Brokers can support all types of buyers with a clear conscience

One of the minor stories in the press this month was about a brokerage that had decided that it would no longer market BTL products to customers. The company felt that its primary mission to help people onto or up the housing ladder was incompatible with also helping landlords to get finance which, in their view, took property out of reach of those whose goal is homeownership.

In certain quarters that might be seen to be a principled stand but what we need to remind ourselves is the important role played by the private rental sector (PRS) in the provision of good quality rented accommodation. It is estimated there are 5.5m privately rented homes across the UK, accounting for 19% of the entire property market, with England by far the largest private rental market with 4.8m homes within the sector.

According to Propertymark, August saw a record number of requests for rented accommodation. The number of new prospective tenants was the highest figure on record, at 107 per letting branch while the number of properties managed per branch fell in August to 196.

Given the buying frenzy during the summer and the increase in house prices, it is interesting to note that in England, private rental prices grew by just 1.2% in the 12 months to July 2021, up from an increase of 1.1% in June 2021.

It plays well in certain quarters to see private landlords as the enemy of affordable homeownership. In reality, the PRS accounts for less than a quarter of the rental market. The real issue has been and still is, the inability to build homes to keep up with demand and of course, the consequence has been housing stock increasing exponentially in value. Successive governments have also failed to get to grips with tackling the building issue and providing the funding for any meaningful increase in new build social housing by councils.

Lastly, there is an assumption that everyone wants to be a homeowner. Yet for many, rental is seen as a lifestyle choice, rather than a last resort. This is especially true with the growing popularity of HMOs for people who are switching their goals from homeownership to saving for other priorities such as holiday experiences and funding for other needs.

More renters are also staying single for longer so renting fulfils the desire to be mobile, social and have more disposable income. HMOs also offer rental flexibility for those workers who want a place to stay nearer work and therefore assist in keeping a workforce mobile.

Helping fund landlords to provide rental accommodation is a service just as important as providing mortgage facilities for homemakers.  The majority of mortgage brokers do not see homebuyer and landlord requirements as incompatible with each other.

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