Landlords key… and more homes needed?
‘Thought of the Day’ on the issues of the moment – highlighted of late on this blog from leading Darwen Estate Agency Ainsworth Lord Estates – and coming today compliments of the influential broadcaster from the Grant Thornton Accountants, Mike Warburton. He’s online on South West Business.co.uk Source http://www.southwestbusiness.co.uk/experts/opinion-finance/24082012081418
There are calls for more residential properties to be built for letting. In the UK, we have a love affair with houses and a very high proportion of them are in private ownership.
Impossible to buy
Since the financial crisis hit, however, and many younger people have found it impossible to buy, letting has become the only alternative to staying on with your parents.
An active letting market helps job mobility and can also provide a helpful alternative for investors who struggle to obtain a real inflation adjusted return on their money elsewhere.
I bought my first investment property in 1986 and, at various times, have owned half a dozen. It is seldom mentioned, but becoming a landlord is not as easy as it sounds. There is a mass of regulation to deal with, albeit much of it for entirely appropriate health and safety reasons.
A hidden cost
If you can obtain a gross return of five per cent on your money, you are probably doing well at the moment, but you then have to consider management charges, repairs and voids etc. Then there is the hidden cost of a phone call at 8pm on a Saturday evening to be told that the cooker is not working and what are you going to do about it.
The Housing Minister, Grant Shapps, recognises the problem, but, of course, there are limits on funds available to the Government for building programmes.
New regulations perhaps?
I am probably biased, but I think private landlords have a big part to play in the provision of rented accommodation and as a stimulus to the house building programme, but it might be a good time to take another look at whether all the regulations put on landlords are still appropriate..