by Mark Johnston
Are Landlords to Blame for the Housing Crisis?
The financial crisis drastically reduced the ability of young, first time buyers to purchase a property. However the financial crisis did not deter cash rich investors from building portfolios at a time of rising rents.
It appears then that the private rented sector is expanding rapidly.
Government figures show the number of households in the private rented sector has grown from two million in 2000 to almost four million today.
Inside experts claim that one of the major reasons why so few first time buyers can not get on the property ladder is because huge numbers of properties are not purchased to live in, but to speculate on.
Current data has shown that in the past decade, 1.8 million buy to let properties have been created.
Britain’s private landlords are now therefore facing another barrage of criticism.
In recent weeks any mention of private landlords in the media has been a negative one. Usually by a political party calling for “crack downs on rouge landlords” or a “cap on rents to avoid tenants being ripped off” or some other grim claim that landlords are taking advantage of tenants in the thousands up and down the country.
Pricedout.org.uk, a lobby group representing younger, aspirant homeowners, has called for landlords to be stripped of their right to offset mortgage interest against tax as a business expense.
The Strategic Society Centre a think tank proposes that mortgage lenders be restricted to lending only 5 per cent of their book to buy to let landlords.
Experts believe that if a generation can no longer aspire to become part of the ‘property-owning democracy’, then the Government must bite the bullet and create more secure tenancy agreements.
The government should also introduce new regulations preventing buy to let landlords from buying newly built properties, as building new homes will never be enough for the government to help people’s aspiration for home ownership without new restrictions to ensure that new build homes go to new homeowners.
However, Richard Lambert of the National Landlords Association, the biggest representative body for landlords, suggests “many industry experts have decided that owner occupation is best and that Government should rig the markets to achieve this. They just seem to want to prove their preconception that the growth of the private rented sector is the cause of problems in the housing market rather than a consequence of them.
Those on the side of the landlords feel that blaming landlords for the housing crisis is like blaming pubs for drink problems.
So whilst it is easy to target landlords as the course of the problems in the rental market it simply is not a valid explanation. Sure there are rogue landlords, but they will no doubt be in a much much smaller minority than the politicians who are looking for scapegoats will want you to believe!
It is supply and demand which determines the housing market which are two factors in which landlords certainly have no control over.
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