NLA In Action
Article Posted - 8th March 2019
This month, Director of Policy and Practice Chris Norris discusses the latest of the NLA's Thought Leadership discussion papers. The paper is designed to tackle the perception that landlords are ‘social parasites', and show that they can play a positive, socially conscious role in society while still running a profitable business.
1. The issue: The benefits of the private rented sector
Preconceptions about landlords have led to characterisations of landlords ranging from the comical to the downright disturbing. There is a perceived imbalance of power, which will almost always lead to mistrust. However, does the fact that private companies and individuals make a profit from providing housing mean that such a lack of trust is warranted, or that everything it does is inherently bad?
By running their businesses, landlords are also providing homes. These homes are frequently in areas where those who keep the country running, such as nurses, teachers, police and firefighters, are often unable to buy. The flexibility of the tenure also, for the most part, allows tenants to stay for as little or as long as they like.
Any successful landlord, making a decent return on their investment, will pay a significant amount of tax, just like any other business, and therefore contribute considerably to the local and national coffers.
Perception cannot change if enforcement action is not taken against those giving landlords a bad name. During 2016, six in 10 local authorities had not prosecuted a single landlord, 80 per cent prosecuted fewer than five landlords, and 60 per cent of all prosecutions were undertaken by the London Borough of Newham.
Landlords and stakeholders need to challenge myths and misleading reports about the PRS.
- The next time you read an article in a newspaper, on a website or on social media that is critical of landlords, be sure to respond. Write a short letter to the editor or post a comment pointing out that private landlords pay enough income tax to build 11 NHS hospitals each year, or fund 760,000 hip-replacement surgeries.
- Email your local MP asking them to table a question in the House of Commons in support of the contribution landlords make to the UK economy. A guide on how to do this and a list of suggested questions can be found at landlords.org.uk/campaigns
- Visit the NLA's Facebook page and share the video explaining this paper.
2. The issue: Brexit
Currently, the UK is set to leave the European Union on 29 March. That said, everything remains unresolved. There is no consensus on the Prime Minister's Withdrawal Agreement. The Labour Party is considering tabling an amendment calling for a second referendum on Brexit, while Theresa May is due to face another ‘meaningful vote' on her amended plan on 12 March 2019. If she fails to push through her deal, there is a possibility that the Government could move to extend Article 50, delaying Brexit. However, the PM will need to request an extension from the EU, which is not guaranteed.
The issues troubling most landlords are the status of non-UK, and in particular EU, citizens, given their responsibilities to police the Government's Right to Rent policy, as well as the overall impact that divergence [Brexit] will have on the stability of the housing market.
It is still too early to predict what impact Brexit will have on property values. A weakening of the appeal of UK investment could drive prices down or a lack of certainty could drive up interest in the relative stability of bricks and mortar.
Likewise, changes to immigration policy could reduce demand from those coming to the UK, or drive up interest from those taking advantage of new arrangements with states outside the EU.
It is likely that landlords with established, well-capitalised portfolios will fare reasonably well. However, those heavily reliant on finance may find uncertain conditions more troubling.
Do you need advice? The NLA's Telephone Advice Line is staffed by our team of experienced landlords, who have a wealth of knowledge. The advice line (020 7840 8939) is free for members. Not yet a member? See here for your joining options.
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