0:01 AM, 31st May 2023, About 6 months ago 3
Lettings agents in The Guild of Property Professionals are sounding the alarm bells, claiming that the Renters’ Reform Bill could be the knockout punch that forces countless landlords out of the private rented sector (PRS).
One agent has dubbed the proposed legislation as the ‘straw that broke the camel’s back’ because the proposed ban on Section 21 ‘no-fault’ evictions is sending shockwaves through the industry.
Graham Wood, a seasoned landlord with 20 years’ experience and managing director at Home Sales and Lettings, warns: “The long-awaited Renters’ Reform Bill has successfully spooked numerous landlords into selling their rental properties.
“It feels like landlords have been under constant attack for the past five years.
“First, the income tax advantages were stripped away, and now we face the grim reality of Section 21’s abolition.”
According to Mr Wood, this relentless assault on landlords has triggered a surge in rental properties hitting the market, as fearful landlords scramble to cash in.
He said: “At our agency, tenants seeking new listings often cite their landlords’ intentions to sell as the primary reason.
“In the last 18 months alone, around 10% of our managed properties have been sold, and we anticipate this figure climbing to 15% by the end of 2023.”
He added: “This trend isn’t unique to us – it’s widespread across the UK.
“As available properties dwindle, the law of supply and demand kicks in, causing rents to skyrocket. Once again, tenants bear the brunt of ill-conceived legislation.”
Simon Davies, a branch manager at Norman F Brown, believes the Bill has been presented as a boon for tenants and a bane for landlords.
However, he cautions that the devil lies in the details yet to be revealed, leaving landlords on edge.
Mr Davies argues: “While the scrapping of Section 21 appears daunting, there will still be avenues for swift possession, such as property sales, addressing anti-social behaviour or a landlord’s intention to reclaim their own property.
“But without prompt clarification from the government, some landlords may succumb to uncertainty and sell up.
“This reduced supply will only drive rents higher due to market forces.”
Alex Umut Sevinc, the head of operations at Filey Properties, reveals that many landlords he has spoken to view the Renters’ Reform Bill as primarily focused on the banning of Section 21.
He said: “Landlords fear they won’t be able to regain control of their properties when needed.
“Some even worry that tenants might have the power to buy the property from them.
“While these claims remain speculative, they’ve sparked panic among landlords.”
He adds: “Moreover, many landlords are anxious about the potential freeze on rent or limitations on rental increases.
“With rising interest rates, maintenance costs, and tax implications, it’s another burden they can ill afford.”
Mr Sevinc highlights landlords’ major concern: the prolonged process of tenant removal, particularly the ‘accelerated possession’ route, which often takes up to nine months.
The apprehension stems from uncertainty surrounding the new eviction process and the grounds on which it can be executed.
He also says that the introduction of the new Property Portal for landlords is seen by many as yet another burden to deal with – and many fear the portal will be another punishment for those who comply with regulations, pushing them to the brink.
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