As the new Labour Government settles into power, rental reform will be one of the items at the top of the to-do list.
Labour’s shadow housing team was vocal in its opposition to certain aspects of the Tory’s version of the Renters Reform Bill whilst on the opposite side of the House, but it must not rush out a butchered version of this legislation without fully considering the consequences.
Centrally, Labour objected to the inclusion in the Bill of a clause to only scrap Section 21 once court capacity had been increased. Many in the industry would urge the Party to review this stance because doing so could be detrimental to the very people it is designed to help – tenants.
The majority of landlords have accepted that Section 21 will be going.
However, if it is removed, the Bill needs to ensure that there are robust grounds introduced for landlords to gain possession of their property if they so require. They should also expect a functioning and resourced justice system to cope with the increased number of cases that will be heard by a court.
The previous version of the Bill that failed to make it through wash-up in the final days of the last Government largely achieved that.
If Labour gets the Renters Reform Bill right, balancing the needs of both landlords and tenants, it could provide the clarity and certainty that landlords require to give them the confidence to continue to invest in the sector.
As the tenure of the working population, a flourishing private rented sector will help support Labour’s economic growth plans, facilitating workforce fluidity and flexibility. As new jobs are created, a transient housing option is required to provide homes for those who move for employment opportunities.
If Labour gets the Bill wrong, then we could be faced with a clogged-up court system and landlords out of pocket if they need to evict a tenant. That damages confidence and could also damage PRS stock levels.
Let’s consider some of the facts. Zoopla’s influential rental market report recently showed that tenant demand is double that of before the pandemic, yet rental stock availability is down by a third.
The result? Rental inflation, as simple supply-demand economics dictates. As the report states, ‘Only by boosting supply can we improve choice for renters and increase the chances that consumer demand will start to exert more influence over landlord decisions and the quality of rented homes’.
Rushing out legislation could fundamentally undermine confidence in private rental sector investment and contribute to declining stock levels at a time when demand for rented homes is only going to grow.
As well as retaining existing landlords in the sector, it’s also important that a new generation of landlords is nurtured to ensure good quality homes are available for those who want or need to rent.
We recently analysed industry data, which showed that the average age of buy-to-let landlords purchasing with a mortgage is falling, down to 42.9 last year from 46.4 a decade ago. Purchases by landlords in their 30s increased from 21% of properties in 2014 to 31% last year. Overall, three quarters of mortgaged buy-to-let purchases last year were made by somebody under the age of 50.
That is positive as it shows that property is still seen as an attractive investment proposition. However, these investors like certainty and a stable regulatory and fiscal environment.
This is why it is so important that the new version of the Renters Reform Bill is carefully considered and reflects the needs of all participants in the PRS.
* Richard Rowntree is Managing Director of Mortgages at Paragon Bank *
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Well I am sure we are all hoping they will do something sensible that works for landlords as well as tenants. However with Angela Rayner in charge, that seems somewhat unlikely.
Absolutely! Vindictiveness and politics of envy will supercede "common sense ". I read this morning that one of the new Labour MPs was born in 2022.. Barely out of nappies. I doubt he has ever heard of "supply- demand economics ".
Much as I disliked the Tory bill, I am so annoyed and worried that they've left it for Labour to screw us all up even more by not pushing it through. Nothing good can come from Labour on this topic.....or any other for that matter.
Agree, even the Tory bill will be better than what is to come. Rayner ( two houses) hates landlords…… although she was allegedly one herself for a while 🤔🤔
The phrase, “The majority of landlords have accepted that Section 21 is going” is not entirely accurate and Richard Rowntree should know this. Landlords have not been asked their opinion and, despite their name, the NRLA do not speak for us either.
Understanding that both old and new governments want Section 21 to go is NOT the same as accepting it.😡
For me accepting that sec 21 is going just means that I have to be very careful selecting new tenants, I cannot risk a tenant from hell or a non payer
A L., 100% correct before Section 21 there was no private Lettings or buy 2 let for very obvious reasons Sitting Tenants no one was fool enough to buy a property for someone else.
So now they are going back there again sleep walking because they don’t know the difference if they were even born but now they all have keyboards that’s their limit start to finish.
Annoyed - Good point. We do not accept the loss of Section 21. However we now have to live with it. Let’s hope pragmatism prevails but somehow I doubt it. There is a baying mob (Generation Rent et al) who will want Labour to finish us off. Coupled with that we have the NRLA who do not our interests at heart. For a healthy rental market to exist and for future investment (I have held off) a landlord must be able to obtain vacant possession in order to sell a property. With the spectre of lifelong sitting tenants no-one is going to invest other than the Corporates who generally charge a higher rent. That doesn’t help tenants. There needs to be healthy competition with a good supply of properties as it was during the Blair years. It must also be recognised that we have had rapid population growth which again makes it doubly important that there is a thriving PRS.
Absolutely right.
I'm sure the new government, totally inexperienced remember, their only contribution in the last years has been to oppose everything, will come up with something that finally finishes off the PRS. Then they'll lie about it and blame somebody else. Landlords or the Tories, no doubt.
Looking at the Ministers of State that have been appointed, we should all be very afraid. David Lammy, who was considered an electoral liability and kept out of the media, is now the UK's Foreign Secretary. All rats should leave the sinking ship asap.
It could have been worse. He could have made Diane Abbott Chancellor of the Exchequer. 🤣🤣🤣🤣🤣
Ange said she’d cannot on day 1 not realising there is no mandate to do so. Hopefully another year to pass it and by then, 3 more of mine will be gone
Personally I don’t think getting rid of section 21 is a good idea , in the mid to short term this will eventually hurt the very people they are trying to protect. I don’t understand why the notice period isn’t just extended, after all 2 months ( ignoring court delays) isn’t much time and 4 or 6 months makes more sense in 2024. However it does seem to me the problem tenants tend to be some sort of benefit tenants so I guess any time frame would never work whilst there is a shortage of social housing. Am I correct in my assumption or have I missed something?
I think you are spot on there, in the main over the years it has been the benefit tenants that have been the problem, which is why I have a blanket ban on them NO DSS.
Andrew - I don’t think Landlords are allowed to have a blanket ban on benefit tenants. However when a landlord is presented with half a dozen prospective tenants he/she will choose the tenant who is in the best financial position and unlikely to run into arrears.
Nope, you’re bang on the money. Right or wrong my tenant selection has been Gold standard for a long time ( zero arrears/zero problems), I suspect other landlords will do what I have been doing, and this will inevitably mean no one on benefits need apply, and only those with documented proof of a good salary will stand a chance.
Margaret I really don't care if it's allowed or not, I do
Just because you are not allowed a blanket ban, you just refuse them individually.
MJ Amzac Estates - I agree a longer notice period is perfectly reasonable. The problem with benefit tenants is that they have nowhere to go and the Council advise them not to leave or they are deemed to have made themselves intentionally homeless. The Government would like us all to become social housing landlords but they are better served by Housing Associations who sadly do not have enough properties available. Paying benefit tenants universal credit doesn’t work. In the past when a tenant lost his/her job the Council would pay Housing Benefit directly to the landlord so arrears didn’t arise.
That did used to work until the council just stopped paying with no warning
Not heard of clawback? If the tenant is overpaid or they make a false claim, they go after the landlord first.
AL - No I hadn’t heard of clawback. That is a bit alarming.
HB overpayments
4.00 A recoverable HB overpayment can be recovered from:
the claimant
a person acting on the claimant’s behalf and/or
the person to whom it was paid
I just hope someone in the Labour party works out the Golden Age of BTL was in the early 2000s. If they returned us to the regulations and taxation that existed then they would begin to solve the housing crisis in a very short time.
But that would take an understanding of the problem 🤔🤷♂️ They have none 🫣
I agree with Jo
But the problem cannot be solved in a short time. There are tens of thousands of people waiting for some where to live and the Population is rising at probably the fastest rate in History . There simply is not enough Properties. And will not be for years .
Landlords could help but will need incentives and encouragement.
With our new government the refugees in France are jumping with joy and are going to get on the next dingy.
@Stephen Arnold - coupled with the open border's policy from 1997 onwards, such significant influx from "97 most countries cannot handle and we still haven't caught up, then, add in all you mentioned and even more.
Happily we're out, yippee, 6 good families having to barter for a dwindling rental housing stock, thanks to a now wrecked PRS created by an incompetent government & a g0rmless Mr. Gov.
Astonished to be told by our tenants with our last rental: as they went to council hoping for help and be added to the housing list, 1st thing council advised them was to stay put!! STAY PUT, FFS!! Then quickly mentioned witholding rent, and they don't see this, theft, as a problem!!
So happy we are now out, 35 years a (good) Landlord, sigh.
This country is in such a dire mess and will only get worse.
I'm surprised we're not bankrupt, yet, give it a few years!
Any landlord who had to go to Court for repossession because of non payment of rents and/or antisocial behaviour will no doubt ruthlessly select their tenants like I do :
- Must have a very good job, with proof of income
- Preferably a degree and working in a degree level job
- must have a reference from previous landlords.
Result: God help single mothers on benefits or anyone on zero hours or part-time. I won't touch them with a bargepole!
Perhaps Angie will offer them accommodation in her many council houses!!
So it’s the landlords fault they have no where to live, it’s the landlords fault they make a false claim, it’s the landlords fault they have to pay it back or even claw it back from the landlord because the Tenant used it to live in his property.
That sounds about right if the Tenant makes a complaint about the landlord give him a big fine and £30k legal expenses a couple of grand for victim support but it the landlord who is the victim seems fair enough to me 👍
Yes, tenant happily to steal benefits and landlords pays it back, tennants get away to, again, happily soon try again.
Great for the tax payers knowing this goes on, compared to say a disabled person who has been over paid, oh they make sure it's clawed back asap with book thrown at them - this, a close friends experience, simply shocking, disgraceful and utterly disgusting. Camden for yee...
Too many on benefits driving up rents they are well able to work it, if they are getting the bulk of the rent off benefits and housing support the extra persons living there makes up the difference or should they be getting anything.
Genuine working couples paying their way haven’t a hope it’s disgraceful.
Just seen a 2 bedroom on outskirts of London let for £2300.00 pm. Looks very nice but wouldn’t be compliant for regulations with there own front door but kitchen as part of entrance hall, don’t see any registered license either nothing unusual about that there are hundreds of thousands of those only us who were fool enough to get licensed years ago and tortured ever since.
Anyway I have a five double bed detached house in town with extra large living reception, separate kitchen 2 bathrooms, gardens & 2 parking spaces in central location & licensed for 3rd 5 year term for this money it a bad joke on me.
It seems we are fighting other peoples battles while they sit there making the easy money.
Benefit tenants where you'll find the tenants from hell who won't pay
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