A question that must be on the lips of many residential landlords as well as the employees of huge housing associations.
Buy to let mortgages are available but the constant cry from landlords looking to increase their portfolio is that the deposits required are just too high. With home loans dropping to their lowest in years during August 2010, it would seem that private landlords will have a big part to play in getting the UK through the austerity years. There does not, however, seem to be any well thought out plan by those in power to alleviate the housing shortage. After all someone has to buy property.
At the moment landlords are having a good time of it; rental income is slowly creeping up as the laws of supply and demand take hold, but for how long? It would appear that for the near future at least, landlords who can afford to extend their portfolios and buy landlord insurance for the properties, will have tenants queuing up to sign agreements as they can’t get on the housing ladder. There is, however, one very big blot on the landscape.
The government cuts in Local Housing Allowance will come into play next month. Many landlords especially those in the South East who provide housing to benefit claimants will soon have to make a decision. Do they allow the tenant to get into arrears when their allowances are cut, or do they cut the rents to suit the benefit allowance? Already many have said they will evict tenants who fall in arrears, but in all seriousness no landlord wants to do this, it creates bad feelings, bad press and, at the end of day leaves the landlord with a void period.
Housing associations who often get access to public funds will also have tenants who suddenly find that they have a black hole between their rent and their income. The pressure on these landlords will be immense as social housing also attracts workers on low wages, the sort of workers who may well find their jobs disappear when the government cuts take hold. Already employees of one contractor to social housing schemes have found themselves out of work as the firm collapsed. Will the pressures of government cuts cause the housing associations to lower their rents, and will this then put pressure on their finances in other areas?
The UK landlord awaits the future months with interest.