A must-read for all landlords: A frustrated landlord speaks out

A must-read for all landlords: A frustrated landlord speaks out

9:38 AM, 26th March 2024, About 3 weeks ago 43

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A landlord has told Property118 of his frustrations in dealing with the courts and rent tribunals – and warns that the abolition of Section 21 will bring in ‘tenancies for life’.

Paul has 20 rented properties around the Fylde coast and says he is an ‘accidental landlord’ after a successful career with a Fortune 100 company.

But he says the growing dysfunction of the private rented sector is making him question his future as a landlord.

He said: “As landlords, we don’t realise how things work until we use them, such as rent tribunals or courts and then only a small proportion of landlords have had the benefit of relying on these organisations.

“It is only then you realise how dysfunctional they are.

“As landlords, we accept an incredibly low level of service from Universal Credit where data protection appears to be weaponised against us.”

Six-month tenancy will become a tenancy for life

He also warns that a six-month tenancy will become a tenancy for life if Section 21 ‘no-fault’ evictions are abolished under the Renters (Reform) Bill.

Paul said: “Consider an employment contract where someone is given a job. They are on probation usually for six months.

“If the employer doesn’t get on, they can end the employment in probation.

“A six-month tenancy is the same – a probation but not now thanks to ‘no-fault’ section 21. The landlord loses control of his property, and the courts don’t work.”

He adds: “The landlord is the first to lose out financially in any problem because the landlord has allowed the tenant access to a huge asset for a relatively small monthly payment, by comparison to the home value.

“The tenant stops paying or damages the property and there is instantly detriment to the landlord.

“The best a landlord can hope for is the rent is paid.”

‘Little a landlord can do with a difficult tenant’

He adds: “There is little a landlord can do with a difficult tenant one who wants money off by alleging issues. You can’t even visit and check.

“One of my tenants put a dozen razor blades down a sink it blocked, and they complained it was making them ill, they didn’t allow access and stopped paying rent.

“What recourse does a landlord have to these stresses?

“Why on earth don’t they reform tenancies?”

He points out that effectively bringing in tenancies for life is not what landlords agreed to when they offered their current six months’ tenancies.

Paul adds: “If there are new tenancies needed then have a Tenancy Reform Bill.

“Introduce new tenancy products and allow landlords to sell them instead of introducing a morally bankrupt policy to change millions of existing contracts.

“New products could offer tenancies over a longer period for those who want them.”

Had a tenant leave without notice

Paul explains that he recently had a tenant leave without notice and he only found out when he saw on Facebook that the tenant was booking a removal van that day.

When Paul went to the furnished property, he found the tenant had not only damaged it – but had also stolen everything too.

He adds: “Universal Credit did help – just him. They are his partner in crime and immediately stopped paying me, including the arrears.

“I couldn’t talk to them as they have no phone contact for landlords, but instead their UC system allows his case manager to call you back within the next two weeks, but they don’t.

“They just stop payments and make themselves unavailable.”

To compound matters, Paul has another tenant who has stopped paying rent after it was increased by £960 a year – after Paul’s mortgage rocketed by £4,400.

He says: “The court under Section 8 was sympathetic – to the tenant.

“And they won’t give me the property back under Section 8. She claims she went to the First-tier Tribunal in November 2023, after the £80 rent rise.

“But you hear nothing from the Northern First-tier Tribunal, they just said they are running three to four months behind in assessing cases.”

‘The system doesn’t work’

He continues: “I am not blaming them; they are probably also underfunded but the system doesn’t work.

“But who can I complain to about the bank getting £4,400 from me when they had affordability rules in place and stress tests to check I could afford interest rises?

“The problem is the stress tests were set at 2% under BoE rules PRA (Prudent Regulation Authority) and then BoE raised the rates by 5.24% almost three times their own cap.

“They knew would make payments impossible for some.”

Paul also questions the 30% LHA rule since LHA rates on the Fylde coast are rising from £576 to £625 for a three-bed property in April 2024 – even though they were £520, 17 years ago.

The rates haven’t kept up with inflation and are to be capped again next year.

He adds: “Meanwhile the real problem, the true villains are the banks who can put their rates up by 100% for those who they catch, those who don’t have fixed rate products or who through bad timing fall out the end of their product.

“Whilst banks can raise costs on a whim, landlords who find themselves in an impossible financial position are criticised for raising rents.”

Provide homes to the people the banks won’t touch

Paul says: “The real problem goes unseen and that is landlords often provide homes to the people the banks won’t touch with a barge pole.

“The banks take most of the money and the landlords have been punished since we are no longer allowed to offset our full interest costs.

“Labour promise to make things worse for landlords by tightening regulation still further.”

He adds: “The Tories’ banning of ‘no-fault’ evictions is helpful – to bad tenants – who don’t want to pay their rent or are difficult.

“Letting someone live in a home you have borrowed money against is extremely stressful – there is no recognition of this.”

He warns that the biggest issue is a shortage of housing while landlords are being scapegoated because no provision has been made to house everyone.

Paul says: “The government have made it choppy waters for both tenants and landlords by allowing the BoE to break then scrap its own affordability rules.

“The system is broken, and the issues are largely avoidable and manmade.”

He adds: “The decisions being made are morally bankrupt.

“Honestly, who would be a landlord?”


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Comments

Keith Wellburn

10:10 AM, 26th March 2024, About 3 weeks ago

All very true, but all the way through I wondered how on earth you can be an ‘accidental’ landlord with 20 properties. Either he must have inherited a sizeable portfolio or not realised he kept buying more properties than he could live in.

I’m nearly out after having 14 at one time - very much a goal and the highlight of my ‘career’. It’s not just the system, my fellow landlords are beginning to mystify me after 35 years.

Carol

10:22 AM, 26th March 2024, About 3 weeks ago

Reply to the comment left by Keith Wellburn at 26/03/2024 - 10:10
After 20 years and 16 properties, I am nearly out now. Only one more to go. Any adverts to let that I now see are through agents. I think many landlords who only have one or 2 properties and let through an agent are oblivious to the changes that are going to hit them and are not being informed by the agent as this would be detrimental to their business. The worst tenants I have had was when I let through an agent.

JB

10:38 AM, 26th March 2024, About 3 weeks ago

Landlords AND good tenants are paying for losses caused by bad tenants

Michael Booth

10:54 AM, 26th March 2024, About 3 weeks ago

Welcome to the world of prs ,only going to get harder especially when liebor gain power.

TheBiggerPicture

11:22 AM, 26th March 2024, About 3 weeks ago

Thanks for taking time to write the article.

There's a definite mismatch in the supply chain of risks and costs that makes any use of leverage dysfunctional.

This is not a sustainable system, so will revert at some point.

I'm New Zealand they have just repealed their equivalent of Section 24.

Judith Wordsworth

11:35 AM, 26th March 2024, About 3 weeks ago

I'm nearly out too. It's nice to sleep at nights unworried.

Just wish that when the Renters Reform Bill raised it's head landlords had seriously considered my proposal which might have brought Government and Local Authorities to their senses to realise what an important job landlords do.

The proposal was for every PRS landlord to serve a s21 notice on the same day with the same 3 month expiry date. Why? Because it potentially could have meant 4.7 million homeless on the same day. No landlord would have had to continue the possession process. It would have been a wake-up call to Government and LAs.

But no-one is ever an "accidental" landlord. You have to make a positive decision to be one. Being a landlord is a business, a profession, NOT a game!

Golfman

11:37 AM, 26th March 2024, About 3 weeks ago

Other than not being an accidental landlord agree with everything here. I have tenants who know that I now can’t even propose fair rent increases as they simply decline them in the knowledge that even if I issue an eviction notice it’s not going anywhere.

Now I’ll confess to being a ‘nice’ landlord who only increased rents when I had to - but it’s been a bitter pill to swallow in that all those who I have helped in this way for so many years simply use the system to fight back.

It is categorically true that with s21 abolished - for anyone renting to benefit recipients- you will never manage to get sensible rent increases and honestly speaking you’re unlikely to get your property back. It’s gone- that is not a joke.

As a portfolio landlord it baffles me why anyone wants to do this anymore. I’m gagging to get out and even happy to sell out at a discount to draw the line underneath all of this.

Once upon a time I was happy I did this and now - honestly speaking have bitterness and resentment towards the government for scapegoating us.

Still nothing to do - just plan for exit. Happy to pay the exit CGT and never look back. If you’re addressing a rich seam in the market / and letting to those who have something to lose then maybe you have a sensible basis to continue. otherwise…. Life is too short for good landlords to waste time. Much easier to make better use of your funds elsewhere.

John MacAlevey

11:53 AM, 26th March 2024, About 3 weeks ago

..err, HMG is to be major shareholders in tent manufacturing companies..good forward planning, highly unusual for a plotician (yes) or civil servant.

Cider Drinker

12:06 PM, 26th March 2024, About 3 weeks ago

Ever since I bought my first property over 20 years ago, my plan was to buy four in total to support my retirement and to provide financial help for my children.

Over the past few years, my children have all said that they do not wish to inherit tenanted properties and I can’t blame them.

They are witnessing my refurbishment of one property. Rented for around £4,000 per annum, it’s costing well in excess of £20k to put right after one ‘awkward’, housing benefit tenant.

Then they see me spending on a new roof, a new boiler, new windows. The list is endless.

Maybe rents will need to rise to encourage my tenants to leave.

I’m lucky, S24 doesn’t affect me and I have more savings than (mortgage) debt. Having suffered with depression for most of my adult life, I don’t how I would cope if I had financial pressures to add to my ‘landlord’ woes.

Keith Wellburn

12:22 PM, 26th March 2024, About 3 weeks ago

Reply to the comment left by Cider Drinker at 26/03/2024 - 12:06Costs are just utterly ridiculous now. Luckily I was able to do much myself eg kitchens, bathrooms etc were just in the hundreds for me and enabled me to build a portfolio.
I can chart the ridiculous rise in one job I didn’t do my self - a full re-roof. This is a time line for typical Victorian terraced houses in the north;
1995. £1,000
2000. £1,300
2004. £2,400 (including 2x velux)
2022. £15,000
I can appreciate there are reasons why work is so expensive, but the problem is clueless politicians like Gove seem to believe landlords operate in some sort of vacuum rather than being affected by numerous cost pressures that mean, despite record rents, the reward is not sufficient for the risk and effort involved. The same applies to LAs and their belief that egregious four figure sums for various licences are somehow doing LLs a favour.

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