June 2004
Nargis Kayani - Housing horrors

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EHJ June 2004, pages 171

 

Lately it appears that anyone can enter the lucrative world of the private-rented sector...

The buy-to-let phenomenon has spawned a new generation of social landlord. Many financial institutions are eager to provide buy-to-let mortgage products, allowing landlords to accumulate a property portfolio with relative ease. According to the Council of Mortgage Lenders (CML) rental lending in the second half of 2003 rose 75 per cent from the previous year.

Across Britain, property has become too expensive for first time buyers. Many local authorities are also not building new homes for rent. In this climate, a new breed of "part time," entrepreneur landlords have seized the opportunity to acquire up to four or five properties as a sideline to their main careers. Indeed, such is the appeal of property speculation that everyone seems to be talking of succumbing to the lure of bricks and mortar investment in place of traditional pension funds. A monthly index, showing property rental yields and produced by the nation's leading specialist buy-to-let lender, Paragon Mortgages, shows that rental yields remain high. CML figures show that arrears on buy-to-let mortgages are half those of traditional mortgages.

A very rosy picture indeed. However, acquiring a property is probably the easiest aspect of becoming a landlord with pitfalls for the novice landlord. These can include dealing with letting agents, tax and maintenance costs and unwittingly taking on the role of social housing provider.

My primary concern with this new breed of landlord is their apparent reliance on information doled out on programmes such as Channel 4's Property Ladder. Although entertaining, they hardly provide sound professional advice on the type of structural repairs needed for dilapidated and unfit properties. I have lost count of the number of rented properties that I have encountered where owners have simply painted walls magnolia, fitted laminate flooring or neutral carpet and ignored items such as defective roof coverings, missing guttering and rising damp.


Often, advice from these programmes to make improvements, such as installing new kitchens to enhance the value of a property and make a positive visual impact on prospective tenants, is followed almost too literally. I have seen many a kitchen cabinet strategically placed to hide pervasive cases of rising damp. Similarly two layers of anaglypta wallpaper and MDF shelving will never solve long-term problems of interstitial condensation.

My experience is that the new breed of landlord is often unaware that early signs of disrepair could be indicative of more serious problems and certainly lack knowledge of either the fitness or decent homes standard. With a real need for affordable homes for key workers and high numbers of households residing in emergency accommodation, the entrepreneur landlord can make a vital contribution to the housing crisis. But, not by flooding the private sector with a stream of sub-standard and unfit housing.

Clearly novice landlords are in need of professional expertise and guidance, which is where EHPs could exert their influence. If television programmes are where would be landlords get advice then why not from a well-informed EHP giving sound practical and professional advice alongside the TV presenter?