Renter’s Rights Bill: A disaster for tenants?

Renter’s Rights Bill: A disaster for tenants?

12:29 PM, 13th September 2024, About 4 weeks ago 20

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Have you recovered yet? As a landlord, the Renters’ Rights Bill is NOT designed to help renters – it is clearly designed to damage the private rented sector. Potentially, fatally.

If you are a tenant, a politician or work for the likes of Shelter or Generation Rent, then you’ll need to start polishing your excuses for when:

  • Evictions don’t fall after Section 21 is abolished
  • Rents go up
  • There’s nowhere to rent.

I will try to explain why this will happen to those who refuse to listen to the potential consequences of why this law is going to be bad.

Not for fed-up landlords who will sell – hopefully avoiding the disastrous idea of increasing Capital Gains Tax next month – but for tenants who think their rights will be improved.

A public housing service

My first issue is that Labour, Shelter et al think that rental properties are a public housing service we should offer at a loss.

We can’t do that, and neither would you, without tax or financial help.

You may disagree with the fact we worked hard, got the cash together to invest in our future and build wealth for our family. That’s your point of view.

You may disagree with someone paying a landlord’s mortgage for a home but that’s a choice being made.

No one is forcing tenants to live in a landlord’s house, but you choose to punish us and undermine our ambitions.

Let’s face it, we need more social housing, but no one is building. No one has the money to add social housing to new build estates.

London has a plethora of ‘affordable’ homes for social housing providers, but they can’t afford to buy or run them.

Levelling the playing field

With the Renters’ Rights Bill not only are we not levelling the playing field between landlord and tenant, as Labour falsely claims, we are very much slanting the field in favour of renters.

You might think that’s a good thing. That’s your choice.

Landlords, however, will disagree because if we can’t get our property back then it’s pointless renting it out in the first place.

Labour seems to think that tenants should have the right to remain in their homes regardless – even if they aren’t paying rent?

When this law gains Royal Assent, Section 21 evictions will be banned.

I, for one, welcome this because landlords will have to state a reason when evicting.

That means we will finally get the data on how many tenants are being evicted for rent arrears, social misbehaviour or threatening a landlord.

It’s one thing promising a landlord’s database in the Bill but without a similar one for tenants who are evicted for wrongdoing then ALL tenants will pay the price as landlords use a higher bar when selecting a renter.

Difficult to get tenants out

We are stepping back to a time before the 1988 Housing Act when it was difficult to get tenants out. Labour wants those days back.

But the PRS wasn’t as big then and it was only after the law changed that landlords were relied upon to provide the housing that councils and government couldn’t or wouldn’t do.

The lack of investment in social housing is a massive problem but it hasn’t turned up overnight.

We haven’t built enough, we allowed people to buy public housing assets at a massive discount and have let millions of people into the country without investing in infrastructure.

You want to talk about affordable rents and lack of choice? Then discuss it with politicians.

Landlords also suffered when the Conservatives removed full mortgage interest tax relief for landlords with Section 24.

This, if anything, is what has really put the skids under the PRS.

Lots of landlords have had to bail out because they can’t make the numbers work so there are fewer homes to rent.

I know there will be many critics overjoyed at the prospect, but those rental homes are likely to have left the PRS.

Follow more than 160 laws

Increasing regulations – we must follow more than 160 laws (no one seems sure about the exact number!) – so it’s not an easy job.

We don’t just sit back counting the money every month having done nothing.

This is a time-intensive investment and when we get lumbered with bad tenants it becomes an expensive and stressful undertaking.

Not that I’m looking for sympathy but this notion that we need to level the playing field makes me chortle.

It’s already out of kilter – the courts are on the side of tenants because all landlords are grasping exploiters, right?

Critics don’t seem to realise that many small landlords are working class and are striving to put food on the table every day and create a pension pot.

We need to collaborate

The Renters’ Rights Bill underlines everything that is wrong with the perception of the PRS when we really need to collaborate.

We all need to work together instead of penalising landlords for having the ambition and energy to house people.

We need to help landlords to keep people in the PRS while building more social housing.

As usual, we are putting the cart before the horse and forcing landlords out without providing affordable social homes in their place.

I read often of people celebrating the demise of landlords who sell but I’m left wondering why people think like that.

There will, no doubt, be a rush of landlords wanting to sell before the Bill becomes law and I can’t blame them.

If the cards area already stacked against landlords, why would they stay around for this anti-landlord Bill to become law?

Landlords are committed to tenants

Most landlords are committed to their good tenants, but rolling tenancies, the right to keep a pet and more obstacles to possession won’t help.

You will find most landlords agree with tenant protection but then we are decent people – most of us have been renters.

These laws are targeted at criminal landlords who hurt us all, but they will still get away with it.

There won’t be inspections of their properties – and council staff facing hardened criminals won’t want to risk it.

A simple formula to help tenants isn’t to create a new law to force landlords out, we just need housing investment, fairer tax policies and regulations that don’t harm a landlord’s business.

And it is a business. I know critics don’t like to think of housing provision that way, but it’s the only way to describe it.

But most of all, we need collaboration. Just ask what we think for once about how the PRS can be more effective and how rents can be cheaper.

Don’t think that speaking to commercial landlord organisations is the route – let’s have an honest two-way debate about what’s wrong and what we can do to fix it.

Ultimately, we want to provide safe and comfortable homes to rent at a reasonable price. That doesn’t make us bad people.

Forcing landlords out and destroying the PRS will be welcomed by many but ask tenants how they feel with nowhere to rent, and prices are out of reach.

The Renters’ Rights Bill and the ongoing misinformation in the media about the PRS means it is tenants, ordinary people, who will be hurt.

Until next time,

The Landlord Crusader


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Comments

Cider Drinker

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10:14 AM, 13th September 2024, About 4 weeks ago

Excellent article LC. Word for word, you have hit the nail on the head.

I’m selling any that become vacant. One that I’m selling at the moment has doubled in value during my ownership. Despite this, CGT will be less than £4,000 due to the cost of refurbishing the property after the last tenant trashed it. You wouldn’t believe the damage that one tenant could do. Of course, the many, many hours that this retiree has spent fixing the house are unpaid. I’ve spent over 100 hours just travelling to and from the property.

Never again.

My money would have better invested in almost any other asset class, and without the stress and sleepless nights that I have endured over 15 years.

JaSam

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11:16 AM, 13th September 2024, About 4 weeks ago

Not sure I see what all the fuss is about. I have just read the "Guide to the Renters Rights Bill". My summary is that any extra cost in implementing this and risk will be priced into future rents. If they want more rights for tenants then its just simply priced in by landlords this is just basic risk vs reward. So the rents will go up over time.

My only concern so far is the new table for "Mandatory Grounds" of possession. Is rent arrears, at least 3 months then a 4 week notice period this needs to be stronger and fast tracked as it can be easily proved it should be the same as 7A "Landlords can begin proceedings immediately". My view is it should be at least 2months arrears and "Landlords can begin proceedings immediately".

As always the rest of the bill will be debated and I'll write to my local MP to give my input. See what the final bill will end up becoming.

Reluctant Landlord

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11:32 AM, 13th September 2024, About 4 weeks ago

Spot on LC!

I still have yet to hear a definitive answer on why any this is even necessary.

Is the government obsessed about the number of evictions only because it is adding to the council housing lists? As far as I can determine every single tenant reeled out on the TV/media being S21 evicted (due to an 'evil LL') seems to be a benefit recipient and ergo, if they are evicted the first stop is the council for rehousing.

Is this why the government is going hammer and nail on this - so it pushes the responsibility for housing these tenants as long as possible onto the private landlord so saving them money?

I get their (mad) thinking in a way- but at the same time, amending other legislation to then also make it more risky to take on ANY tenant at all seems completely ridiculous.

Do they not realise that attacking the PRS in this way will just mean even less benefit tenants will even have the opportunity to secure a tenancy at all? For a start, rents will increase and that will just blow affordability for those on state capped subsidies out of the water. There wont need to be a worry about benefit recipient 'discrimination' because they wont get past the basic affordability criteria before an application even progresses.

All this won't actually increase the numbers of rentals available either. Even if every single LL keeps every property they let now there is already a shortage of accommodation and what is there is occupied. Even if a LL evicts a tenant and replaces with another there is no overall 'gain' of a property in the market.
So is the 'bigger plan' is to increase availability by these amendments? If so then this fails at the first fence.

So what's left?

1. Repeal of S21 wont stop evictions, just make possession longer and more expensive for a LL. This will lead to higher rents all round at best and further impact on accommodation shortages at worst. LL and T both suffer.

2. Further amendments will also have a direct impact on L & T's - again higher rents and less accommodation. Benefit tenants will be hit the hardest of all being essentially priced out of market completely from Day One. The gap between market rent and LHA rates becomes wider.
(also no incentive to take on a benefit tenant if the rent arrears clause is now increased to 3 months because if on benefits this is paid a months in arrears so this means a benefit tenant has to be in arrears to a total of FOUR months in total arrears (not just their top ups! ) before you a S8 claim can be made)

3. ALL tenants will be subject to more rigid referencing. Guarantors will be practically a standard requirement before any tenancy is offered. Those who cannot provide one will be set aside over others who can (and ironically a LL may actually lower the rent as a result due to the lower risk to secure this more sought after tenant)

There is NOTHING that will stop evictions nor anything that will increase rentals available if any of this goes ahead. My feeling is let's see what happens next. The PRS has the upper hand here in reality, we hold the only accommodation available - we just need someone to head the NRLA that has the head of a unionist to go hell for leather and ram it home just what happen if they ignore the sector they know they are totally reliant on.

Julian Lloyd

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12:11 PM, 13th September 2024, About 4 weeks ago

NRLA are hopeless. They are a Gov Patsy. We need a union with teeth. And we should stand together and ensure rents are raised each year to market levels and that a guarantor is a must.
I’m still going to sell any that come free but will keep my good tenants who have been with me for years. Many for 12 years plus.

moneymanager

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12:27 PM, 13th September 2024, About 4 weeks ago

Some tenants will find it harder to get underwritten, we have often agreed s fixed term with prepayment where there is evidenced income in the UK such as HK immigrants or self financed students, the banning of fixed terms us our greatest concern.

LaLo

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12:52 PM, 13th September 2024, About 4 weeks ago

Question:- when is the renters rights bill expected to become law? I believe it has to go through Parliament but it could be ‘fast tracked!

Reluctant Landlord

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13:35 PM, 13th September 2024, About 4 weeks ago

Reply to the comment left by Julian Lloyd at 13/09/2024 - 12:11
for those LL that have long standing tenants there will be less to worry about (in the scale of things). Even keeping the rent at market rate will ensure they stay on, simply because it will be difficult to move anywhere else.

The biggest issue I suspect is for LL's when the existing tenant moves on. You may have no difficulty in applicants, but major issues sorting the wheat from the chaff - the focus will be trying to secure the less risky tenant above all else. It's not just about the new tenant meeting the financial requirement anymore to let to them, it's working out the risk if you need to remove them.

Letting properties as a private landlord is going to be a very, very selective process. The government have now drawn a very political line in the sand.

Battle imminent, with tenants being the biggest casualties. Labour, you have the blood of renters on your hands!

LaLo

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13:56 PM, 13th September 2024, About 4 weeks ago

So, due to S21 going plus many other regs that have come in, many LLs sell up losing their rental income, many tenants lose their accommodation adding to homelessness. This can’t be real - I must have got wrong!

Stella

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14:04 PM, 13th September 2024, About 4 weeks ago

Reply to the comment left by JaSam at 13/09/2024 - 11:16
There is plenty not to like that is unfair in this bill.
For example if we have a tenant who does not pay the rent we would have to wait 3 months before we could take action with no ground for persistant rent arrears then there is the get out of jail card for the tenant "the hardship clause"

No mandatory ground for possession if we need to sell up and retire even if we are 100 years old.

These are just a few!

Gromit

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14:44 PM, 13th September 2024, About 4 weeks ago

Reply to the comment left by Reluctant Landlord at 13/09/2024 - 11:32
I agree with all your points. But evictions will initally drop due the longer time that it'll take to process evictions once S.21 goes, then it'll go back to current levels.

I've no doubt the Government, Shelter, Generation Rent et al will be shouting the success of this measure from the rooftops and how they've given those bad/nasty Landlords a bloodied nose. Then when evctions get back to normal levels it all be quietly forgotten.

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