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I still can't believe that this is a piece from the weekends Guardian !!!
Buy to let On reflection | Have we gone too far in vilifying landlords?
Rogue landlords bring down standards and should be rooted out, but abusing perfectly decent ones is beyond the pale.
Patrick Collinson: I don’t think the Money pages of the Guardian can ever be accused of being pro-landlord. During the extraordinary rise of buy to let we have consistently pointed out its broader social impact, given a voice to groups such as Priced Out and Generation Rent, highlighted abusive practices by letting agents, tried (though not always successfully) to avoid a style of reporting in which house price rises are a good thing, and, more recently, campaigned against the exploitation of leaseholders by freeholders.
But has the vilification of some landlords gone too far? Last week, we published the tale of one landlady who is quitting the buy-to-let market for a mix of reasons, including the new tax hikes. It attracted a vast amount of abuse from people who posted comments online. But it went beyond that, with the author hunted down on Facebook and subject to nasty postings. On Google, her health status was identified, then shared online. One person even went so far as to make up fake one-star reviews of her book on Amazon. The site has removed the offending reviews.
It shouldn’t even be necessary to say that there are good landlords and there are rogue ones. Just like there are good tenants and obnoxious ones. By all means, let’s root out rogue landlords, and the trailblazing work done by Newham council in east London should be followed by local authorities around the country.
Newham council has been able to identify landlords in its borough through an innovative licensing scheme, the first in the UK (though shamefully the government has blocked such initiatives elsewhere). Not only has the local authority uncovered cases of inhuman and unsafe conditions, but its licensing scheme has also instigated 1,135 prosecutions for housing crimes and banned 28 of the worst landlords from operating in the borough. It has overwhelming support from residents and even from most landlords in the borough – because it is rogue landlords who drive down standards and give the decent ones a bad name.
But let’s be clear why buy to let has grown so rapidly in the UK: it wasn’t down to a sudden outbreak of greed, but because government policy facilitated it. The 1996 Housing Act created the assured shorthold tenancy, which gave landlords the power to evict tenants on a no-fault basis after just six months. This gave the green light to banks and building societies to enter the market, safe in the knowledge that they could get possession of a property if the borrower defaulted, with no pesky sitting tenants in the way. The buy-to-let mortgage was born.
Around the same time, banks were loosening their lending criteria, offering multiple jumbo-sized loans, sometimes with little verification of the borrowers, and interest-only deals to keep repayments cheap. Add to the mix a reduction in social housing, low levels of private home construction, a loss of confidence in personal pensions, low interest rates and the huge increase in net inward migration after 1997, and you get near-perfect conditions for an explosion in the private rented sector.
Financially speaking, buying to let has been probably the best thing anybody could have done with their money since 1997, with gains averaging more than 1,400% since then. But the losers are the younger generation, who are now unable to get on the property ladder in large parts of the country, particularly in the capital.
Tax hikes on buy to let and changes to lending criteria have taken the steam out of the market, but more needs to be done – higher rates of capital gains tax on rental properties, changes to the AST to give proper protections to tenants and stricter lending criteria are just a few of the options.
But one thing that is not an option is the sort of vengeful ad hominem attack on a decent landlord we saw last week.
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