’s planned reforms. Heron said, ‘Politicians are tinkering around at the edges and seeking headlines. They are being schizophrenic. On the one hand, they are doing everything they can to drive lenders away from high-risk lending. One the other hand, they are coming up with initiatives encouraging 95% on new-builds to first-time buyers.’
Government housing policies under fire
Landlords are also confused by the Government policies. The Government suggests that landlords are to help with vulnerable tenants, however, landlords believe that outlines in new welfare reforms will actually make this more complicated.
With the introduction of Universal Credit, tenants in receipt of housing benefit will see their payments given directly to them in one lump sum. As a result of this, landlords are concerned that rental arrears will rise as they believe many tenants lack the budgeting skills in order to stay out of the red.
Landlords are also concerned that rent arrears may have a knock-on affect which may lead them to alter their insurance policies. It seems inevitable that landlords will have to increase their rent prices, which again will leave vulnerable tenants feeling the pinch.