This story was taken from the recent publication by Property 118 titled: “SECTION 24 of the Finance (no.2) Act 2015: “The unjust legislation that will make the UK housing crisis much worse””
We often invest in old, sometimes decrepit housing and we restore it and bring it back into use. When we do this, it is a financial gamble as property values can go up or down.
If private landlords were not willing to take these business risks there would be a massive shortage of housing in this country, as the Government relies on private individuals to take these risks (having sold off council houses for example and then not replaced them).
We provide comfortable, safe housing for millions of people. This housing is safer than ordinary owner-occupied housing, as we have the gas safety checked every year and also ensure electrics and so on are safe. We then provide 24-hour help to our tenants, so any problem they experience at the house (a burst pipe, a leak etc.) becomes our problem and we sort it out. These tenants have complete mobility as they only need to give us one month’s notice and they can leave if they want to move away for a new job or whatever reason. This flexibility of the workforce also supports the economy.
We employ builders, plumbers, electricians, carpenters, painters and decorators…. the list goes on, including also buying supplies from DIY stores, furniture suppliers, locksmiths – we support all manner of businesses, who then pay taxes and keep the economy moving. We invest massive amounts of money in this way every month of every year. We also pay a considerable amount of tax ourselves.
We support estate agents, the financial services, through the massive amount of interest we pay to mortgage companies and banks over the years, brokers, and also through insurance policies, conveyancing lawyers and so on. We employ and pay large amounts to letting agencies also. This also keeps a substantial number of people in permanent employment.
Of late, through unnecessary and pointless licencing by councils and the massive fees that they charge, with a monopoly on this (they effectively write their own cheques and we sign them), we even prop up the finances of local councils.
We run the risk of getting tenants from hell – this can happen despite us taking all kinds of precautions, and the law gives us very few rights to recover the money owed to us. Sometimes we even take on tenants known to have alcohol or drug dependencies as we can be a bit soft. Often then, we get our houses wrecked in return for our charitable attitude. Councils and the Citizens Advice Bureaux then advise these tenants to stick it out for as long as possible whilst paying no rent, meaning we as landlords are even more out of pocket.
We get the finger pointed at us when we let to groups of students or professionals. For example, we may convert a Victorian house into a 6-bed, 2 bathroom house. This enables individuals to pay a low rent for a room plus communal facilities. This is often seen as some money-grabbing, cynical move by landlords. In fact, it is profitable for the landlord, great for the tenant (who only spends a small part of their disposable income on housing), and is a great use of space. How can it be seen as preferable for one person (an owner-occupier) to have use of a whole house for themselves? Heating and lighting a house for 6 people is a great, environmentally friendly use of housing and tenants often prefer it as they have ready-made friends and company. And yet we get criticised for this instead of being praised and encouraged.
Yes, landlords aim to make a profit from all of this work, but so do all businesses and indeed all people who go out to work.