Dr Julie Rugg, senior researcher at the centre for housing policy at the University of York, led an independent review into the state of the private lettings market last October. She wants landlords to pay an annual registration fee to estab-lish a regulatory framework for buy-to-let.
Speaking at the British Property Federation’s conference on the housing sector in London last week, Rugg told the audience: “I would like to see the introduction of a landlord’s licence which would be mandatory but readily available. We need to make the buy-to-let sector more businesslike.
“If we take the clueless and the criminal out of the equation, the rental sector will be better off.”
She argues that the cost of the licence could be covered by rent increases of just one pound a week.
But Michael Ball, professor of urban and property economics at the University of Reading, thinks the licencing plan amounts to a tax on the private rented sector.
Other speakers at the conference flagged up signs that the market for buy-to-let was deteriorating.
Fionnuala Earley, chief economist at Nationwide, says: “We saw a 30% fall in buy-to-let lending in 2008 and expect that trend to continue. We have also seen a significant con-traction in the number of lenders in this market and expect a higher perceived risk as buy-to-let defaults have overtaken prime levels.”
And Alastair Stewart, building and construction analyst at investment bank Dresdner Kleinwort, says: “In some regions the buy-to-let market is a truly post-apocalyptic landscape, where values have fallen by as much as 70%. Sensible lenders and investors will be avoiding the sector in the months to come.”