60 Seconds with…David Salusbury

David Salusbury, chairman, National Landlords Association

How has the lettings market fared during the credit crunch?
The credit crunch has been a double-edged sword for landlords. On one hand the reduction in available credit and uncertainty in the housing market have encouraged individuals to opt for rented accommodation more often and for longer periods. This has resulted in strong and consistent demand for rental accommodation.

But it has also been difficult for landlords to capitalise on favourable house prices because of the lack of buy-to-let finance. Many feel frustrated at not being able to expand their portfolios while property values are relatively low.

Is the culture of buying dying out?
The culture of home ownership and the aspiration to invest in property is still strong but circumstances have changed with the economic downturn. There is now more of a recognition of the benefits of renting and an increasing number of households are choosing the flexibility it can offer.

Also, finance is expensive despite the low Bank of England base rate and many households feel financially insecure. This means they value the affordability of the private rented sector.

Will the private rented sector be affected by the regulation of buy-to-let?
It is difficult to foresee all the potential consequences should buy-to-let products be regulated. But we are concerned that overly obtrusive regulation could hinder market recovery and ultimately increase the cost of obtaining finance. The government must tread carefully when assessing the risks of regulating buy-to-let and consider the effect such a move could have on the wider economy.

Is buy-to-let still a profitable market?
Letting residential property remains a viable business for landlords and can be profitable. But investors must bear in mind that it does not represent a short cut to prosperity.

Residential property is a good long-term investment vehicle from which landlords can expect to earn reasonable rental yields coupled with capital growth.

Provided investors do their research, invest wisely and are prepared to put in some hard work along the way they will make a profit.

Interview by Christine Toner