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TODAY'S OTHER NEWS

The Tories are chasing the tenant vote, but what about landlords?

Given that the number of people living in private rented accommodation has grown, doubling in the past three decades, renters are now a political force that the main parties can no longer ignore - so it is no surprise that they are starting to take the renting crisis seriously, with politicians in agreement that the rental system needs improving. 

From the introduction of a ‘lifetime’ deposit that moves with a tenant to scrapping Section 21 notices to encourage greater security of tenure, there was a wide range of policies proposed ahead of the recent general election that will affect buy-to-let landlords. 

Given that just 31% of private renters voted Conservative at the last election, with 46% voting Labour, ministers are unsurprisingly looking to affirm the government’s pro-tenant credentials. 

The government has already unveiled its Renters’ Reform Bill, announced plans to encourage landlords to accept tenants with pets, lifted the housing allowance freeze and made fresh funds available to clampdown on rogue landlords. 

But David Smith, policy director for the Residential Landlords Association (RLA), is concerned that while the Tories are ‘courting renters’, they are simply ignoring landlords and the need to offer them a ‘helping hand, too’. 

Writing in the Telegraph, Smith says “the government’s approach to the sector remains inconsistent”. 

He argues that while ministers want to encourage the development of long-term tenancies, the tax system “is making short-term holiday lets more attractive than providing long-term homes to rent”.

He adds that the Ministry of Justice has ‘failed to provide any concrete proposals’ when it comes to changing the way landlords can repossess properties, with “considerable improvements to the court system” still needed, “a year after its consultation on this issue closed”.

Smith also points out that the government has failed to introduce tax incentives to “encourage pro-active energy upgrades”, despite wanting to see all rental properties become more energy efficient. 

He believes that initiatives for the rented sector are being developed “without any reference to other departments and with no clear idea about where Whitehall, collectively, wants to take the sector”. 

“It has led to a hotchpotch of one-off initiatives which often work in opposition to one another,” he adds. 

Smith is calling for a “common vision across government that recognises that the private rented sector has a vital contribution to make to housing the nation”.

He goes on: “We need a cross-government strategy for the sector, one which supports good landlords to provide the homes to rent we need, which improves enforcement against the minority of landlords who are criminals, which ensures the benefit system has the confidence both of tenants and landlords and which uses taxation to support positive choices made by landlords.

“A government with a strong majority provides the opportunity for coherent thinking. It is time to seize on this, end the piecemeal approach to rented housing and provide a positive vision that all departments can get behind.”

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    I'm not sure if I understand what this article is getting at. "The Tories are ‘courting renters’, they are simply ignoring landlords and the need to offer them a helping hand, too". Who needs the helping hand generally at this time of housing shortage and homelessness? - the hard-pressed tenants paying very high rents generally who usually just has a year's security in the property? - or the landlords for whom the property is a second (or third etc.) home and who can always evict the tenant even within the year in case of non-payment of rent, etc. It's actually quite nice to see a Conservative government adjust the balance in favour of tenants.

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    The helping hand I would like is to be able to evict non paying rouge tenants within 2 months, until I get that (and I'm not holding my breath) I will not consider benefit claimants, single moms or people under 25, I far from alone here, so this isn't helping vulnerable tenants is it ?

     
    James B

    The point of the article is it’s all well and good hammering landlords for the benefit of tenants and vote winning, but if this causes landlords to walk and supply drop / rents rise then this is counter productive on tenants yes
    Balance needs applied to both sides so this doesn’t backfire on who it’s intended to help

     
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    DW. Decent tenants can stay as long as they want to. No business turns away paying customers or pays for alternative customers to replace good customers who want to continue giving their custom. What people like you fail to see is that you're actually stopping decent tenants from getting homes by protecting wasters who stop paying rent and deprive the landlords of the rent they are entitled to charge and deprive other tenants of decent homes.

     
  • David Lester

    Maybe the Government and Tenants wake-up and realise that Landlords who invest their money in providing homes to rent, are a business not a charity!!

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    Shelter is a charity, but are they providing homes, are they helping vulnerable tenants, NO they are just making things worse for the very people they claim to be there for.

     
  • Nigel Nigel Spalding

    Increases in landlord taxes = increases in rents. This is now happening I am afraid - blame the government for being so nasty too landlords that are now selling and cashing in. They don’t have to use their hard earned money to buy property to let - they can use it in anyway they like.

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    Smith is calling for a “common vision across government...…" Well there is no chance of this ever happening. You just need to watch a short clip from the House of Commons and there is absolutely no way on this planet that there will ever, ever be a "common vision".
    We are all wasting time and energy we will need in our old age trying to get the bunch of idiots running this country to listen to us and our common sense ideas and logic to fix the broken housing system, there is no money in it for them so why should they bother.

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    • S S
    • 18 February 2020 10:48 AM

    The article is suggesting that if you want to implement legislation in favour of the tenant (some reforms which I am happy with) you also need to ensure that the supply side works too. As has be said - tax reforms that simply encourage the LL out of the PRS will NOT result in a supply of properties available for long term security. Why bother with long term tenants when for many LL more money and less regulation can be found in the short term market. When there are the occasions that a LL requires a property back for legitimate reasons (we currently have an ongoing case) the LL needs security that he can get the property. Our LL informed the tenant 3 months ago that their daughter needed the property having returned from abroad. Correct notice was served 2 months ago. The tenant has simply just not moved out. The LL has done nothing wrong, tried to give the tenant as much notice as they could beyond that required by law. The tenant now is simply not moving so the LL only recourse is a long and expensive court process. The LL has said they will not rent the property again - another property lost to the market because of a difficult tenant and an unhelpful process. Both sides of the market need to balance for the market to work effectively and efficiently. The trouble is that Governments want to win voters with BIG headlines without really understanding the business behind it.

  • Matthew Payne

    The problem with politicians in their attempts to assist a certain part of society to buy their votes at the ballot box is that they often interfere in a very disjointed way in markets they know nothing about, strangely ignoring all the learned council from those that do. No one is grumbling about anyone’s desire to help solving the housing crisis or protecting tenants’ rights, far from it, but the attempts of the last few years have been so painfully misplaced.

    Wealth creation, and I include a tenants right to an index linked affordable rent, reasonable fees, an affordable property to buy is not achieved by punishing those that supply that housing stock or services around it, no different to taxing job creators or the highest tax payers at 50%. As Tories know only too well, you tax too high, people avoid paying the tax or leave just as Landlords are starting to do in the last 12 months. Anyone celebrating this fact though or regard it as progress, like the government, simply doesn’t understand the mechanics of the PRS.

    Pretty much every attempt to assist these tenants has unfortunately and perversely backfired. Cap deposits, ban end of tenancy commitments? Families with pets and young children, younger tenants under 25 now have less choice and have to pay a higher rent as predicted, but who expected any other outcome? Ban tenant fees? Tenants are now paying new different fees with zero security deposit options as lettings agencies seek to survive having lost their entire profit margin overnight. Becasue of both, landlords are already selecting only the very best calibre tenants who represent the lowest risk, who pretty much had their choice of any property anyway and didn’t need any help from the government.

    Higher taxes mean the PRS is shrinking. Less property, less choice, higher rents. What did the government expect? We have already seen a 3-6% increase in 2019 in most parts of the UK. Most are predicting similar again this year. Ban the use of section 21? That elitist selection of the very best tenants will get even worse for the landlords that remain and with others selling, the millions of tenants that need somewhere to live will have to pay higher rents, won’t have the choice they have now, and whose costs to commute to work, and childcare for example will increase as they have to move further afield. All that will happen is a minority of tenants will have improved security, the majority will be worse off.

    90% of section 21s are served by tenants. However, we will see an enormous spike in Landlord served Section 21s before the legislation comes into effect and potentially tens of thousands of tenants who like their landlord were perfectly happy with the status quo where they lived will be forced to look for somewhere new to live at a much higher rent as landlords play musical chairs. Some won’t find anywhere they can afford.

    No wonder quite a few tenants are now already starting to wish that things could go back to the way things were, and the worst is still yet to come.

  • Suzy OShea

    Whenever governments interfere, its bad news for that sector. and since we are now governed by av owed criminal clowns, chaos is all that one can expect.

  • Mark Wilson

    Every market has its day, and this market has had its day. Why do readers of this site expect any concessions from Government so they can improve their profit margin?

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    In most cases the tenants end up paying for any increase in Landlords' costs, which is as it should be. Where the landlord can't recoup the extra costs then the short term rental market will provide higher returns. This reduces the amount of homes available to rent and leads to higher rents through normal market forces. Look at the 30% increase in rents in Scotland since the SNP introduced its crazy new PRs legislation in December 2017. Only the rent dodging rogue tenants win out of such anti decent tenant legislation, but it seems most SNP supporters are too thick to see what has happened and understand why. England should take note and not repeat these mistakes. Similar crazy legislation in Ireland, now repealed, has led to the rise of the loony lefty IRA/Sinn Fein terrorists potentially toppling the two centre ground parties.

     
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    Hi Mark, so you think it's all about profit margins, spare a thought for those LL's trying to keep their head above water while being attacked from all angles.

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    How some of our readers can think we are greedy or only want to increase profit margins is beyond me and certainly not true, as our regular contributor in Scotland enlightens us as to the scale of charges in different parts of UK by comparison £ for £. The myth that London rents are too expensive can be put to bed. I see that a large House in parts of Scotland can command a rents of £25K pa, compared to Houses I have in west L'don with similar rents but the property will cost you 3 times as much to buy for sure so anyone that thinks we are only concerned about profit margins can think again, perhaps I should consider a rent review tomorrow.

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    Michael

    I think you are probably underestimating the returns in Scotland currently. A nice flat in Glasgow West End with an HMO licence for 5 students can get £30,000 per annum rent and be bought for around £300k, so yielding around 10% gross. With many Scottish landlords wanting out, it's also pretty much of a buyer's market currently. Thanks SNP - glad most of your supporters are too thick to see the consequences of your so-called progressive policies!

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