Guarded confidence characterizes buy-to-let sector
A clear majority of landlords expressed confidence in the prospects of Britain’s buy-to-let sector, but this optimism is moderated by serious concerns over excessive regulation and legislative changes. Fully 61% of landlords believe that the rental sector is heading in the right direction, according to a poll conducted by Upad.co.uk. But 39% of landlords expressed major worries about the fact that government appears especially keen to introduce new forms of potentially punitive regulation of the buy-to-let sector, as well as key legislative changes. One of the continuing concerns that many landlords have is the fact that government housing benefits are still being paid to tenants who might not use this aid to cover their rent. Landlords have called for these housing benefits to be transferred directly to them, in order to ensure the payment of rental fees.
But the 61% of landlords who do feel increasing confidence point to two interrelated trends in the buy-to-let sector. First, the supply of rental properties is no longer growing by the proportions seen last year, when thousands of Britons who were unable to sell their homes due to the financial crisis became temporary “reluctant landlords.” Secondly, a lower supply of available flats and houses for rent is coupled by a steady stream of tenants looking to rent over the long-term, due to changing perceptions of the buy-to-let market and homeownership among Britons, as well as the flexibility that many young professionals attach to the rental of home. Renting a house allows tenants to relocate with ease to regions with the most employment opportunities.
James Davis, Upad’s chief executive, expressed some surprise when the results of his survey were revealed, considering that many observers expected a “shaky month” after worries surrounding the government’s budget, an uncertain general election in May, as well as new regulation.