UK landlords invest in property for the long term and have been criticised lately, as many feel that they are benefiting from the housing crisis and the increasing number of people who now rely on the private rental sector.
This has led Labour party leader Ed Miliband to announce recently that if he is to win next year’s general election, his party will introduce a number of rent reforms, which place greater restrictions on landlords and provide more security to tenants.
Landlords Invest in Property for the Long Term
Despite this, a recent survey conducted by mortgage specialists Precise Mortgages has found that over a quarter (27%) of all landlords are far from being impulsive, and view their buy-to-let properties as long term investments.
Additionally, there has been an increase in accidental landlords; those who are letting properties due to various situations that are out of their control. This includes not being able to sell their home, or inheriting a property from a family member.
Alan Cleary, Managing Director of Precise Mortgages, discusses the report: “The rental sector appears to be thriving and presents buy-to-let landlords, whatever their genesis, significant opportunity. As a nation, we are renting longer and until much later in life; a demographic and social shift that breaks away from past realities. This is for a variety of reasons, not least that we tend to marry later or migrate across country for jobs and family life.
“This change calls into question the availability and quality of rental stock, and shines a spotlight on landlords. The research demonstrates, that contrary to popular believe that buy-to-let landlords are mere speculators, many landlords are in it for the long term. In order to respond to the changes, to support buy-to-let landlords and bring quality rental stock to market, the mortgage industry must work to develop a truly modern suite of products. Only then can we meet the need of emerging landlords.”1
This study reveals that a large percentage of landlords are purchasing properties in order to provide a solid income, or a comfortable home for their retirement, which indicates that Labour’s plans for stricter restrictions on the private rental sector may put landlords off investing in more properties.
Despite there now being more mortgage and landlord insurance products designed for helping landlords protect their investments, tougher regulations could make this more difficult in the future.