In a report,‘The Growth of Buy-to-Let’, the CML stated the main reason behind the rapid expansion of the sector, since its inception 10 years ago, was the government’s liberalising stance towards the housing market.
However, it warned attempts to improve the market, through houses in multiple occupancy (HMO) legislation and the compulsory tenancy deposit scheme (TDS) could undermine its development.
The report said: “There is a general feeling that the outlook for the sector is strongly positive, as it is capable of catering to Britain’s changing housing needs. But it is important that the government recognises the need for it to play a supportive role. This means understanding the nature of the sector, which comprises mainly of small landlords with limited resources, and ensuring the level of regulation is appropriate to this structure.”
HMOs and the TDS have been introduced as a way of improving the private rental sector.
Andrew Moss, BTL product development manager at Mortgage Express, said:
“The general thrust of this regulation is about improving the quality of rental accommodation available in the UK. Although such measures may deter some prospective landlords, we don’t expect regulation to have a marked impact on BTL activity.”
However, Simon Gordon, head of public affairs at the National Landlords Association (NLA), said:
“We’ve just had the 2004 Housing Act and the regulation flowing from that. It is important that it is implemented with a light touch. Otherwise, it could discourage landlords, discourage current landlords from expanding their portfolios or see some leave the market.”
