On Wednesday the Chancellor Alistair Darling will deliver his Budget. We predict he will have a lot to say about how the Government pledges to help businesses large and small, of how much help has already been given and how business is the very life blood of the UK.
However, we predict that there is one group of businesses that will not even get a mention in the Budget - Private Landlords.
Before the Credit Crises there were already over 800,000 private residential Landlords in the UK. This figure has been considerably swelled by the huge increase in 'accidental Landlords'. These are people who would like to sell their home but are unwilling or unable to sell and are therefore now renting out their property.
The sudden increase in the number of available properties to rent created by these 'accidental Landlords' is beginning to seriously depress rents in many areas of the country. But what choice do these accidental Landlords have? They cannot sell their property at a fair market value and even if they could most potential buyers cannot persuade the Banks to lend to them. But their effect on existing Landlords is profound. In addition to this influx of new Landlords the Government and the Banks have seemingly abandoned private Landlords.
All Landlords, accidental or not, are running a business. Some run huge businesses with hundreds of properties, many have just one property, but they all are running businesses according to the Taxman. So why is it that Landlords are the forgotten businesses of the Credit Crises?
The Government has pumped £billions into the lenders that just 18 months ago offered Landlords a range of over 3,000 Buy-to-Let mortgages. The £billions that have rescued the banks from their greed are our £billions. But those same lenders who lent their money to hair-brained schemes all over the world are now offering less than 175 mortgages to UK Landlords. Last week the Cheltenham & Gloucester (part of the hugely expanded Lloyds/HBOS group) announced radical changes to their Buy-to-Let mortgages.
In an already devastated Buy-to-Let market the move by Cheltenham & Gloucester is shocking. What they and the other Buy-to-Let lenders are saying is that they don't care what happens to the residential lettings market. The Government, who actually own or control the Banks that provide the bulk of Buy-to-Let lending in the UK, are standing by whilst the businesses of nearly 1 million landlords and the homes of over 3.5 million privately renting tenants are threatened.
The Government have reacted to media pressure and have promised to help tenants who face eviction when their Landlord defaults on loans. But the silence about what help they will offer Landlords is deafening.
According to some research there are now over 70 pieces of legislation affecting Landlords. From this month HMRC (the Taxman) has extra powers that it intends to use against Landlords. Landlords are reporting that more and more tenants are defaulting on their rent. And on top of this the Banks are simply walking away from the lettings industry.
Private Landlords are businesses like any other, so Mr Darling we have a simple question for you - where is the help for Landlords?
We will find out his answer on Wednesday.