‘Not enough' landlords to cater to students and immigrants, Paragon boss warns
There are 'not enough' landlords in the UK to cater to population growth, student towns, and rising immigration, the boss of buy-to-let lender Paragon Bank has warned.
High demand among tenants versus a lack of available homes is pushing up rental prices, Paragon's chief executive Nigel Terrington said.
'The broader issue is that there is probably, in reality, not enough landlords,' Mr Terrington told the PA news agency.
'Demand for rented property is very high – everywhere you go you hear there are 15, 20 people for every rented property that is available and, of course, that's pushing up rents.'
He said the issue was 'broad based' with big UK cities like London being strained as well as student towns.
'The potential is that it gets worse from here because the UK population is expected to grow by another four million people by 2032, and it is largely going to come from immigration,' Mr Terrington told PA.
'Immigrants tend to come into the UK and will rent, rather than buy.
'So it puts more pressure on the rental market and therefore we need greater levels of landlord formation, rather than keeping it stable.'
He said landlords, like other UK businesses, need 'certainty and clarity' following events such as Brexit, a new government, and interest rates being hiked.
The remarks come as Paragon revealed new mortgage lending surged by a quarter over the six months to the end of March to £810 million, compared with the same period a year ago.
Activity was buoyed by buyers taking advantage of more generous stamp duty relief before the April deadline.
Mr Terrington also pointed to a wider shift from 'amateur' landlords to professional landlords, who tend to own more than five properties, which he said was 'playing into our hands' because of the lender's customer base.
Paragon's pre-tax profit soared by nearly 27% to £140.1 million for the half-year.
Meanwhile, the bank boss called on the Government to give landlords enough time to plan for the Renters' Rights Bill, which is currently going through Parliament.
The proposed legislation seeks to introduce several measures including an end to no-fault evictions, stopping bidding wars for tenancies, helping tenants challenge unreasonable rent increases and preventing landlords from demanding more than a month's rent in advance from a new tenant.
Mr Terrington said it would be 'crucial' to have an 'appropriate implementation period' for the potential new laws and that they are communicated sufficiently to both landlords and tenants.
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