My landlord vision for Christmas 2025 – it’s not good for tenants

My landlord vision for Christmas 2025 – it’s not good for tenants

8:26 AM, 31st January 2025, About A week ago 44

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It’s been six months since the Renters’ Rights Bill hit the statute books and the dust still hasn’t settled.

Tenants are outraged at the government’s meddling and can’t believe that evictions haven’t ended.

That’s despite reassurances from the naïve crowd in Labour that Section 21 ‘no-fault’ evictions are the ‘leading cause of homelessness’.

But we’ve since found out that wasn’t the case.

Rent arrears, anti-social behaviour and fed-up landlords bailing out of the PRS are the reasons why renters were being evicted.

Who knew?

Promise of tenant empowerment

There’s little festive cheer for the UK’s landlords after the promise of tenant empowerment has morphed into a harsh autumn of a growing PRS disaster, and frankly, it’s not a pretty sight.

My crystal ball has been working overtime to paint this bleak picture:

  • The housing crisis deepens: The promised 1.5 million new homes? Still a pipe dream. Meanwhile, the landlord exodus we predicted has become a reality, drastically shrinking the supply of rental properties. Tenants, now clinging to their rented homes like life rafts, are staying put for longer, not out of choice, but necessity. The inevitable result? Rents have rocketed as landlords opt to price high to avert any legal challenge of creating a bidding war. This move disproportionately impacts those on benefits or low wages – the very people Labour claims to champion
  • Periodic tenancies: The introduction of periodic tenancies has wreaked havoc on the student accommodation sector, as predicted. Student landlords take fright at the prospect of students handing their notice in after Christmas to live with parents and save cash. Overseas students face a near-impossible hurdle since they can’t pass stricter tenant checks without a UK presence, and with landlords understandably wary of accepting illegal advance rent payments, they’re left stranded. Potentially, universities could help but they don’t have the accommodation levels (thanks to years of over expansion…)
  • Notice periods: The much-lauded ability for tenants to give two months’ notice from day one, while landlords remain bound by longer notice periods, has created a power imbalance. Despite the Bill having the aim of levelling up the playing field, landlords now face extended void periods and the recurring costs of finding new tenants. Grounds for possession under Section 8, requiring a year’s occupancy, further tie landlords’ hands. To me, this is no longer an investment strategy; it’s indentured servitude
  • Selective licensing goes wild: Councils, emboldened by the Labour decision to remove the Secretary of State’s permission before creating a scheme have unleashed a torrent of selective licensing scams, I mean schemes, adding another layer of red tape and cost for landlords – though it’s tenants picking up the bill
  • Arrears and the Courts: The extended period before rent arrears become actionable, coupled with the chronically overburdened court system, has created a perfect (predictable) storm. Tenants can effectively enjoy a rent-free period for months, potentially years, while landlords are left powerless. Lefty judges and solicitors don’t help the situation
  • Guarantors: The restrictions on accepting guarantors adds another layer of risk, particularly for younger tenants. It appears that only landlords should be put at a potential financial disadvantage
  • EPCs: Labour continues doubling down on the EPC C rating by 2030 despite the whole Net Zero nonsense harming the economy and putting us at a disadvantage with leading economies. There’s still no sign that this much needed measure to deliver ‘warm and comfortable’ homes will extend to the social housing sector. It’s just another nail in the coffin for landlords, driving even more out of the market.

Evidence of a landlord exodus

Housing minister Matthew Pennycook and his cronies still deny there’s evidence of a landlord exodus, but more are leaving than investing. They bury their heads in the sand and deny the damage, but the reality is clear.

The Renters’ Rights Bill, far from being a panacea, has exacerbated the very problems it purported to solve. Even the government’s late pitch to impose rent caps doesn’t play well – everyone can now see why rents are rising. It isn’t landlord greed.

For landlords, Christmas 2025 is a stark reminder of well-intentioned, but ultimately misguided, legislation.

It’s a time for reflection, and perhaps, a strategic rethink.

The PRS landscape has undoubtedly changed with both tenants and landlords losing out.

The scenario was inevitable but it’s way worse than landlords could have foreseen and there’s no sign of a U-turn since the Labour clown show government is too busy fighting the fires it started: there’s no economic growth, immigration spirals out of control, overtaxed businesses are still laying off, incomes and living standards plummet – basically, it’s January 2025 on steroids.

We’re back to the problem of unintended consequences – that is if you ignore the expertise of landlords who have been vilified and who are too beaten to say, ‘We told you this would happen’.

Until next time,

The Landlord Crusader


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Keith Wellburn

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20:33 PM, 4th February 2025, About 4 days ago

Reply to the comment left by Joanna at 04/02/2025 - 19:31
Hi Joanna, Publicly traded Build to Rent shares can be bought and sold on web based dealing platforms but you perhaps need some professional advice to ensure they fit in with your overall plans.

The problem is, I can’t recommend or give financial advice and it’s impossible to give any guarantees about future returns as part comes from dividends but the remaining element is the value of the investment which can go up or down. Some shares I have done well with since buying were actually trading at a higher price 3 or 4 years ago. They can be more volatile than
actual property prices. Then there is the question of whether you want to look at shares from just the UK or overseas as well or funds spreading the risk.

I’ve always had an interest in share investing and reading financial sections of quality newspapers so I can’t give you any specific suggestions of where to read up as I’ve just picked up knowledge over many years. Internet searches for publications about investing in shares in general and Build to Rent and Real Estate Investment Trusts (REITs) in particular would be a start but no one can really give you specific investment advice except a qualified professional adviser. Hope that helps.

NewYorkie

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21:48 PM, 4th February 2025, About 4 days ago

Reply to the comment left by Joanna at 04/02/2025 - 19:30
I have a Fund and Share account with Hargreaves Lansdown, and simply purchased a number of shares in the PRS REIT.

They are looking at the possibilities of being acquired, which could [hopefully] result in a decent bounce for existing shareholders.

Keith Wellburn

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21:56 PM, 4th February 2025, About 4 days ago

Reply to the comment left by NewYorkie at 04/02/2025 - 21:48
I hold PRS too, also RESI which seems about to wind down too. Grainger apparently going to convert to a REIT later this year - much bigger scale so should be around longer term.

Michael Crofts

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13:06 PM, 5th February 2025, About 4 days ago

Reply to the comment left by Peter Merrick at 01/02/2025 - 22:09I am adding to the excellent replies by Dylan Morris and Reluctant Landlord about whether you have to "follow through" an intention to sell.
Referring to the current text of the Bill as it was brought from the House of Commons (https://bills.parliament.uk/publications/57759/documents/5623) under s.17 of the Bill the Housing Act 1988 will be amended and the following will apply:
'16J Offences
(1) A relevant person is guilty of an offence if, in relation to an assured tenancy—
(a) the person relies on a ground in Schedule 2, knowing that the landlord would not be able to obtain an order for possession on that ground, or being reckless as to whether the landlord would be able to do so....
The penalty is up to £40,000
In the House of Lords yesterday Lord Etherton said: 'It is not right for the employees of a local housing authority who have no legal training and no criminal trial experience to be free to impose a financial penalty of larger sums—up to £40,000—on their assessment of whether the ingredients of a criminal offence had been committed. A good example of the dangers of this is the ability of a local housing authority to impose a financial penalty of up to £40,000 where it is satisfied beyond reasonable doubt that an offence has been committed under Section 16 of the 1988 Act, where the landlord relies on a ground in Schedule 2, knowing that they would not be able to obtain an order for possession on that ground or being reckless as to whether they would be able to do so.'
But the government will push this through. It will cost £40,000 to attempt to regain possession because you say you want to sell, and then you don't get your order because you can't prove you are going to sell. And the person imposing the fine on you will not be a trained lawyer, it will be an ordinary employee in the local housing authority, in my case a District Council where the majority of employees work from home and live outside the area.

Dylan Morris

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13:36 PM, 5th February 2025, About 3 days ago

Reply to the comment left by Michael Crofts at 05/02/2025 - 13:06
Good research Michael. I’m not sure how a landlord proves he wants to sell ?

Michael Crofts

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13:51 PM, 5th February 2025, About 3 days ago

Reply to the comment left by Dylan Morris at 05/02/2025 - 13:36I can tell you that the answer is not to be found in the Bill.
The question of proof of intent was debated in one of the early Committee hearings and some cogent arguments were put forward, all of which were ignored, as indeed all cogent arguments have been ignored. Not a single non-government amendment has been carried forward. Pennycook protests that he wants to get the balance right but he will not countenance any amendment to his bill that does not come from his department.

Ryan Stevens

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14:25 PM, 5th February 2025, About 3 days ago

Yet another reason to not continue to be a landlord. I travel a lot and would not want to risk having to disclose a criminal record over some property related offence, especially over something such as wanting to sell my own asset!

Michael Crofts

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14:33 PM, 5th February 2025, About 3 days ago

Ryan, I think you are wise. If you travel I assume you delegate management to an agent. I have read the entire Bill, the original and as brought to the Lords, I listened to every minute of the Committee's deliberations, and I have read every paragraph of the Hansard reports. I am quite certain that only a minority of employees of managing agents, and only a small majority of principals, will be able to cope with the complexities of management which the Act will introduce. The penalties for even minor infractions are so severe both financially and reputationally (because of the database) that the risk will be too great for anyone who has to delegate.

NewYorkie

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16:56 PM, 5th February 2025, About 3 days ago

Reply to the comment left by Michael Crofts at 05/02/2025 - 14:33
Now that it's gone through its second reading in the Lords, it's pretty much a done deal, especially when Penny cook has refused to countenance any deviation. Time agents started to assess the position vis a vis their clients' responsibilities Vs their own, and how they will deal with errant tenants.

I fear for the PRS.

Michael Crofts

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17:58 PM, 5th February 2025, About 3 days ago

Reply to the comment left by NewYorkie at 05/02/2025 - 16:56
Agents will also have to decide how to weed out errant, dilatory and incompetent landlords, especially the ones who can't be told what to do because they ignore anything they don't want to hear. Agents who have bad landlord clients, or landlords with bad properties, will be in very serious trouble.

I agree it's pretty much a done deal. I expect the committee stage in the Lords will be performative theatre, nothing else. A load of hot air and no meaningful changes.

By the way, yesterday in the Lords Baroness Eaton said: 'I have spoken with... the build-to-rent sector... It appears to me that the build-to-rent sector is particularly susceptible to the clauses in the Bill, in its current form, that pertain to open-ended tenancies with two-month notice periods, where renters can serve notice to leave their home on day one. ... allowing renters to immediately serve notice to leave their rented home on day one of their tenancy will have a detrimental impact, particularly on the build-to-rent sector’s ability to secure investment, both domestic and foreign, to deliver the homes that this Government want to see built.'
Unintended consequences are a britch.

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