Get out while you can, private landlords told – and buy shares in build to rent instead

The chief executive of Grainger, one of Britain’s biggest rental firms, has said that amateur landlords should give up and buy shares in her company instead.

Helen Gordon, whose company includes build-to-rent operations, told The Times that the traditional rental sector’s days are numbered.

She said: “Instead of people investing in buy-to-let properties, they should invest in a Grainger share. They would get 50% of our net rental income paid out as dividends.”

She said that for private landlords, “the tax regime looks increasingly unfavourable”.

She went on: “I think there are some big changes coming, which will make many people reconsider.

“Are landlords going to be able to compete with the big build-to-rent operators for amenities or quality? It’s very unlikely.

“Individual landlords will increasingly find it hard.”

She said: “In the past, people used to have awful student accommodation and then leave university and buy their own home.

“Today people often have fantastic quality student accommodation, full of amenities, and end up living somewhere really grotty. Why should they?”

Build-to-rent schemes that Grainger has completed include Clippers Quay in Manchester, with 614 homes.

Like many other build-to-rent schemes, its facilities include hotel-type facilities including a gym and concierge services.

However, critics say that many build-to-rent schemes are too expensive for most renters, are in cities, and not family friendly.

David Smith, policy director of the Residential Landlords Association, said: “This means that there will continue to be a very high demand for buy-to-let housing. This demand will mainly be met through rented houses rather than purpose-built flats.”

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9 Comments

  1. PossessionFriendUK39

    What a load of marketing Bulls**t    !  

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  2. Robert May

    With capital appreciation probably more valuable than short term rental yields it would  a fairly naive landlord who gives up their property or portfolio  to invest in a firm they might receive a dividend from but have no control over.

     

    Buy to let has flourished because of ultra low investment yields  and disproportionality high management fees. I am not sure why any landlord would give up to pitch in with a scheme they have invested in property essentially to avoid.

    There  needs to be an opportunity for investors to get into property market indexed funds but that isn’t existing Landlords

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  3. RosBeck73

    I think she’ll find that private landlords can compete very well on price and living space actually compared to the hugely inflated rents charged for boxes in tall buildings – I refer specifically to student accommodation. I predict that many of these large BTR buildings will within the next decade turn into accommodation for the unemployed and the rents for them will plummet. Let’s also see how they cope if, perish the thought, we get an extreme left-wing Government as well. They won’t be so smug then about private landlords being hammered by unfair tax policies while the Tories have favoured their mates and donors by exempting them from the attack.

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  4. LandlordsandLetting

    This is what the so-called Tory Governments have been working towards. People like George Osborne just bashed small private landlords, proclaiming their commitment to ‘helping first-time buyers’ and generally looking virtuous and lovely. And they are able to do this because they know that small private landlords have no other party to vote for. Labour isn’t exactly a suitable alternative, is it!

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    1. Will2

      Too true. Having forced thousands of landlords to sell due to s24 Conservative James Brokenshire and his merry members now claim an increase in S21 use; without asking WHY?  It is likely his announcement will now force even more S21’s while you can as landlords look to leave the market in fear of tenants obatining unlimited security of tenure (thus wrecking capital values).  However, the so called housing charities and Government are not really the tenant’s friends but only history will eventually show this to be the case. Basically if you continue to offer a posionous cocktail to landlords it will cause them to run away (or die). Either way tenant’s will loose out in the long term.

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      1. PossessionFriendUK39

        Sec 21 use has been DECREASING  for last two years ! The only people abolishing Sec 21 will help are the Criminal tenants whom its used against….   and of course, Local GOVERNMENT, who won’t have so much emergency accommodation costs. What the govt’s plan hasn’t factored in, is the swathes of PRS that won’t be open to DSS tenants who are considered too much of a risk w/o sec 21 to evict. Talk about MHCLG trying to prevent no DSS policies,  what their doing with one hand is chopping off they’re other hand ( but are too blind too see it. And all for the sake of votes, which they won’t be around long enough to see.

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  5. Woodentop

    Or put another way, a fund raising exercise for money she hasn’t got. Build-to-rent schemes are too expensive for most renters, are in cities, and not family friendly.

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  6. Hillofwad71

    Maybe straddle  both worlds and buy  shares  in Telford Homes who have partnered with the deep pocketed M&G and Invesco to deliver in London

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  7. Northampton Landlord

    Grainger PLC is the largest quoted private landlord on The London Stock Exchange.  Founded in 1912, it should be enormous by now, why not?

    Governments of differing political stripes have interfered with this market over the last 105 years.  First intervention was during World War I.

    This is just the latest administration, trying the same old trick.  Bash landlords, get lots of tenants to vote for your party, “The tenant’s friend”.

    This is a very long term business.  The political cycle is 5 years, maximum.

    If you think I am wrong, look at how many Housing Ministers we have had in the last 25 years –  average life expectancy 8 months, nearly 40 different MPs have been The Housing Minister.

    Grainger PLC has had to dodge various restrictions over the the last 107 years of its existence, and this explains its meager size, with 4,548 properties (claimed in their 2018 accounts), compared to its German equivalents, 110,000 properties each.

    It will have to deal with the same “Crackpot Political Vote Winners”, just like the rest of us.

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