Olympic Property Letting Frauds Plus Private Landlords and the Media
Summary – Why the private rented sector is in the news so much. Plus, a prediction of coming Olympic property letting fraud.
So, the private rented sector is in the news. Indeed it is in the news a lot.
And that’s not surprising because, for the first time since the 1960s, more property is in the private rented sector than is in the whole social housing sector.
As someone who has been a private landlord for quite a long time the news and the attention is kind of interesting – and a little bit unsettling.
Indeed part of me feels a bit like a famous professional investor in the stock market (it may have been Warren Buffett – I can’t recall) who once said, “You know you are in a stock market bubble (and therefore time to run for the exits) when the shoe shine boy starts talking about the stocks he is buying.” No offence to shoe shiners intended.
Local Authorities and the Private Rented Sector
Only two or three years ago most local authorities were producing 5 year housing strategy papers and plans in which mention of the private rented sector was somewhere down on page 94.
But now that the councils have woken to the effects of the three pronged impact of housing benefit cuts, rising private rents and the implications of their new homelessness duties, they are getting worried.
And so, they are starting to think seriously about their strategies for the private rented sector – in particular, how on earth are they are going to get private landlords interested in letting to the previously homeless or even to those on housing benefits.
The Heat is on
The change and the heat are palpable. You can breathe the pressure the councils are under.
Now, I’m suddenly asked to be a regular key note speaker at local authority housing strategy days and the private rented sector has moved up to page 1.
A few lenders are also getting savvier too as they realise that cleverer underwriting techniques could help catch them the best landlords and significantly multiply the profits on their buy to let mortgage books.
Any other reasons for the press interest?
Well, a lot of it is also driven by LSL’s monthly rental property index, which keeps showing rent levels marching ever upwards.
This produces a monthly panic as the media scramble to find a new clutch of first time buyers who cannot get on the property ladder. (I have some sympathy, though not for the type of young case study who say, “Giles and I just can’t find anywhere in Islington, Hale Barnes or Lisvane darling.” Insert your own up-market locale!)
Big Rental Increases are a Recent Phenomenon (though here to stay)
On Vanessa Feltz’s London Radio show last week I pointed out that the big increases in rents are actually a recent phenomenon and some perspective is needed.
I added that in the 10 years to 2008, rents went up much slower than house prices as lots of new build flats came on stream and frustrated house sellers turned to being landlords. This fully soaked up the huge rises in immigration and kept rent increases low.
And I’m sure the rising rents (and continuing grim news from the stock market) will once again, attract new landlords to buy to let and bring more new letting stock on stream.
Record recent sales of the brand new edition of my book suggest this may be happening already. And who knows, even the big institutions may even dip their toes into “build to let.” (But don’t hold your breath, they’ll probably continue to prefer investing in the ever shrinking retail parks and high streets.)
But, as I said on the Vanessa show, I don’t think any of this will be enough, this time, to halt the upward march of rents.
So expect the private rented sector to continue to be in the news and the reportage to be a little mixed and miffed and occasionally anti-landlord. (I’m not sure if this is a factor but hardly any national or regional newspaper or broadcast journalists who have interviewed me are landlords themselves. In fact few of them are home owners.)
Finally, here’s a prediction that you (hopefully) heard here first: All the Olympic hype about (supposedly) millions of people visiting our country and paying supposedly big money for two week short term lets during the games, is probably just so much baloney.
One thing is for sure though – it’s a fraudster’s gift. I fully expect to see lots of inexperienced landlords ending the contracts of perfectly good, long staying tenants and then going on to lose their shirts and possibly property too to bogus “We’ll let your property during the games” operations. Don’t be one of them.
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