The birth of the buy-to-let industry was to see housing brokerage placed into the hands of the private individual for the very first time. Prior to the 1980’s, it was extremely rare for members of the public to become private landlords: Infrastructure of loans, advice and information was not readily available. The modern style 'buy-to-let' mortgage wasn’t in existence and the idea of purchasing property as a means of funding a retirement income simply did not occur to most people.
The critical change came with the Housing Act of 1988lx, when the Assured Shorthold Tenancy came into being. The ‘AST’ gave both lenders and potential borrowers the confidence that tenants would only reside in a property for a fixed period and the result was an increase in education and accessible finance. This move culminated in phenomenally accelerated growth of the private property marketplace; according to the Council of Mortgage Lenders, more than 1.7 million Buy-to-Let loans were advanced between 1999 and 2015 and there are 4.5 million households living within privately rented accommodation in the UK todaylxi.
Regardless, this sector remains somewhat closed-off to those who are experiencing homelessness, despite it being perhaps the most logical place to quickly seek housing for a person or persons ineligible to purchase a home of their own. The most frequently cited reason for loss of the last settled home is now the ending of an assured shorthold tenancy in the private rented sectorlxii and in the first quarter of 2016 this reason was behind 41% of all statutory homeless acceptances in Londonlxiii.
Shelter identify that more than a million low-income households are struggling to pay even the cheapest available rents in the private sector and could be at risk of eviction by 2020, citing rising rents, benefit freezes and a lack of social housing as contributing factorslxiv. Notwithstanding, this fails to highlight the private providers anticipated to depart the sector as a result of a recent onslaught of changes to practice, including the phasing out of mortgage tax relief, scrapping of the 10% ‘wear and tear’ tax relief, introduction of the 3% stamp duty surcharge, a growing number of licensing schemes and Right to Rent checkslxv.
One of the greatest challenges encountered by private landlords when providing accommodation for poverty stricken or previously homeless households concerns the navigation of a complex and continually evolving welfare benefit system. With a lacking in accessible guidance or support available to private housing providers, a survey of over 1,000 UK landlords conducted by flat and house share website Spareroom found that almost nine out of ten (87%) property owners who accept housing-related benefits
have had problems with payments of rentlxvi.
lx. https://www.legislation.gov.uk/ukpga/1988/50/contents
lxi. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/461439/EHS_Households_2013-14.pdf
lxii. https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01164
lxiii. https://www.housingnet.co.uk/pdf/Statutory_Homelessness_England_July16.pdf
lxiv. https://england.shelter.org.uk/_data/assets/pdf_file/0004/1391701/2017_06_Shut_out_the_barriers_low_income_households_face_in_pivate_renting.pdf (Web version unavailable)
lxv. https://www.which.co.uk/news/2017/06/12-things-buy-to-let-landlords-need-to-know-in-2017/
lxvi. https://www.insidehousing.co.uk//private-landlords-snubbing-tenants-on-benefits/6519958.article (Web version unavailable)
Copyright © by Amy.F.Varle, January 2018.
The moral right of the author has been asserted.
The views and opinions expressed in this report and its content are those of the author and not of the Winston Churchill Memorial Trust, which has no responsibility or liability for any part of the report.
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