Leading buy-to-let lender Paragon has released a report that suggests landlords are not getting sufficient help in maintaining their investment.
The survey from Paragon indicates that 78% of landlords questioned said that they believe there is significant requirement for advice on landlord matters. For landlords owning a portfolio of 11 or more properties, this figure rose to 89%.
There have been calls from the private rental industry for some kind of regulation in the letting sector for a number of years. Complaints to the Property Ombudsman from both tenants and landlords alike rose by 9% in the previous year.
The Government has introduced a crackdown on rogue agents, with agents responsible for repaying tenants or landlords who have been treated unjustly.
In last month’s Queen’s Speech, her majesty announced the proposal that landlords are to become responsible for background checks on all of their tenants, to ascertain their eligibility to live within the UK. Landlords subsequently found to be renting to illegal migrants will face hefty fines.
The proposal has been met with disdain from landlords, who believe that the plan to get them to combat immigration is unfair and will add more complications to the buy-to-let industry.
Landlords need more Advice on Increasing Regulations
Following this angry response, the Government is looking at ways to adapt their proposals and Eric Pickles, Communities Secretary, is reportedly in continued discussions with the Prime Minister.
A Whitehall source recently told the Daily Express that the Government want to bring in regulation “that does not inflict red tape on millions of people.”
The source went on to say: “What we want to avoid is disproportionate regulations on the private rented sector. If you are British, we don’t want a bureaucratic check, the cost of which is passed on to the landlord and then the tenant.
“It is a question of getting the balance right and targeting the regulations at high-risk areas.”
Unsurprisingly, Paragon’s report found a high majority of landlords were opposed to the changes. 90% said that they thought the potential added workload, on top of taxes and existing regulation, would lead to it being even tougher as a landlord moving forwards.
Furthermore, 46% of private landlords stated that they were already finding changes in legislation difficult to follow. 43% said that they were concerned about the impending impact of Universal Credit on the sector. 54% of landlords said that additional licensing would affect them the most.
Help and Advice
Paragon’s Director of Mortgages, John Heron, said that the findings made for interesting reading. Heron stated that it is “interesting to note that although many of the landlords surveyed were greatly experienced, having owned buy-to-let properties for a considerable time, there is still a need across the board for information, help and advice. Of course the buy-to-let landscape never stays the same, and new regulations affect professional landlords just as much as they do those who are relative newcomers to the market.
“Paragon would always advise our customers, experienced or otherwise, to do their homework before they commit to buy a rental property; research the market, the area and also their obligations as landlords.
“Buy-to-let isn’t a short-term investment; many of our customers have been landlords for more than two decades, and see their portfolios as an alternative to a pension when they retire.”