RLA: Culture of home ownership pushes millions into debt

“In continental Europe many countries have a higher proportion of privately-rented accommodation and these countries are not facing a similar meltdown in their housing markets,” said RLA lawyer, Richard Jones.

“Although it is an aspiration for many, the culture of home ownership has to change.

“Britain needs about three million new homes – but nobody benefits if they’re all built for sale. Types need to be balanced to include a proportionately larger number of houses for private renting.

“And the interests of the national economy – to help revive the housing market and the construction industry – would be better served by the Government encouraging private sector landlords instead of making life so difficult for them.

“Millions of young people are made to feel that getting onto the owner-occupation ladder is the be-all and end-all – but pushing people in that direction, when they really can’t afford it, is simply condemning them to a life of debt from which many never recover.

“Many investors even maintain that domestic home ownership simply ties up money that could be more profitably invested elsewhere.”

The Residential Landlords Association argues for the growth of the private rented sector in its just-published “manifesto” in response to the Government’s recent “Rugg Review” by the Centre for Housing Policy at York University.

The independent review, says the RLA, launched “a fresh debate on the way forward” which “lays to rest many of the myths about a sector that, for too long, has been the victim of too many misconceptions.

“National and local government decisions are often based on a negative perception of the private rented sector where a relatively small number of problems have tended to inform policy,” said Richard Jones. “This perception is unjustified and needs to change.

“There also needs to be a sea change in how the sector is ‘policed’. The existing system, with its limited resources, does not root out the small minority of bad landlords. It’s a self-serving bureaucratic nightmare that is no longer fit for purpose.

“The RLA supports many of the ‘Rugg Report’ proposals – including the recommendation that the Government needs to treat property letting as a proper business activity and tenants as consumers.”

The Residential Landlords Association – a leading national organisation representing members who own more than 100,000 private rented properties throughout the UK – also calls for:

* New act of parliament for the private rented sector that consolidates more than 80 pieces of existing legislation, dating back to 1891, in clearer, simplified language;

* System of self regulation – where accredited landlords would be subject to the same rules and local authorities would be freed-up to deal with the small number of poor quality landlords;

* End to licensing for houses in multiple occupation and especially ‘selective licensing’. “These are over bureaucratic,” said Richard Jones. “We need to concentrate on overall standards of management and not just the condition of individual properties which is very time consuming to enforce”;

* Reforms of capital gains tax relief to allow landlords selling properties, and re-investing, to rollover their tax liability. “This would assist the renovation of poorer quality housing stock,” said Jones;

* Reduced VAT rates for repairs, improvements and conversions that improve the condition of privately rented houses;

* Better standards of education and training of landlords, to create higher levels of professionalism, as well as compulsory training for those who manage properties;

* Properly financed accreditation schemes;

* Tighter controls on the way tenants involved in anti-social behaviour can get legal aid to fight eviction;

* Simplification of the complex legislation that governs fire safety in residential accommodation.

Is home ownership pushing millions into debt or is it still a solid long-term investment? Tell us what you think using the comment section below