Rise of the tenant landlord
By Alan Bunce, News Editor
FORTY years ago residential letting was seen as old hat even by estate agents. Now, it’s so much in vogue landlords themselves are living in rented homes, while they watch their investments grow. John Grimes has been in the thick of the Thames Valley market for more than 50 years. He joined Parkers in 1964 and says conditions remain good although red tape is causing more work for agents.
He has just merged his Drummonds Property Rentals business with Romans to concentrate on his Drummond House Developments business which seeks out small plots for housing schemes in the Thames Valley. But the lettings market, he believes, remains far more appealing than when he joined the industry. He said: “Letting is becoming – quite rightly – mired in regulation. It needs to be but it was ignored for so long as a lesser part of the property market. “I think the latest figures show the numbers (of owner occupiers) are 60+ per cent , down from 70+ per cent so the lettings market is quite important. “People rent by choice. Our biggest market was the young professionals. They don’t want to be tied down and they’ve seen the troubles of boom and bust and they’ve seen the troubles of people stuck in their properties. “They don’t know if they’re going to be in a job next year or if their (employment) contract is up or if they split with their girlfriend. They want to be flexible.”
The rising age of the first time buyer he said, means increasing numbers consider renting and many still go into buy-to-let at the same time with good mortgage deals still on offer.
That can be in other European countries although he urges caution, citing Spain as one disaster to steer clear of. He said: “You don’t have to buy a house and live in it. A lot of our tenants are landlords too. They rent a nice place but they buy something which is purely a commercial decision, that produces income. “It’s huge. They might be living in a house that they can’t afford to buy so they buy to let. There are some really good deals. “If you can demonstrate a business case – it’s not based on the income you are earning – it’s a good move. There are people that say that’s wrong, that that takes houses out of the first time buyers’ market. I find that a hard argument to justify.”
But he admits to being among those who dismissed renting as an option when property prices first started to rise close to half a century ago. He added: “The stigma over people renting has gone now. When I worked at Parkers, years ago, we looked down our noses at renters but it’s seen as the thing to do now.” In the 1960s Mr Grimes was among the new breed of agent at the start of the boom. Before that agents had generally been members of RICS and the industry was seen as a somewhat old school – until Parkers arrived. He said: “We went round knocking on doors, it was great. As a young manI I just did what I did every day and while Crud & Crud were sitting on their hands not doing anything, we were working up to 8pm or 9pm flogging a house.”
Yet after all his years in agency management plus being managing director of Persimmon Homes Thames Valley before starting his own development and lettings businesses, Mr Grimes says it’s still impossible to predict the future. He said: “If you go back a year, everyone got it wrong. “My view is, this is a good time to buy up until the election. After the election, who knows? What sort of government are we going to get? We don’t know. “All the political parties have got some policy on assisting housing. I have my view about what is the best but they have all got policies of one sort or another and it’s a political hot potato. “My hope, if you like, is that planning restrictions can be eased because I think nimby-ism is outdated. It’s just a way to stop somebody spoiling a view but is that more important than finding accommodation for everybody in this country?”
And he wants a more radical approach to development from authorities to help ease the current pressure on land but admits it will take courage from those in local and national government. He added: “It’s an unpopular thing to say but I think we’ve got to look at Green Belt policy. I think it’s outdated. “I love the countryside as much as anybody else but responsible planning is the way forward. “Another thing is local authorities need to be braver. They need to be able to say ‘ we need this for this reason’, rather than be influenced by small lobby groups. “When you fly over this country, you can’t tell me we have not got enough land. “Yes we should build on brownfield sites and wasted sites – partly those wasted by local authorities themselves who let sites go to ruin. They are as guilty as anybody else. But at the same time there are issues with brownfield sites with contamination. Who wants to live there?”
Authorities, he argues, need to devote effort to solving housing and planning problems but he hesitates to suggest more quangos. He added: “I don’t know if it needs another body. God knows we’ve got enough bodies but somebody needs do something more decisive about the need for more housing.”