Is government policy hurting the vulnerable and driving landlords out of the market?

Is government policy hurting the vulnerable and driving landlords out of the market?

0:01 AM, 15th November 2024, About 3 weeks ago 6

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Many vulnerable tenants are people who need the most help and support from their landlord. There are a large number of landlords who overlook lack of bond, damage, behaviour, and freely offer emotional and monetary support to these vulnerable tenants. However, the relationship is uncomfortable.

With the abolition of Section 21 and retrospectively applying this to around 5 milion tenancies the government is creating a maelstrom.
Instead of allowing existing tenancies to run on the agreed contract, the government sees fit to prevent a landlord taking control back of a property they have bought without likely facing punitive costs and delays using Section 8.

Shelter reports less than 10,000 bailiff evictions in 2023 out of around 5 million tenancies. This is around 1 in every 500 tenancies were bailiff evicted.

This change appears extremely poor policy. Better policy would be to make step changes so new tenancies would not allow section 21 after all Assured Shorthold tenancies have been around for 30 years. Making gradual changes allows reasonable time to plan.

Thatcher did this when the housing market was completely revolutionised by allowing people to buy their council house and introducing Assured Shorthold tenancies which allowed mainstream lending in the buy to let sector. These policies changes were orderly and voluntary. Old style tenancies were not banned and you didn’t have to buy your council house! The current brutal policy is damaging because it retrospectively applies changes to around than 5m tenancies.

Any landlord who may have been unsure of his tenants will likely feel panicked into issuing a section 21. This is in part due to the many additional pressures the government is choosing to apply at the same time to landlords.

Sadly this policy will ensure that many vulnerable tenants are given section 21 as it’s the only recourse available to landlords worried about the dilemma. They will also have to do this soon.

This will likely lead to a large number of the most vulnerable without accommodation and the councils having to fund short term accommodation. Some councils are already reporting this as their biggest costs.

In many poorer areas we are seeing a growing number of empty available houses yet none available to rent. Fleetwood in Lancashire is a good example of this. Someone on the living wage could borrow enough to buy a house yet there are now many empty and for sale.

If any evidence is needed they could simply look at the figures for vulnerable needing housing on waiting lists and see a growing stock of empty for sale houses where landlords don’t want to buy.

When there is a large range of cheap empty houses for sale, yet no houses available for private rental the government should wake up and smell the coffee.

It really isn’t difficult but policies get sidetracked and evolve causing damage because of the way they are developed and the people involved in the decisions who appear to act out of emotion and not evidence.

How can the government protect tenants without pushing landlords out of the market? What does the property118 community think?

Thanks,

Paul


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Comments

Maureen Treadwell

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11:03 AM, 15th November 2024, About 3 weeks ago

Good article, Paul. We need better policy. Lobby groups fall into polemical silos; landlord organisations like NRLA versus tenant lobby groups with either one or other holding sway and somewhat deaf to the perpective of the other. In fact, as Paul has highlighted, the interests are not polemical. There needs to be a private rental sector think tank to advise government that is not polemical but consists of both tenants and landlords and considers and researches policy initiatives that work. There is funding out there to do this - we just need the core group to get this going.

Marlena Topple

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11:14 AM, 15th November 2024, About 3 weeks ago

Legislation and tax changes combined with an increase in demand for rented accommodation is limiting supply, pushing up rents, and providing disincentives to let to vulnerable tenants who are less and less likely to be able to secure housing in the private sector. This will lead to increased homelessness, and a bigger burden on the state in terms housing benefit and temporary accommodation. The situation is catastrophic for all renters and particularly the most vulnerable.

Mick Roberts

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15:17 PM, 15th November 2024, About 3 weeks ago

That's me:
There are a large number of landlords who overlook lack of bond, damage, behaviour, and freely offer emotional and monetary support to these vulnerable tenants.

And yes too many retrospective changes after we've already committed.

Reluctant Landlord

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16:02 PM, 15th November 2024, About 3 weeks ago

what is completely overlooked is not even the numbers of LL selling up (however the numbers are disputed), the number of empty properties (just empty or purposely left so) or the proposed tenant biased legislation...the reality there is absolutely NO reason for any existing LL to purchase more accommodation or any encouragement for any new LL to enter the PRS and supply anthign either.

With more wanting accommodation and nothing new even being provided it's akin to leaving the plug on the side of the bath off and still running the taps to fill it.

No future for potential renters and a bleak look ahead for those that have somewhere now, but may not have very shortly....

The PRS is being shafted from the government from all angles, and ultimately the dire consequence lands in the tenants lap.

Reluctant Landlord

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16:10 PM, 15th November 2024, About 3 weeks ago

When there is a large range of cheap empty houses for sale, yet no houses available for private rental the government should wake up and smell the coffee.

The thing is 'cheap' houses are no longer once SDLT is now taken into consideration and the increased costs of labour and supplies etc. Working that into an investment proposal and less than X% yield is simply not enticing when you factor in what the level of rent you can realistically achieve.

Job security for many tenants is now a worry (NIC fiasco c/o of the budget) so do you want to be left with someone who can't pay the rent? Extended possession tenant rights, increased court costs etc. How do you put a price on this additional yet very possible 'risk' to factor that into the overall investment calculations?

Properties with tenant in situ are more common that was...that I assume will only increase if LL find it financially tough. Again, who is going to want to step into their shoes?

Maureen Treadwell

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16:24 PM, 15th November 2024, About 3 weeks ago

All of the above comments are important and true but until we get the message out, to policy makers the same nonesensical policy decisions will continue to be made. There is no point in us talking to each other. We need to talk to decision makers and get the message out with the slick comms skills of Shelter and Generation Rent. We need an effective policy lobby group - that balances tenant and landlord rights.

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