By Graeme Carling, Property developer and private landlord
BEING a business investor, property developer and private landlord, I should have welcomed the recent report that millennials will rent property all their lives.
According to the Resolution Foundation, up to one-third of millennials in Britain will rent property, as opposed to buying, from cradle to grave. The report demands reforms in the private rental sector, from rent control to strengthened contracts. And there’s a nod to Scotland where, thanks to new tenancy rules brought in last year, some of this is already happening.
As a long-time affordable housing provider, I support the report’s recommendations. But I’ve been reading the accompanying news stories with interest.
I’m fascinated by how the rental sector is treated, by the public and by the media. In everything from casual conversation to newspaper reports, when it comes to stories about people renting their home, the language is subtle, the message clear. Renting is frowned upon, while home ownership is held up as some sort of holy grail. Renters are spoken of in whispers, almost pityingly (“Poor them, they’re still renting!”) Advice columns and personal finance pages are filled with tips on buying property or helping a loved one buy. Even the phrase “property ladder” implies there’s something to escape, and if we’re not careful we’ll fall back into it. Adverts for banks, loans and savings schemes detail all the latest incentives to help us hit that first rung, move “up” and leave this nasty renting thing behind us.
How did Britain get to the stage of treating living in rented accommodation as second-class and so unappealing?
As rental sector models in mainland Europe and the United States prove, it’s more than just OK to rent. When the transaction between the tenant and landlord works, it works well.
The idea of building properties solely for rental purposes is at last gaining some traction among developers here in the U.K. That’s great news for tenants; who doesn’t want a reliable washing machine and wi-fi, and the security of knowing the place won’t be sold from under you?
It’s also good news for us private landlords who are serious about what we do. Because if renters crave stability and security, so do we.
It frustrates me that nine out of 10 of the U.K.’s private landlords own just one property. It frustrates me even more when I hear of tenants who can’t get a roof repaired or a boiler serviced because the landlord can’t afford it or, worse, can’t be bothered.
Letting out properties shouldn’t be the cottage industry it has become. If, as the Resolution Foundation demands, we are to address the UK’s housing crisis, lack of housing stock and spiralling rents, we need a shake-up of private landlords.
In Scotland, things are going in the right direction. The extra costs incurred by the recent Land and Buildings Transaction Tax seem to be putting the squeeze on buy-to-let investors; there is evidence that part-time landlords are pulling out of that market. The new Scottish Private Residential Tenancy, which balances out the power between tenants and landlords, will surely have a similar effect.
But I think more could be done. Compulsory property factors to oversee common repairs is one example. Another is means testing for landlords and agents to show they’re financially able for long-term property management.
Renting is here to stay, and a massive cultural shift is ahead of us. It’s time public perception changed, and private landlords stepped up to the plate. All of us need to start treating renting seriously.
The author owns Carling Property Group, Scotland’s largest independent residential landlord, and is director of the new investment firm United Capital.
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