Phil Spencer Speaks Up For Landlords And Private Rental Sector

Location Location Location star Phil Spencer – a former buying agent – says he’s “particularly worried” about the private rental sector.

He says: “I’m particularly worried about the rental market at the moment because tenants are having it really hard because of a lack of choice, which produces inflated rents. It’s good for landlords and is bad for tenants, but that’s actually come about as a result of what is bad for landlords.”

In an interview with the Metro website and newspaper, the TV property guru says: “I’m trying to get people to appreciate is that what is bad for landlords – which is that the tax rules have changed and buy-to-let is not generally an attractive investment – but the changes make it hard to make money which means there are fewer landlords. Existing landlords are selling up, and new landlords aren’t coming into the market.”

Spencer says he understands why the landlord typically received little sympathy from the public, but he insists this is a wrong perception and the result of this lack of support means there are fewer places to let and inevitably higher rents.

Recently Spencer set out five reasons why he hoped current and future landlords would keep faith with buy to let, despite the challenges facing the sector through legislation and higher costs.

Firstly, he says capital returns are good albeit not guaranteed. New figures from Halifax show that on average UK house prices grew by 20.4 per cent between January 2020 and December 2022, up by £48,620 from £237,895 to £286,515. “We doubt that same level of growth will be seen in the next three years but long-term capital appreciation has been consistently good for bricks and mortar” he notes.

Secondly, rental returns have been strong, especially in high-yield areas. Lettings agency Hamptons estimates that an average property bought in 2017 would have generated £96,000 in rental income over the past six years.

Thirdly, there seems little prospect of rental demand slowing significantly, as housebuilding levels are low, especially for affordable housing. Fourthly, would-be investors still have the option of owning buy to lets through a company to minimise their tax and overheads.

And finally, landlords can genuinely feel they are contributing by providing a home “and it’s not the landlord-tenant battleground some people claim it to be.”

You can see the entirety of Spencer’s interview with the Metro here.