I READ with great interest that Legal & General, the big insurer, is teaming up with a Dutch pension fund to spend £600million building homes in the UK because it sees the falling private rented sector as an opportunity to make money on a corporate level.
Invesco Real Estate has already launched a £250m fund for new housing, LaSalle Investment Management is planning on investing £500m and Gatehouse is touting £100m. LaSalle is a US fund and Gatehouse is a Kuwait investment bank.
So now we have Dutch, Kuwait and American bankers planning to buy up and run the UK’s private rented sector because George Osborne has made it nearly impossible for home grown landlords to survive thanks to laser precision tax hikes that are designed to remove the entrepreneur and encourage the wealthy and institutions to get involved.
The sector clearly isn’t going to go away and the lack of supply for rented properties will simply be filled by these big corporations taking part. That moves control of the rented sector – and ownership – largely abroad. I get the Government reasoning, let’s get others to invest in the UK and that means George doesn’t have to find the money himself to sort out the problem. But it also gives away control and ownership. A bit like selling the power industry to the Chinese…another genius decision, not.
These aren’t new homes for people wanting to buy, quite the opposite, the corporations will want people to stay in rented to increase prices and demand on rental. And they will have scale and scope to do so influentially.
This is the wealthy benefiting from a change in taxation that is hitting the private rented landlords, who in the most, I can assure you, are not wealthy. They are people like me trying to provide a pension for my own future rather than rely on the failed banks that simply pay themselves what they like oblivious to performance and have the market sewn up with little alternative and a safety net in Government backing if they ever need it.
And does that track record in banking and investing really build faith that they will do good at the rental sector as landlords? They are terrible at banking and abysmal failures that do their best to screw the system by any means, including illegal (PPI, Libor fixing). We (The Conservatives in particular) are trusting our rental sector to these clowns.
Expect soaring rental costs, less housing for sale and more homeless on the streets. And if you are on DSS and looking to rent, the very best of luck, you’ll need a small landlord with a conscience to have any hope. You ever tried getting a loan from a bank without security? The faceless machine says no. It’ll be the same when you are trying to rent a home.