Landlords are once again on the wrong side of the press, with stories hitting the headlines this week on how much landlords earn, and the ‘terrible’ ways they make their fortunes. So why, once again, is the industry falling into a negative light?
The attacks on the profession have been varied, but their key focus has been the same – money. Labour’s Ed Miliband came out fighting this week claiming that if he comes into power, he will target the greedy landlords and their underhanded ways. Mr. Miliband promised to guarantee 3 year leases, and add restrictions to rent rises and additional admin fees for tenants. He claims that these actions will be part of a series of steps to protect ‘Generation rent’ from the unscrupulous behaviour of landlords and Letting Agents.
His rousing speech comes in the same week that the current Government dramatically increased the cost of filing possession claims through court. The move has been widely criticised by landlord groups, as the cost for filing to claim for unpaid rent – the Possession Claim Online (PCOL), has risen from £100 to £250. Fees have risen across the board, but those relating to landlords received among the sharpest increases.
The government defended the steep rises saying: “Fee remissions will be available for those with low capital and income and in cases such as possession claims, it is expected that the court fees would be passed on to the debtor as part of any cost award.”
Notice the spokesperson said ‘expected’, not ‘guaranteed’. It seems few are out to defend the humble landlord. The Telegraph joined the rally, leading a scathing attack on the amount of housing benefit ending up in landlords’ pockets. The paper claims that around 40% of housing benefit goes directly to landlords, while downplaying the role that buy-to-let has played in stabilising the housing market in the last two years.
It’s unsurprising that money is the focus of these various media and legislative attacks when the latest report from Paragon Mortgages shows that buy-to-let returns have out-performed all other investment opportunities since 1996.
18 years ago, the buy-to-let mortgage was born. If you had invested in a property then, you would see a return of £12,000 for every £1,000 you invested. Not only that, Paragon predicts that landlords will continue to make an average of 11% a year for the next decade. With returns like that it’s easy to see why people still choose to work hard to be good at a profession that is vilified by so many others.