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We can support landlords to succeed in an increasingly arduous industry 

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The current, sustained demand for rented homes underlines the importance of private landlords but this isn’t a fleeting phenomenon; the number of people opting for privately rented accommodation sector has grown substantially since the early 2000s to now account for just under one in five homes.

This is driven by a number of factors, such as the growth of both single person households and the wider population, limited supply of social housing and an increase in the gap between average house prices and salaries.

Although various schemes have existed to increase homeownership, the first rung of the property ladder remains a step too far for some - purchase prices have swelled at the sharpest rate in over a decade to reach record levels.

Large-scale build-to-rent (BTR) developments have been touted as a threat to private landlords’ livelihoods, but up to this point have targeted a relatively small section of the rental market through largely upscale city centre offerings.

Recent analysis by Knight Frank highlights how this is set to change with billions of pounds worth of funding earmarked to see BTR move into suburban areas to target families.

It is estimated that the UK will need 1.8 million new houses over the next decade however, so I feel the important place of private landlords will remain.

Not everyone agrees it seems and instead of viewing landlords as part of the solution to the UK’s housing shortage, they are often seen as greedy property barons who profit from letting low quality homes to those who have no choice but to endure the conditions.

In our new Landlord Report 2022 we combined our understanding of Paragon landlord customers with third party insight to come to a contrary conclusion.

Countering the negative perceptions of landlords that are often perpetuated in the media, we see that the majority of landlords enjoy harmonious relationships with their tenants who tell us they are content with their privately rented home. Of course, issues do arise but are often resolved through a pragmatic approach to problem solving.

Unfortunately, accommodating tenant requests to keep a cat or make up a missed rent payment does little to overcome what landlords have long seen as their main challenge – Government policy that makes letting property more work for less reward.

Analysis of data has suggested that a shift away from tenure neural housing policy has ultimately caused some landlords to exit the sector. For example, Zoopla figures for the proportion of properties listed for sale that were previously rented have quadrupled since Q1 2018, highlighting an upward trajectory that is getting steeper.

While we don’t know if these properties remain in the PRS – are amateur landlords capitalising on the current high house prices by selling to professionals? - or if homes move into other tenures, there is lots of anecdotal evidence of landlords calling time on their lettings businesses.  

One of the most pressing regulatory changes set to impact landlords is the proposed amendment to EPC requirements, something I see as an example of how the sector can take a proactive part in supporting landlords.

In addition to working with the Government, making them aware of the scale of the issue and the implications of the policy, lenders can provide products that make it possible for landlords to make the necessary adjustments to their portfolios.

This is something we’re currently working on, and with a new problem requiring innovative solutions, brokers can play an important part in helping their landlord customers stay up to date on any changes and find the finance needed to ensure they comply.

Richard Rowntree

Richard Rowntree
Managing Director for Mortgages


This article was first published in Mortgage Solutions

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551