Government’s so-called protection is damaging decent tenants’ prospects

by Dr Rosalind Beck

14:19 PM, 5th March 2021
About a month ago

Government’s so-called protection is damaging decent tenants’ prospects

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Government’s so-called protection is damaging decent tenants’ prospects

How the Government’s so-called protection for renters is damaging decent tenants’ prospects and leading to empty properties.

Enquiry 1: Hi, I’m John and i work as a sales assistant in Bristol, I would probably want the tenancy to start within the next month and go on for as long as possible really, also I don’t have a guarantor.

Hi John, Unfortunately, due to Government legislation we now have to have a guarantor. Sorry about that, and good luck with your search.

Enquiry 2: I am Masaya from Japan. I was interested in seeing this ad for you. I want to go see this house. However, I still can’t speak English well, so please exchange messages.

Hi Masaya, Unfortunately, we need the tenant to have a UK guarantor. I assume as you are from Japan that you do not have a family member in the UK who could be your guarantor? Good luck with your search.

These are real exchanges this week with potential tenants and this is the natural consequence of Government policy to enable tenants to stay for 2 years or more when they are not paying the rent.  Their cumulative 12 months’ eviction ban, 6 months’ notice periods, numerous new hurdles to jump – such as reactivation notices, reviews, mediation and debt moratoriums – directives to courts not to consider cases until 12 months’ arrears have accrued and huge delays now in the courts and with bailiffs – these combined ways of ‘helping tenants’ have had the exact opposite effect for potential tenants.

In the past landlords risked around 5-6 months’ loss of rent if they were unfortunate enough to get a bad tenant.  With the risks having multiplied because of the above Government policies I have heard many landlords say that they now prefer to have empty rooms or empty properties for even a few months rather than risk having to subsidise someone for several years – getting one of these tenants can be ruinous for landlords with only one or two properties who rely on the rent to pay the mortgage, but which is stressful for any landlord. Having a guarantor is the only way to mitigate the risk.

As seen in the exchanges above, with the Government’s protection of rogue tenants, the perfectly decent ones who need somewhere to stay either to work or study in the UK and whom landlords would previously have accepted are being shut out. How are international students going to find sufficient places to stay? (these are people who pay huge amounts to British universities in fees)  How will people who need to move for work who are foreign or don’t come from a home-owning family going to find somewhere to live? What will be the effect be on the economy?

I would be interested in hearing from other landlords about your policies regarding needing a guarantor, and how this is affecting your business and void levels. Be as specific as you can be regarding your likely losses and how many months of empty properties you have had over the last tax year due to the Government policies mentioned above.

Example: I had 3 empty rooms for 3 months, 4 months, and 5 months, so a total of 12 months’ rent lost at an average of £400, so £4,800 lost in the last year.

Comments

Gromit

16:39 PM, 5th March 2021
About a month ago

Not only a guarantor but a guarantor who is a home-owner and impeccable credit score.

Many of these policies are as a direct result of the so-called homeless charities lobbying government for such "protections" . But as ever this backfires and hurts the very people they purport to want to protect.

Whiteskifreak Surrey

23:42 PM, 5th March 2021
About a month ago

Regarding students: that has dried out almost completely, at least now. There is a huge number of student houses on the market - all not rented. The final year students will study from home. International students are not coming. Brexit - so favoured here - got rid of any new EU students, they do not want a hassle and prices. Others are waiting. In 15 years being Landlords for students we have never seen anything like that. Perhaps it is the time to sell?

Ian Simpson

7:28 AM, 6th March 2021
About a month ago

Thanks for another good article Rosalind. I was not aware it was now a govt regulation to get a guarantor for every tenancy...? When did this come in. ..?

We obviously always try to get a guarantor, but 80% of the time, the tenant cannot get one, so we take a chance and issue a tenancy.

Bill

10:10 AM, 6th March 2021
About a month ago

Hi Ros
I currently have 3 properties empty and will not relet any under the present conditions.
3 bed detached in N Wales part way through a refurb, delayed by covid, after the tenant from hell. Empty since March 2020 rent was £750 per month. Will eventually be going on the market.
2 bed flat N Wales empty since end Feb, gone straight on the market for sale rent was £525 per month.
The decision to sell these 2 is also partly due to Rent Smart Wales putting me through hell when I tried to renew my registration. I paid them twice, they did not renew and then gave me notice that my registration was being cancelled and I could no longer be a landlord in Wales. Took 2 months to resolve
and left me stressed.
2 bed flat in Manchester in a prime area, empty since Oct 2020. Tried to re let,
plenty of applicants, but none I would accept under present legislation. Placed on the market Feb and sold. Rent was £700 per month.
As other properties become vacant, my policy is now to sell.
Trust you find this useful.

Gromit

10:25 AM, 6th March 2021
About a month ago

Reply to the comment left by Ian Simpson at 06/03/2021 - 07:28
There isn't any Government legislation requiring Landlords to have guarantors. It is just the current legislation is so biased in favour of Tenants, why would you take the risk offering a tenancy without a guarantor?

Monty Bodkin

11:27 AM, 6th March 2021
About a month ago

Many landlords don't disclose information about why they reject tenant enquirers because of fears about legal issues like discrimination.

MoodyMolls

12:16 PM, 6th March 2021
About a month ago

Yes I am asking for home owner guarantors. Letting agent was getting up to 40 enquires but most were totally unsuitable. I to wait with empty properties rather than the Hugh risk of getting a non paying tenant.

I have one now 3 months no rent and both S21. And S8 six months notice. Either the government pays the arrears and reclaims from tenants income source or we should be able to evict within 14 days when they have spent the UC on other things

Ian Simpson

12:47 PM, 6th March 2021
About a month ago

Reply to the comment left by MoodyMolls at 06/03/2021 - 12:16
Yes , I think most UC payments end up being drunk, smoked or injected.... No point paying the rent when you know you will never ever have to... and even if you do eventually get evicted, the council will provide free accommodation forever...

Ian Simpson

8:08 AM, 7th March 2021
About a month ago

Apologies, I got confused as Rosalind’s article said:

“ Hi John, Unfortunately, due to Government legislation we now have to have a guarantor. Sorry about that, and good luck with your search.”

I realise this was an example now, and not based on Govt legislation at all.... I suppose a savvy tenant might ‘ave you for saying that! (Or Shelter would!) but yes, good strategy, and I think we will simply keep all our rooms empty now until we get guarantors for any new tenants....

DALE ROBERTS

13:42 PM, 7th March 2021
About a month ago

The fact that government interference adds to, if not directly causes homelessness, should be exposed and highlighted by more articles such as this.
I own/ed two BTL's in London. I've described my situation before.
The first one got sold after I finally managed to evict a serial rogue tenant who cost me over GBP13 000 in unpaid rental and a further R3000 in unpaid heating bills. A GBP500 000 unit was trashed. It took 6 months to evict her after she stopped paying rent. I refused to house another tenant and placed the unit on the market once it had been refurbished at a cost of GBP5 000. It took 18 months to sell as the cladding was an issue.
My second unit, which is a replica of the first, has been empty since June 2020. I refuse to tenant it under the present legislation but am unable to sell it, once again, because of the cladding issue. So I fund the mortgage, and utilities, and service charges, and ground tax and Council Tax under no illusions that the cladding issue will be resolved in the next two years.
I still prefer it empty as opposed to housing a tenant.
And that decision is based solely on the egregious and biased legislation that places me at such a disadvantage concerning my own property.
And bear in mind my units were rented out at GBP1 800 per month.
I'm prepared to forego that rental to safeguard myself and my property.

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