Buy-to-let landlords often get a bad rap in the media, but they not only provide vital accommodation for millions of renters; they also benefit the local economy.
Around a fifth of all households in the UK currently rely on homes provided by buy-to-let landlords in the private rented sector, amounting to just over 4.4 million households, according to the latest data. Many using renting as a stepping stone to homeownership, while others remain tenants for the long-term.
In recent years, the age of the average first-time buyer has risen, as people increasingly live in rented accommodation with friends, as singles or as couples for longer. This could be down to lifestyle choices, such as wanting to live in a certain location, as well as societal changes and financial reasons.
As such, buy-to-let landlords have noticed a huge rise in demand for their properties, particularly in areas where appetite was already high from young professional tenants, such as city centres and commuter spots. A lack of rental supply has contributed to this, and rents have been rising faster than house prices as a result.
Buy-to-let landlords therefore remain a vital factor in the UK housing market, despite the government’s push to get more people onto the housing ladder. And new research shows that today’s buy-to-let landlords are also making an important contribution to local economies.
Buy-to-let landlords shop local
UK landlords are some of the biggest customers for local tradespeople, whom they rely on for their property maintenance – which can be more frequent than would be needed for owner-occupiers.
According to recent analysis by specialist lender Aldermore, almost 80% of landlords use tradespeople that are located close to their rental properties, and they spend an average of £6,003 each year on these services.
Electricians make up the biggest proportion of this, with 52% of the share of work for landlords, followed by plumbers at 50% and handymen at 34%. All of these trades are needed at some point by property owners, and particularly by landlords who often have safety standards and regulations to adhere to.
Aldermore’s research reveals that more than a third of buy-to-let landlords say they want to support their local economy, and almost a third also say they trust local services more. A similar number believe that local tradespeople have more knowledge of the area and can therefore give them better advice.
Plans for the future
Unsurprisingly, landlords have not come out unscathed from recent financial difficulties experienced by the wider economy, and added to this are issues such as potentially higher taxes creating a burden on investors. Aldermore’s findings show that almost two thirds of buy-to-let landlords are finding it harder to be a landlord now than a year ago.
It goes on to say that three in five landlords could downsize their portfolios to cope with these pressures, although a large number would also like to expand their portfolios if they were able to in the market conditions. On the positive side, almost three quarters of landlords have seen greater demand for their properties in the last year.
On the whole, private renters agree than the UK’s private rented sector is essential to meet the UK’s housing demand, and the majority of buy-to-let landlords believe that investors exiting the market will have a negative impact on the quality of homes available.
Good landlords make a difference
Jon Cooper, head of mortgages at Aldermore, comments: “Amid a backdrop of ongoing market challenges – from high interest rates through to regulation changes – some landlords are considering downsizing their portfolios.
“However, there will be plenty of larger-scale, professional landlords that will instead look to purchase more BTL properties. This should, over time, provide useful ballast to the private rental sector.
“Landlords remain absolutely vital to addressing the UK’s housing demand. Our data shows they’re generous contributors to their local economies as well. Whilst they sometimes get a bad press, there are so many good landlords out there making a really positive difference.”
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