Our previous blog on the healthy state of the buy-to-let (BTL) market celebrated the good returns that could be made on rental properties in comparison to other assets. Some other commentators have seen the rise of BTL as a negative force driving the current increase in house prices and making housing even more unaffordable for first-time buyers. The system is not perfect, of course, but Rentify believe that many of the criticisms are unfair. And while more could be done by the Government to help first-time buyers, Rentify believes that this should not come at the direct expense of BTL.
The criticisms regularly fail to acknowledge that many people actually prefer renting to buying: it gives them more freedom. It is incorrect to presume that it’s bad if someone does not own property, but this presumption is widespread. The traditional and very English notion that owning your own home is the ‘be all and end all’ is changing, and not necessarily because finances are dictating it.
The criticisms also often implicitly return to the stereotype of the unscrupulous landlord, always looking to squeeze an extra pound out of the system. This is unfair and false. The majority of landlords have worked hard for their money and are simply trying to invest it soundly. They know that the surest way to success as a landlord is longevity, keeping good tenants in place so they can receive regular income. This is achieved through fair dealings and openness, not unscrupulousness. And if landlords are keeping homes out of the hands of first-time buyers, this is a result not of bad practice, but an insufficient number of properties in the UK.
A final weakness in the criticisms is an excessive focus on London. There is no doubt that it’s now very expensive to rent in the capital but this is not a signifier of a broken system nationwide. London encourages high levels of foreign investment which drives up demand and prices (75% of homes in inner London are bought by foreigners, according to the FT). Thus the problems it creates with BTL are not necessarily applicable to the country as a whole. Indeed, we are seeing an increasingly broad range of landlords investing in BTL, showing it is not the preserve of some ‘elite’ but a viable investment option for people from all walks of life.