Landlords Corner – Landlords Worry Over Rental Reform Bill
It seems we can hardly go a week without a new survey bleeding into a new story which suggests hundreds or thousands of landlords are intent on selling up and exiting the industry. October was no different with a study by the Leaders Romans Group (LRG) indicating 26% of landlords expressed an intention to sell up.
Okay, the poll was taken with close to 400 landlords, so this percentage is just short of 100 people, but it is still a talking point in the sector. Three key factors were cited by the landlords looking to leave, and they were:
● A quarter saying economic factors
● A quarter citing personal circumstances not linked to income
● Half of respondents citing policy-related matters
With a similar overall outcome (25% of landlords believing they’ll quit the industry in the next year) in the Simply Business Landlord Report, this is clearly an issue many landlords are worried about.
The consistency of the responses from landlords, and both surveys showing regulatory issues to be a factor is a concern. This is because by the time you read this, the second reading of the Renters Reform Bill will likely have taken place in the House of Commons.
Landlords have major concerns over Renters Reform Bill
The LRG study emphasises these concerns with 60% of landlords believing the Bill will negatively impact them, and only 6% believe it will positively impact their business. Half of the landlords who answered believe the Bill is set to positively impact tenants.
A major concern for landlords is the Bill is set to remove the Section 21 capabilities to evict tenants. Without this legislation in place, it is only natural landlords fear being unable to deal with unruly or unhelpful tenants, causing them significant problems and a loss of money.
However, it appears to be a factor that is only used by a select number of landlords. The LRG study indicates 79% of landlords haven’t used a Section 21 to evict a tenant, and 13% of landlords had used it, but not in the previous 12 months.
It is good to know there is supporting legislation available if needs be
Then again, it is not as if a landlord has to use certain powers to know they are of benefit. For many, knowing that this legislation exists and is available if required is a great comfort. There is also a school of thought that Section 21 powers are a great deterrent, minimising the sort of behaviour that leads to tenant evictions.
This is why landlords across the country, and right here in Leytonstone, need to stay up to date with the progression of the Renters Reform Bill. We appreciate this is a dry topic for many people, and it might not feature prominently in the news, given the other topics that deserve coverage right now. However, it is vital landlords are aware of how the Bill progresses, and that you know what it means for you and your business.
A change of direction perhaps?
Hot off the press. MPs have just given the Renters Reform Bill its Second Reading - a procedure which means it now continues into the Committee Stage; however, the government now appears to be delaying the Bill, some say the result of pressure from their backbenchers, many of whom we understand are landlords. The role of the justice system was central to the debate and several responses reiterated the need to make the courts fit for purpose before Section 21 is abolished.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, says: "It is clear that more needs to be done to get the balance right for landlords, agents and tenants. Outstanding questions need to be answered about the role of a reformed judicial system.
"The UK Government have failed to take seriously the potential impact and the unintended consequences of the removal of Section 21 and the impact this could have on landlords exiting the market, which will do nothing to tackle the demand crisis in the private rented sector. It is important that the details are published and shared.
“The UK Government has listened to the concerns of our members with the need for special requirements for the student market, which is welcome, and many MPs outlined how the Bill can be strengthened through a review and reversal of recent tax changes, raising the Local Housing Allowance and local authority capacity to enforce legislation – issues that Propertymark has consistently raised.
“Propertymark will engage further at Committee Stage to ensure the Bill is evidence based and the role of property agents is incorporated fairly within the introduction of a new Ombudsman for landlords, and agents can play a full role in increasing property standards.”
If you are keen to be fully informed as to how the Renters Reform Bill progresses and what changes might arise in the rental sector in 2024, stay in touch with us.
We are always here to help
Many landlords struggle with paperwork, and staying on top of legislation, but we are here to assist you, ensuring your tenants receive everything they need in your rental property. if you are looking for guidance on the Leytonstone rental market, or you just want a helping hand in complying with rental market regulations, we are always here to assist you.
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