Generation Rent wants the Government to force landlords to accept more risk

Generation Rent wants the Government to force landlords to accept more risk

17:17 PM, 1st June 2021, About 3 years ago 40

Text Size

Many people will have heard on the radio over the Bank Holiday weekend reports about the eviction ban ending. A Joseph Rowntree Trust claim that 800,000 households face losing their homes was repeated throughout the day. Not once did Radio 4 or Times Radio mention rent arrears. Not once did they say that many landlords have received no rent for months and in some cases are themselves in financial difficulties because of that.

No landlords were interviewed. Nobody made the obvious point that, in the current climate, sensible landlords won’t evict without good reason and also that they still need to give four months’ notice under s21 so (law of unintended consequences at work) it is logical and prudent to s21 serve notices now just in case.

This morning (1st June 2021) Radio 4’s Today Programme. (I have listened again on the Sounds App to ensure I heard correctly) was enlightening. For a piece about landlords asking for six months’ rent in advance, they interviewed Dan Wilson Craw (DWC) of Generation Rent. The programme host, to be fair, did suggest there might be a backlash by landlords because of the eviction ban. Some landlords having had a bad experience of not being paid took rent upfront to provide some security. Too right.

DWC’s immediate response was to complain about landlords “wanting to avoid risk”. He criticised us for filtering out tenants on benefits and for “wanting to screen out those who [we] think may not be able to afford [the rent] in future”.  Guilty as charged, m’lud. If a prospective tenant looks as if they can’t pay the rent, I don’t want him or her especially if I have to wait for months of arrears to accumulate.

DWC’s proposal was, and I quote: “The Government needs to give tenants more options and force landlords to take on accept more risk”.  Well, at least that is clear. Landlords, as distinct from other businesses, must be compelled to act imprudently. Having been stung already, we should take on more risk. There was no acknowledgement by DWC that landlords who are thousands of pounds out of pocket can’t be expected to act as if nothing had happened. We are just involuntary creditors to be treated as milch cows.

What happens when businesses are required to accept more risk? Well it often ends badly. Remember the sub-prime loan crisis made much worse when left-wing politicians pressured banks to lend to people with bad credit histories. Many people lost their homes and some were bankrupted.

I hope that politicians are listening. If they expect landlords to take more risk then rents will have to go up to compensate for increased defaults. More defaults and landlords will obtain more County Court judgments. More tenants will have credit scores ruined, making it harder than ever for them to buy a house.


If Generation Rent have their wish I predict rents will go up, more tenants will default. More CCJs, more misery all round. Not a great policy. A modicum of analysis would show it is unsustainable. Generation Rent don’t seem to realise that they will hurt the people they profess to support. If DWC or anyone else at GR would care to comment on this board, please do so.

Share This Article



19:38 PM, 1st June 2021, About 3 years ago

Don't think the rents will go up massively, you can't take more money off people who may already being paying their limit or who have suffered a drop in income. The risk of putting rents up is that you end up with more rent arrears/voids/evictions and unless your properties are fully paid for or very lowly mortgaged, arrears, voids and evictions are something you want to avoid.

The problem is, the government can't afford to pay the housing costs for these 100k's of people and need to find a soltuion quick to prevent politically unacceptable levels of homelessness.

They are going to put the screws on the PRS sector with continually more regulations, taxes and 'eviction ban' type moves, it's obvious.

If you go bankrupt, they don't care, the house doesn't disappear. If you sell up, they don't care, they potentially convert a tennant into an owner occupier.

Oh, and the rest of the population don't care either, in fact a lot of tenants have nothing but contempt for the landlords who are competing with them for housing stock.

Monty Bodkin

20:51 PM, 1st June 2021, About 3 years ago

Don't think the rents will go up massively, you can't take more money off people who may already being paying their limit

Industry standard is minimum 3.5 times income to rent ratio.

Rents could (uncomfortably) double in extremis.

Risk = Reward.

The Forever Tenant

8:26 AM, 2nd June 2021, About 3 years ago

Rents couldn't double.

I've found that agency's at least want 30x annual salary to monthly rent. So for rents of £1,000pm that's £30,000 a year. After tax this translates to to around £1,900 a month.

When you consider electricity, gas, council tax, etc there's not a lot left for the rent.

Increase rents too much and I absolutely believe that the government will step in to reduce the biggest outgoing.

Dennis Forrest

9:08 AM, 2nd June 2021, About 3 years ago

IMHO far less risk to have a portfolio of shares with reasonable yields. The rules don't change. OK shares can go up or down but the long term trend is up, equalling or bettering rises in property prices. Dividends can be reduced or passed but in many cases this is only temporary. Shares showing a profit can be sold and timed so that the gain is within the annual tax free limit. Of course no tax of any kind has to be paid if as much money as possible in invested via an ISA.

Chris @ Possession Friend

10:15 AM, 2nd June 2021, About 3 years ago

What do you expect, - from the BBC ?

Chris @ Possession Friend

10:22 AM, 2nd June 2021, About 3 years ago

Reply to the comment left by at 02/06/2021 - 09:08We know a number of landlords turning ( or adding ) to alternative investments with a 1% a DAY yield


10:24 AM, 2nd June 2021, About 3 years ago

If this does come to pass, then the Govt. should legislate to allow landlords to express the increased risk by moving the HMRC classification of all or a proportion of their business from 'Investment' to 'Trading'.
I am thinking of the help that Business Property Relief (BPR) would bring to table.

Monty Bodkin

11:18 AM, 2nd June 2021, About 3 years ago

Reply to the comment left by The Forever Tenant at 02/06/2021 - 08:26
Plenty of room for rents to increase (I'm not saying that's a good thing but increase the risk and that is what happens);

On average, private renters spent a third (33%) of their household income on rent.

Alistair Cooper

11:48 AM, 2nd June 2021, About 3 years ago

There is already huge risk in taking on new tenants thanks to the virtual collapse or deliberate strangling of our civil justice system.
Notice periods are all but irrelevant when you simply cannot obtain a Possession Order through the woefully mismanaged County Courts.
Organisations of all shapes and sizes have had to adapt to Covid restrictions however it’s difficult to think of one that has done a worse job The Court Service. It’s simple refusal to embrace any kind of technology, the indifferent arrogance of its staff and the total contempt in which it treats the fee payers is simply immoral.
I have one ‘allegedly’ active case in which the tenant over ever paid the deposit and 1st months rent and secured the tenancy with a forged payslip; has refused in engage since and is now 14 months in arrears.
I have been promised three ‘review’ hearings by the Luton County Court. All 3 have been missed without notice. There is no end in sight of even the 1st substantive hearing.
The conclusion ; there is already a real risk of losing at least 24 months rent when one takes on a new tenant before any kind of eviction could ever happen. The so called lifting of the eviction ban is a mere smoke screen.

Ian Narbeth

12:07 PM, 2nd June 2021, About 3 years ago

Reply to the comment left by Alistair Cooper at 02/06/2021 - 11:48
I am sorry to hear this. It seems that Generation Rent would like the Government to force
you to take more risk on your next letting.

1 2 3 4

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now