THE PRESS FRIDAY, DECEMBER 19, 1986. The disappearing landlord

Press, 19 December 1986, Page 20

THE PRESS FRIDAY, DECEMBER 19, 1986. The disappearing landlord

Landlords offering private rental housing are a vanishing species; it would seem from a survey done for the National Housing Commission. The survey, made in Christchurch, shows that the number of private properties available for rent is declining steadily and that landlords are pessimistic about the future of the business; though, for most of them, renting a house or flat is a sideline and not their primary source of income. Indeed, most landlords who were surveyed said they were not prepared to expand their activities. Many would prefer to withdraw from the rental housing market, if only they could do so without too great a financial penalty.

This has important implications for the Government’s housing policies. The Government’s own commitment to rental housing, through the Housing Corporation, caters for a rather different market than that which is met by the private sector; but the complementarity easily could be disturbed. Preference in the Housing Corporation rental system is given to low-income families; private landlords tend to have two main groups of tenants — the very young groups of flatmates, and the young marrieds who are

saving for a home of their own. Renting for most tenants in the private sector is a step towards the goal of homeownership, and is a short-term, economic expedient The conflict is that, when the costs of home-ownership are high, when money is tight and interest rates up, the benefits to landlords of property investment are correspondingly low. The supply of rental housing may actually decrease during periods when demand rises.

The higher that rents go, to meet interest charges and higher costs as well as in response to the shortage of rental accommodation, the harder it becomes for people to shift out of rental accommodation and into their own homes. This, in turn, tends to flatten the demand in the building industry, and so on. A principal revelation of the survey is that so little is known, rather than surmised or assumed, about rental housing and the factors that bear on it This is why the commission sought the survey as the first of a series of studies. Further work needs to be done if this or any Government is to formulate housing policies with any confidence in what will result from them.