A report was released by Sheffield Hallam University on August the 1st that currently one third of private Landlords are cutting back on leasing to under 35’s due to the younger generation who are currently in unstable employment, universal credit or students. A separate piece of research by Housing Hand which shows the rising rents, household debt and poor credit is also making it harder for young people to secure accommodation. As a Property Recruiter which target market is largely focused on the younger generation with a massive proportion of roles being Graduate positions – this report did not only concern me, but the way houses are being used as assets rather than a home to people – morally worries me.
I understand to an extent the flip side, Landlords need to cover their backs and of course, they do not want a situation of rent arrears. My mother is a landlord so I can empathise with the latter – it can put the Landlord under huge financial pressure. RLA suggested instead of Landlords increasing their rents to make it unfordable, they are covering the ‘risks factors’. Which to some, may make sense.
Stating that the Property Market has been rocked in the past 18 months would be a huge understatement. Working in Property Recruitment for the past 5 years I have never seen more uncertainty– but is it this deleterious thinking that is adding to the negative effect. The Independent has recommended talks with the government to cover this decline (79%) of Landlords leasing to under 35s is needed ASAP – without action the younger generation will find it harder and harder to access any accommodation.
Alex Huntley, Head of Operations from Simple Landlords Insurance has suggested ways to overcome this with Landlords – interviewing tenants in person? Guarantors? Regular inspections of the property? Payment plans with tenants? Sheraz Dar chief exec of Credit Ladder suggests landlords should not be basing their decisions on gut feeling and pointed out that many young people can be better than the older are at organizing their finances.
So, what is the solution? I would say – is this effect on Landlords reverting back to the strict Buy to Let costs (I have discussed in previous blogs Is the Sales Market Doomed?) which are then translating to the negative impact on the Landlords thinking of who they would like to lease to? Something needs to be adjusted quickly – before Properties are not just a home or safe haven for people anymore, but just used an asset.
I would be keen to hear thoughts and opinions?