Mention landlords to the general public and it is a safe bet that one of two images will spring to mind, reflecting what the popular perception of a landlord is: A Rigsby-type character, owning disreputable and insanitary houses in multiple occupation, or a rich uncaring landlord whose interest is only in making substantial sums of money from his hard-working tenants. Though either could be true for some, for the majority of landlords, neither is true.
The Rigsby’s should not be able to survive long in this time of increased legislation, licensing and accreditation schemes. Shouldn’t be able to, but do, in some areas where demand for housing of any kind is so great and with cuts which have hit so savagely, that proactive inspections by Public Health Units are no longer possible. These landlords bring disrepute on the private sector, which houses so many.
As for the wealthy landlord, yes there are plenty of those around who find that letting their portfolios brings a very healthy income. Some will be so determined on profit that they will exclude benefit dependents and anyone else they deem unable to pay the rents demanded. Others will behave with kindness to their tenants and find they have long-stay tenants who become friends.
But neither category, Rigsby or the Duke of Westminster, are the norm. The norm is more likely to be the person who has had a property left to them and want to make something from it, or the person who decided to follow the advice of the then Chancellor, Gordon Brown, following the pensions crash, to buy a property as a pension pot for the future. They may have had no wish to increase their single or double investment property into a sizable portfolio.
HomeLet conducted a national survey in 2015 which tried to get as diverse a response as they could. Although there were only 2,000 who completed the survey, the findings showed that 32% were aged 60+; 55% of the landlords had only 1 property, with 36% having 2 or 3 properties.
Those small landlords who have now reached their senior years find that other investments are declining, savings are earning little. If anything; the additional income from the property intended to give them a better retirement, is all that is keeping their heads above water.
Statistics provided by Responsible Equity Release show that 81% (8 out of 10) of pensioners who own a property which they rent out state that this provided a vital boost to their retirement income. 72% (almost three quarters) stated even more strongly that they would struggle to make ends meet, were it not for the income they received from property.
That so many can see their rental income as such a necessity, though the legislative requirements now add so much to the costs the landlord incurs is an indicator of the value that the older generation place on ‘paying their own way’. The recent tax changes however, are making a considerable number of pensioner landlords re-think their strategy.
Is it worthwhile for them to have the hassle of renting a property, re-furbishing, replacing items, for the income they receive? Some will sell their properties and lose the income, though in the short-term, they will have the capital from the sale – which will mean they are unable to claim benefits, but still live on the inadequate means which required the rental income in the first place.
It is a short-sighted policy which hits all in the same way, whether they be Dukes or ordinary, working people. The difference is, the Dukes may have additional resources and clever accountants who can make up the short-fall in some way. ‘The typical landlord’ sadly, does not.
For advice on buy to let issues – Ask Sharon