Landlords are too wealthy and should be banned from buying new-build homes and have a buy to let mortgage lending cap to stop them growing even richer, urges a political think-tank.
The Strategic Society Centre has published two research reports – one profiling landlords and the other recommending curbs on their ability to borrow money.
The reports argue that the wealth of private landlords outstrips that of tenants, and the only way to tip the balance back in favour of first-time buyers is to restrict the financial clout of landlords.
To do this, the centre makes three key recommendations:
- A ban on private landlords borrowing money to buy new-build homes
- A cap on how much money banks and building societies can lend to private landlords
- New laws stopping property owners from letting homes that are less than three years old aimed at making sure new-builds are owner-occupied rather than let to renters.
“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 private rental sector increases wealth inequality in society,” said James Lloyd, of the centre, who wrote the report Whose Home – Understanding landlords and their effect on public policy.
Meanwhile, a second report published by the think tank, Understanding Landlords – A study of private landlords in the UK using the Wealth and Assets Survey, profiles landlords and tenants by comparing their relative wealth to other homeowners and the general population.
The research reveals:
- The average age of a private landlord is 48, while that of renters is 32
- 45% of private landlords have total financial assets worth £30,000 or more, with 26% worth £70,000 or more.
- The mean financial wealth of private landlords is £75,103, and the median is £20,500
- The mean financial wealth for private renters is £9,506 and the median £398
The Strategic Society Centre is a charity funded by organisations like Shelter, the TUC, AgeUK and the Nuffield Foundation.