Renters’ Reform Bill: Landlords panic and are selling up

Renters’ Reform Bill: Landlords panic and are selling up

0:03 AM, 19th May 2023, About 10 months ago 8

Text Size

One firm says it has been seeing landlords panic and sell up over the prospect of what the Renters’ Reform Bill means for them.

The eviction and housing law specialists Landlord Action says April was its busiest month for 23 years.

It also says that the serving of section 21 notices has rocketed by 91% since last April 2022.

‘Landlords started making plans to sell’

Paul Shamplina, the founder of Landlord Action, said: “The Renters’ Reform Bill is, as expected, amongst other things abolishing Section 21, and therefore will come as little surprise to landlords, some of whom have already started making plans to sell in anticipation.

“April was Landlord Action’s busiest month in 23 years, with a 91% year on year increase in the number of step two section 21 notices being served.”

‘More landlords will start to panic’

He added: “I have no doubt that as the date for the end of section 21 nears, more landlords will start to panic, which will lead to more good tenants having to leave their homes.

“The Government has made reference to digitising more of the process for those evictions which do end up in court, by way of speeding up the process.

“Whilst this is positive, greater reform of the court system will be required if landlords are to have confidence to remain in the market.”

Landlords selling up and leaving the PRS

The growing trend of landlords selling up and leaving the PRS is also underlined by Oli Sherlock, a director at rental market expert Goodlord.

He said: “Right now, all the anecdotal evidence points to a rising number of landlords deciding to sell up.

“This, combined with a chronic lack of new rental homes being built, is creating a supply and demand issue that is driving up rental prices, creating despair for tenants seeking new homes, and resulting in market conditions which this Bill hasn’t been designed to fix.

“I think there are also valid concerns around whether the courts will be able to cope with the rise in cases this Bill will likely create, even with increased digitisation.”

‘Line of urgent changes that are needed’

Mr Sherlock continued: “The Government should not see the publication of this legislation as a job done. It should be the first step in a longer line of urgent changes that are needed.

“A healthy rental market requires empowered, protected tenants as well as fair-minded, incentivised landlords in order to function.

“Any legislation that addresses one without the other won’t make the difference it needs to.”

Landlords deciding to vote with their feet and leave

Laura Southgate, a partner in the property disputes team at Cripps also believes that the Renters’ Reform Bill will see landlords deciding to vote with their feet and leave the PRS.

She said: “On the whole, this bill is a positive development as it seeks to tackle the housing crisis – but the uncertainty it has created for landlords must be addressed by the government.

“Otherwise, it may have the opposite effect: landlords leaving the sector, and consequently, a greater shortage of housing.

“Landlords are generally receptive to change and can see the benefit in offering tenants a greater degree of security.

“However, it’s unclear whether the courts can keep up with the changes: there will always be tenants who don’t comply with the tenancy agreement, and landlords want to be sure that, should this happen, they will be able to recover possession.”


Share This Article


Comments

Alexandra

11:28 AM, 19th May 2023, About 10 months ago

OK so Landlord Action say S21 notices have rocketed 91% since last year and when we get a date for abolishing S21 there will be a further exodus.
So how can Laura Southgate say “On the whole, this bill is a positive development as it seeks to tackle the housing crisis.
In what way does it possibly seek to tackle a housing crisis - more like it is exacerbating one!

Reluctant Landlord

11:30 AM, 19th May 2023, About 10 months ago

one property (3 flats) sold yesterday, and two houses at the end of last year...strategic withdrawal is in action...

last private landlord standing, please shut the door...

Blodwyn

11:39 AM, 19th May 2023, About 10 months ago

I’m afraid there are more tenants than landlords. Each person has a vote. This government is desperate, ask your MP if he or she may be persuaded to be honest?

Nick Van Hoogstraten

11:57 AM, 19th May 2023, About 10 months ago

Only a 91% rise? The level of S21 is very low anyway. Maybe 1-2% of all ASTs. It's a pitiful rise considering the calamity Reform Bill.

Trapped Landlord

14:29 PM, 19th May 2023, About 10 months ago

They may be a mass sell off , but a sell off to who ? Given what we're facing with section 21, interest rates, widespread selective licensing , and epc threats , What landlords will want them ? I for one would only be looking at paying 2/3 of market value. If these landlords exiting the market are hoping to achieve high prices , i believe it will only be owner occupiers in the hunt.
Terraced houses in my area of the midlands are still rising , i just cannot see for one minute , any landlord would pay 150k with all of these pending threats for 600 quid a month ??

Mr.A

17:04 PM, 19th May 2023, About 10 months ago

Landlords with sought after desirable properties will have no problem selling at the market rate , only the undesirable run of the mill properties will struggle, so the best properties will leave the PRS ,
Who does that help , Not the tenants ,not landlords ,
The Sh!+ is about to hit the Fan.

Reluctant Landlord

17:29 PM, 19th May 2023, About 10 months ago

Reply to the comment left by Trapped Landlord at 19/05/2023 - 14:29
yup I see the same - only FTB's going to be interested....or of course those certain type of LL that throw 2 fingers up to the law as it is, and therefore more shafted tenants and property left to degrade... back to the slums of old...

Reluctant Landlord

17:32 PM, 19th May 2023, About 10 months ago

Reply to the comment left by Trapped Landlord at 19/05/2023 - 14:29
check out auctions sites. Lots of 2/3 bed housing in lots of not so great midlands areas/Stoke/nottingham/etc going at 130-150k already. Someone's picking them up...
unless you have dodgy cash to get rid of its got to be FTB. Serious LL's are selling not buying to let....

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now