L&G says that Britain would benefit from fewer landlords who buy to let.

According to Britain’s largest investment company, the economy would benefit from fewer landlords who buy-to-let.

Legal and General Investment Management has slammed “unscrupulous landlords” for allegedly taking money from people and “giving them an unpleasant experience”.

Bill Hughes, Global Head of Real Assets at L&G is calling for to be a radical overhaul in the UK rental sector, arguing that “too many buy-to let landlords” have been suboptimal and understandard.

He spearheads L&G’s push into the industry of build-to rent, and predicts that traditional landlords are gradually replaced by rental properties built for institutions.

L&G manages assets worth nearly $1.5 trillion. (£1.2 trillion). It has built a 10,000-home portfolio in eight years or less, of which 5,000 are occupied.

The result of a £3bn investment.

Mr Hughes said that institutional investment in the rental market of Britain will transform the sector. He argued that the economy would benefit from having fewer short-term tenants.

He said: “You’ve got landlords who don’t manage their rental properties well. He said: “You have unscrupulous landowners who take people’s deposits but give them a bad service.

We’re here to reset the standards of quality renters should be expecting. This is one thing institutional capital can accomplish.

You’re in the business for a long time and your reputation is important to you, so you won’t take any risks.

According to JLL, since 2015, the number build-to-rent apartments in the UK has grown more than 12-fold. It is now more than 90,000. Another 90,000 units are on the way.

changes in stamp duty and tax relief on buy-to let mortgages have impacted landlords’ profits margins over the past few years. This has been exacerbated by recent increases in mortgage rates.

This has resulted in a rise in the price of rental properties.

Last month, it was revealed that UK rents increased at a record 9.2pc rate in March. This brought the average monthly rent to £1200 across Britain – fueling the housing crisis.

Mr Hughes stated that the UK must build between 30,000 to 50,000 homes for rent each year to meet growing demand. This will in turn boost productivity.

He said: “The UK requires flexible accommodation that allows people to come and leave freely, and which helps them act productively in their relationships with employers.”

James Stevens of Aviva Investors’ head of real estate investments said: “The UK standard of living in residential accommodation historically has been horrendously poor.”

Pension funds are shifting away from traditional investments in real estate, like shopping centres, that suffered losses during the pandemic.

Aviva Investors, according to Mr Stevens, has increased the percentage of their real estate investments in residential properties from 2pc up to 8pc over the past four years. This will probably increase to 30pc within the next decade.

He said that over the next five year, institutional investments will grow exponentially in the UK in the construction of homes for rent, especially in the case of properties for families.

The build-to rent sector saw its total investment drop from around £6bn a year ago to £5bn a year ago due to high interest rates and rising construction costs.

In the last four-year period, investment in rental properties aimed at families has increased by more than £2 billion .

Chris Norris is the Policy Director of the National Residential Landlords Association. He said that the majority private renters were satisfied with the accommodation they have and the service their landlords offer.

He said: “At this time, when the demand for housing is outstripping the supply of homes in all categories, we need to build more houses.” While some of the new rental property demand will be met by build-to rent schemes, they are not a panacea. They should coexist with buy-to let.