Leading landlord figure Marcus Selmon is to launch a group for larger operators in two weeks, LandlordZONE can reveal.
Marcus, who is part of a consortium of companies operating a sizeable portfolio in the North West of England, says the new organisation is to be called the Portfolio Landlords Action Network (PLAN).
The launch is to take place on 10th November and is open to all to attend – although space limitations mean places will be allocated on a first-come, first-serve basis.
But there will be an option to sign up and watch the launch online (sign up here) which means as many people who want can see what all the excitement is about.
Ahead of this launch, LandlordZONE editor Nigel Lewis interviews Marcus to find out why he believes the sector needs a dedicated organisation representing the interests of larger, portfolio landlords.
NL: Why PLAN?
MS: Last year I was watching TV and saw an ad by Shelter asking for donations to help fund their campaign against private landlords, playing on the belief among many viewers that private landlords are the root of all evil and a group who nobody in either government or opposition circles is keen to support – which in the Tories’ case it odd given most landlords probably vote for them.
I did some research into the background and history of the private rental market to try and understand why and in doing so had a moment of revelation where I understood what the problem was.
The problem the Government has is not really with good or bad Landlords but with the whole structure of the current market where 98% of the five million properties are owned by two million Landlords who have three properties or less. They will not say that directly but that is their issue…because millions of landlords with a handful of properties are impossible to regulate.
One of our aims is to engage with Government and get them to come up with what they think the right structure is for the PRS. We believe they want more private landlords with larger portfolios. But for that to happen the Government needs to encourage the market to develop in this way.
NL: Why are big portfolio landlords different?
MS: They have a different outlook. If you own a large portfolio that you intend to hold for the long term and self -manage then your priorities are completely different from a smaller landlord or a letting agent.
Your focus is your tenants because happy tenants mean a successful business as they are your main source of income rather than any capital gain you may be making on a property (which is irrelevant if you are not selling) or the need to find new clients for your business.
You also have the incentive to get things right because of the economies of scale operating a larger portfolio. If you are doing a thousand Right to Rent checks each year then you have to have systems for doing them properly and will invest in those systems. If you do one check a year you do not and may lose track of what’s needed and what’s not.
But I must stress that this is a generalisation, and I am sure there are many smaller Landlords who are the exception to these points.
The problem is when you have two million landlords it only needs a small percentage to do things wrong to in order to cause trouble. If you assume that two per cent of that market was made up of bad landlords that would still be 40,000 bad landlords. That is a lot of landlords and Tenants with problems.
If those tenants complain to Shelter and similar organisations then obviously there will be an impression things are really bad. If as Shelter say the figure is 40% (i.e. 800,000 landlords) then it’s no wonder people believe the current system does not work
NL: What will PLAN offer?
MS: It will bring together other landlords like us to try and create a group with a distinct voice. In addition, we will offer a forum for Landlords to network with each other, share experiences and knowledge, and benefit from the information we will be providing on the latest tech and systems available for such Landlords
We are also looking at plans to offer a much wider membership for smaller Landlords who aspire to be portfolio landlords
NL: Why does the government need to get involved?
MS: Any market relies on the rules and regulations that govern how it operates. Currently, the focus is on creating ‘negative’ rules to restrict how current landlords operate. The problem is that while these might seem reasonable for individual landlords with a few properties, they are not relevant or helpful to larger portfolio landlords.
The solution is to use a carrot and not the stick and provide incentives to landlords who are prepared to operate in a way the Government supports and encourages much larger landlords to emerge. Exactly how that would work is the detail that needs to be worked out.
One starting point is to have a model that the Government supports and is their vision of the ideal market.
That such a vision is not there now because no one is addressing the issue of what a good market should look like.
That is why PLAN has been formed. That is our objective going forward and we hope others will join us to make this a reality.
Visit the PLAN website.