The “institutionalisation” of the buy-to-let market and the private rented sector has “slightly Orwellian undertones”, one broker has claimed.
The comments come as institutional investors are increasingly entering the private rented sector.
Shaw Financial Services owner and mortgage expert, Lewis Shaw, explained that, while anything that seeks to improve things for tenants “can only be a positive”, this is only so long as there’s a “solid government framework” that properly regulates landlords and improves the stock of UK housing.
“My main worry is that we are hurtling headlong into neo-feudal society where big business controls how and where you live, and more importantly what you pay,” he added.
Shaw’s comments were mirrored by Self Employed Mortgage Hub founder, Graham Cox, who said: “The current administration is ideologically adverse to building social housing at any great scale.
“They think the private rented sector can take up the slack. At least that’s what their paymasters have told them.
“They absolutely envisage a future where big corporations will own most of the privately rented housing stock, house prices continue to soar, and the average Joe is priced out of owning their own home.”
Offering a different perspective PropertyLoop co-founder and CEO, Imran Khan, outlined the benefits of the institutionalisation, namely more professionalism, compliance and potentially a stable environment for tenants.
However, he went on to state “this doesn’t mean it’s an all-round win”.
“Institutional landlords are more likely to focus on affluent areas, leaving a gap in affordable housing, a sector where individual landlords have played a crucial role,” he explained.
Khan added that it's “crucial” to maintain a balanced ecosystem of both institutional and individual landlords as “each has its pros and cons”.
He added that a “symbiosis” is needed to meet the housing demands across different sectors and regions.
Maintaining the balance of the sector was also mentioned by Yellow Brick Mortgages managing director, Stephen Perkins, who said: “Landlords need some support, as they are crucial to the letting supply ecosystem.”
Moor Mortgages director and lead adviser, Peter Stamford, added: “The government is pushing homes into big corporate hands, sidelining everyday landlords.
“We need both small and large landlords for a fair housing market.”
Stamford warned that this direction risks creating 'a divide' between those who own homes and those “forever renting”.
“We need to challenge this before it’s too late,” he added.
tom.dunstan@ft.com
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