Think tank demands that landlords should be banned from buying new-build properties.

A leading Government think tank says that the Government plans to try and help new homebuyers will fail if private landlords are allowed to buy new-build properties.

 

By stopping the sector buying new properties it claims it will help decrease the widening wealth gap between landlords and tenants and give new homebuyers a chance to own their own properties. Another key point in their report is that landlords should have less access to buy-to-let lending.

Based on official figures, the think tanks’ analysis of the sector showed that private sector landlords were generally wealthier than the general population, with an average of £75,103 held in savings, bonds and other investments. Meanwhile tenants had an average wealth of £9,506. Up to 50% of landlords had accumulated wealth of up to £20,500 and the same proportion of tenants had just £398.

Other figures showed that on average landlords were older than tenants, with an average age of 48, whereas those who rented were 32. 75% of landlords were employed and enjoyed a salary along with their rental income.

72% of landlords owned just one rental property besides their main home and half of  these made about £500 or less a month from their rented property.

However some landlords clearly received substantially more though, as the average rent across the board was £1,493 a month.

In one of the “Whose Home?” reports released by the think tank , a spokesperson  said that although they only represented 2% of the population, private landlords were in "a privileged position compared to other social groups (including tenants) whether in relation to earnings, wealth or the size of their homes".

He wrote that, "Most private landlords are not "getting rich off  the taxpayer", but instead are receiving transfers of income and wealth from tenants, who are significantly poorer than they are. In this way, it would appear that the PRS [private rental sector] increases wealth inequality in society ".

He also that recommended the introduction of restrictions on new-build properties, so that they could not be bought with a buy-to-let mortgage and that  short-term tenancy agreements could not be granted on homes that were less than three years old.

Within the report it was also suggested that  the buy-to-let lending banks could for example, reduce up  to 5% of their book, to restrict the availability of credit to private landlords, and that the taxes levied on second properties should be reviewed.

Recent years have seen a surge in the number of people renting as a result of high prices and mortgage lenders' reluctance to offer loans to people with small deposits. In 2000, around  2 million households were in private rented accommodation, but that had risen to 3.6million  in 2010/11.
Shelter has recently stated that in some areas people wishing to buy their own properties had to save up a deposit that could take them at least ten years.