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Buy-to-let: the asset class that dare not speak its name


A new generation of haves and have-nots — those who own a rental property and those who live in one


If all the buy-to-let landlords were to sell up at once, in an odd outbreak of Corbynite sentiment, it would release £1.1tn of housing stock. That would probably bring prices down, while leaving people who still couldn’t afford to buy somewhat stuck. I asked one of my top-secret landlord sources (my mum) why she kept her status quiet. “I feel like such a capitalist,” she sighed.

If we, as a society, really hate landlordism, there are still some dilemmas to be dealt with. For example, should we give a pass to the “accidental landlords” who own an additional property because they bought it before they met their property-owning partners? Or inherited it from a deceased parent? Will we allow a small number of landlords to continue operating for those who want to rent because their work or study in a particular city is temporary?

In any case, I suspect there’s another reason for the excruciating awkwardness of buy-to-let as a conversation topic, and that’s less socialist fervour than the widening divides within the middle class. We bourgeois Brits still have many things in common, such as our upmarket educations and our Yotam Ottolenghi cookbooks. But as the FT reported in 2014, where once the doctors, lawyers, City workers, architects and teachers all milled around in a similar middle-class zone — a world in which private education for your children was feasible but might hurt your leftwing sensibilities if you were that way inclined — now there are stark and widening differences between us. That paid-for education is fine for some, impossible for others, even within our fairly narrow metropolitan bracket.

Where once we wouldn’t have been so different, the housing crisis exacerbates these divides. Some of my friends, in their mid-30s, are renting rooms in shared houses where the living room has been converted to a bedroom, while others have multiple tenants of their own. We range from the genuinely struggling to those thinking it might be time to hire someone to manage the property portfolio. Admittedly, none of my contemporaries, as far as I know, have reached that stage, but in this world of shy landlords, who truly knows?

Whether the Secret Society of Landlords will keep expanding seems to be an open question. The new housing minister, Gavin Barwell, has strongly indicated he will call a halt to his predecessor’s laser-like focus on people owning the homes they live in, and has declared an intention to build homes of “all tenures”; however, he also had kind words for big institutional landlords who have begun building purpose-built rented blocks in the UK. Some of these offer tempting deals with WiFi included, a special app for repairs, and a big pension fund rather than my mate Dave as a landlord.

If the institutions get a special deal from government, that could bring profound changes to the UK’s rented sector. At their best, the professional landlords could provide an efficient, friendly renting experience and a source of new home construction that is independent from traditional housebuilders. At their worst, they may create a series of overpriced, impersonal towers diverting renters’ cash to overseas billionaires.

Either way, it is conceivable that mega landlords will become the norm before some of us join the ranks of those forced to mumble awkwardly into their pear and fennel salad when the subject of scummy slumlords comes up.

Judith Evans is the FT’s property correspondent. Email: Twitter: @JudithREvans

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