9:21 AM, 9th June 2023, About 6 months ago 17
I can’t keep quiet! Two stories on the same day on Property118 highlight what is wrong with the private rented sector – and if everyone concerned took a step back to understand the other side’s point of view, it would make everything a lot better.
First up is the incredible news that Generation Rent wants landlords to pay a two months’ rent penalty to help tenants move home.
This is unbelievable – so incredible that I went to their site to find out more and I wish I hadn’t bothered.
While calling for support for their campaign, they list their demands for the Renters’ Reform Bill – and if PRS landlords aren’t worried about this legislation then take a look at what this campaign group is striving to have added to the Bill:
That isn’t just a wish list – it’s pure fantasy! How on earth does that list of wants bring equity to the PRS? The other members of the Renters Reform Coalition also make outlandish demands.
My big issue is that the renter campaign groups in the UK are demanding radical changes to the housing market that would harm both landlords AND tenants. They want to abolish Section 21 evictions, introduce rent controls and end discrimination against benefit claimants.
These proposals are misguided, unrealistic and unfair. They would undermine the rights of property owners, reduce the supply and quality of rental housing and create more homelessness and poverty.
Section 21 evictions – so-called ‘no-fault’ evictions – allow landlords to end a tenancy without a reason but must give two months’ notice. The renter campaign groups claim that this creates insecurity and fear for tenants, who could be evicted at any time for no fault of their own.
They want to replace Section 21 but don’t specify with what. The government is hinting that we will get a stronger Section 8 process which requires landlords to prove a ground for eviction, including rent arrears or anti-social behaviour.
However, Section 21 is not a tool for arbitrary or malicious evictions. It is a vital safeguard for landlords who need to regain possession for a legitimate reason, such as selling it, or to renovate it or even move in. Section 8 is not an adequate alternative, as it is slow, costly and unreliable. Landlords often face delays and difficulties in obtaining a court order for eviction, even when they have valid grounds. This leaves them vulnerable to rent loss, damage and abuse from rogue tenants.
And as Property118 highlights with the second shocking story of the day – there is a backlog of eviction cases because there aren’t enough bailiffs, and they haven’t got have enough protection kit. So how do we evict bad tenants or even take back the house for our own use?
Abolishing Section 21 will discourage landlords from letting their properties to those who are seen as risky or unreliable. This would reduce the availability and affordability of rental housing for anyone on a low-income and vulnerable groups. It would also increase homelessness, as landlords would be less willing to offer temporary or short-term accommodation.
Rent controls are another policy that the renter campaign groups are pushing for. They argue that rents are too high and unaffordable for many tenants, and that rent controls would make housing more accessible and stable. They propose to cap rents at a percentage of local incomes or property values, and to limit rent increases to inflation or below.
However, rent controls are a proven failure. They distort the market and create unintended consequences. They discourage investment and maintenance of rental properties, leading to a decline in the quantity and quality of housing.
They create shortages and waiting lists, forcing tenants to compete for scarce and substandard accommodation. They reduce mobility and flexibility, locking tenants into long-term contracts that may not suit their changing needs or preferences. They also create black markets and corruption, as criminal landlords and tenants try to evade or manipulate the rules.
Rent controls are not the solution to the housing affordability crisis. They have never worked anywhere but still our politicians talk about them like they will solve everything. (I suppose I should mention the third shocking story of the week as the Welsh government has started a consultation about introducing rent controls. The NRLA says this will be a ‘disaster’ – that is an understatement).
The root cause of high rents is the lack of supply relative to demand. The only way to lower rents is to increase the supply of housing by removing planning restrictions, encouraging development and supporting housing innovation.
The renter campaign groups also want to end discrimination against benefit claimants in the rental market.
However, landlords are not discriminating against benefits claimants out of prejudice or malice. They are responding to the realities and risks of the welfare system. The benefit payments are often insufficient to cover the full rent, leaving tenants in arrears and landlords out of pocket.
The payments are also delayed or disrupted by administrative errors or changes in circumstances, creating uncertainty and stress for both parties. And, more importantly, lots of mortgage lenders and insurance providers do not allow landlords to let their properties to benefits claimants, or they charge us higher fees or premiums, if they do.
Ending discrimination against benefits claimants would not help them access more or better housing. It would only force landlords to raise their rents or deposits, screen their tenants more rigorously, or exit the market altogether.
The real solution is to reform the welfare system so that it pays the rent directly to the landlord, covers the market rate and is reliable and responsive.
The renter campaign groups are misguided in their demands for radical changes to the housing market.
Landlords provide a valuable service to society by offering choice, flexibility and convenience to millions of people who need or prefer to rent.
We deserve respect and recognition, not vilification and regulation. As I have said before; talk to us, work with us, and we can create a PRS that works for landlords and tenants – but without the ludicrous notion that all landlords are fantastically rich and can afford to splash out two months of rent to help a tenant move on.
Well, we can’t now but we will do if this idea is added to the Bill – because it will be the tenant paying for it with a higher rent.
So, I say to the Renters Reform Coalition and Generation Rent, like a lot of your barmy ideas for landlords – I bet you haven’t thought of that, have you?
Until next time,
The Landlord Crusader
Previous ArticlePRS landlords feel 'demonised' by the media