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MPs want tax review and courts reform - NRLA approves

The landlords’ trade body is broadly welcoming some proposals from MPs to reform the private rented sector.

Some aspects of the Levelling Up, Housing and Communities Select Committee’s report  have emphasised points already made by the National Residential Landlords Association.

In its report the committee warns that: “It is not clear whether the Government fully appreciates the extent to which an unreformed courts system could undermine its tenancy reforms.”

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Whilst the report calls for the development of a specialist housing court, it sets out how, at the very least, measures are needed to considerably speed the time it takes for the courts to process legitimate possession cases. 

Specifically, it states how matters relating to rent arears or anti-social behaviour require a swift response from the courts.

The committee report concludes that all forms of anti-social behaviour by tenants should be a mandatory ground for possession even if a criminal conviction has not been made. Suitable guidance for the courts should be developed to ensure such cases are dealt with swiftly and with certainty about the outcome.

It also says tenancies should be exempt from plans to make every tenancy open ended.  It warns that the Government’s current plans “could make letting to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies.”

And it says that “the most serious challenge currently facing many private renters is neither security of tenure nor housing conditions, but the high cost of renting caused by the housing crisis.”  

Mirroring the NRLA’s calls ahead of the Budget, the Committee recognises the value of private landlords by calling on the Government to “review the impact of recent tax changes in the buy-to-let market with a view to making changes that make it more financially attractive to smaller landlords.”

Chris Norris, Policy Director for the National Residential Landlords Association, says: “The NRLA has never been against reform of the sector, but it has to be fair and workable for both tenants and landlords. 

“That is why the committee is right to call for court reform to underpin the ending of Section 21, changes in plans for student tenancies and ensuring cases of anti-social behaviour are prioritised by the courts.

“As the committee rightly notes, the biggest challenge faced by many renters is that there are not enough homes to rent. All the protections in the world will mean nothing for tenants if the homes are not there in the first place.  

“That’s why the government should accept the committee and the NRLA’s call for a full review of the impact of recent tax changes in the sector.” 

However the committee’s recommendations are by no means all to landlords’ liking.

The government’s proposed tenancy reforms - including the banning of section 21 evictions - could be undermined by delays in the court system, says the cross-party report.

The committee’s Reforming The Private Rented Sector report expresses concerns that the government’s White Paper - delivered back in June last year - may have a negative impact on the student private rental sector market and highlights what it sees as the threat to the sector of the rise in holiday-lets.

The report warns that the government’s proposed ‘sales and occupations’ grounds for eviction, outlined in the White Paper, could be “too easily exploited by bad landlords and become a backdoor to no-fault evictions”. 

The committee recommends a series of changes to the sales and occupation grounds to help combat what it calls “unfair eviction and insecurity of tenure.”

The report welcomes the government’s plans to introduce a legally binding decent homes standard but points to a series of obstacles threatening the ability of local councils to enforce the standard, including precarious local government finances, shortage of qualified enforcement staff, and a lack of reliable data.

The report recommends the government introduce a tougher civil penalties regime in the proposed renters reform bill to ensure councils have the capability to collect financial penalties on landlords who breach standards.

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    Cris Norris. Come off it cop yourself on creating more Discrimination and Division.
    What you are doing is going along with the idea that not EVERY Tenancy should be open ended. Change that proposed Amendment Immediately to ANY Tenancy should not be open ended.
    What you are doing is bringing about a situation where Landlords will only let to Students and that is happening already, they are making Students Blocks exempt from many rules.
    There’s been far too many concessions for Students already and we are subsidising them not least having housing with free C/tax, while working tax paying Tenants paying full c/tax next door.
    What has happened is unbelievable by Mr Michael Gove with hit stupid White Paper, up set the whole market, caused thousands of landlords to leave and sell, created a shortage, as a consequence drove Rents through the Roof,
    Caused thousands of unnecessary Evictions, suffering at upheaval, not least Homelessness and unaffordable Housing, need I go on ? when all they needed to do was nothing and not cause the Crisis.
    M Foley NRLA member.

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    That's what has happened in Scotland.

    Students are now the preferred tenants as they do move on and rents can be brought up to market rates on the new tenancy agreement.

    Incidentally students don't get fixed term tenancies in Scotland but the market works as if they do. A clear message that the market should be left to run itself.

    The losers are families and those students who used to be lucky enough to rent flats in Edinburgh and St Andrews which used to be let on 8 or 9 month student lets quickly refurbished and let to tourists over the summer. Many of these city centre flats are now full-time short term rentals, because they can't have fixed term tenancies any more, adding further to the overall shortage of rental properties and pushing students out into residential areas suiting neither the students nor their neighbours!

    Recent statistics show only 26,000 out of over 4 million rental properties had so called no fault evictions last year.

    It seems that the needs or misdeeds of a tiny% are forcing unwanted and harmful consequences on the vast majority, which is unfortunately too silent!

     
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    Who thinks that when s21 goes south that the courts will be clear and reformed 😂👎🏻If you have dodgy tenants get rid of them now.

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    Exactly. I have one dodgy tenant. I've done my S21 now for exactly what you said. I don't trust these morons to abolish S21 first and then start looking at reforming the courts.

    I must say I'm relieved that there is not a mass increase in the numbers of S21s issued! I was worried I'd be in a long queue.

     
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    Beautifully said, Michael “ when all they needed to do, was nothing and not cause the crisis”. Competition, would do more to improve the market than anything else. Now due to the shortage landlords, can let crap properties at high rents. We are going back to the 90s.

    The Labour Party destroyed the private sector. Before the war 90% of tenants were private by 1950. It dropped below 8%, and that when there was a major housing crisis due to lack of building during the war and German bombing. we are going the same way

    Jim Haliburton,
    The HMO, daddy

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    My wish list would be:
    Abolish Section 24. Tax landlords in the same way as EVERY other business in the UK. Contrary to popular belief most of us aren't greedy people and often choose to charge below market rent to good long term tenants. Section 24 and massively increased interest rates mean rent increases are going to have to be eyewatering over the next couple of years. Even with significant rent increases our actual profit will drop.

    Review CGT. Restore taper relief or introduce indexation relief. Many countries have zero CGT after so many years of ownership. Taxing a capital gain at 28% on an asset that has already generated vast amounts of tax revenue for the government over our years of ownership is obscene. We pay huge amounts of VAT on just about everything connected to our ownership of our BTLs plus much higher income tax (due to our unique Section 24 taxation). In order to make BTL attractive to future landlords there needs to be a clear exit route. Right now we have the situation of taking risks of ownership, pay eyewatering amounts of mortgage interest, VAT and income tax, lose 28% of any gain (even though most of it is purely down to inflation), die before the money has been spent or distributed and pay another 40% IHT. How is that in any way attractive to any potential new landlords? They can get better returns with far less work and stress investing in numerous other things. Introducing zero CGT after initially 30 years of ownership (dropping to 25 years within 10 years) would be a game changer. It would incentivize some us to stay and do our 30 years instead of selling at the earliest opportunity. It would encourage new landlords into the industry or existing ones to expand. It would allow some of us to take our gain and retire. That would generate loads of SDLT, VAT, etc.
    It would release a steady stream of properties onto the market so wouldn't destabilise anything.

    Make any eco improvements tax deductible in the year of installation instead of treating them as a capital improvement.

    Make Section 8 fit for purpose so all at fault evictions go that route. Only after that has happened can anyone assess how many genuinely blameless tenants are evicted. It may well be a very small number. Personally I would prefer to keep Section 21 as it works and gives landlords the confidence to let to less than gold plated tenants. However, I do think that genuinely blameless tenants who have conducted their tenancy impeccably should be compensated in the unlikely event the landlord needs to evict them. Let's face it no one evicts a good tenant unless they really have to. The overwhelming majority of tenancies are ended by the tenant. They get a new job, new partner, buy a house or die. The only reasons we would want to evict a good tenant would be to gain some personal benefit. Maybe to sell the house or to minimize our stress or workload if we had a health scare. If it costs us 2 months rent as compensation for the tenant to leave within the 2 months notice period on the Section 21 wouldn't that be better than having to wait for a court date and all the stress that goes with that?

    If we can have some revisions on our tax treatment surely a mutually beneficial solution could be found for Section 21. We need to get away from the media and activists Rich, grasping, uncaring landlord - Poor, downtrodden, exploited tenant narrative. In reality tenants often earn far more than their landlords. Many of them are better educated than some of us. So let's introduce some fairness into the system and stop regarding landlords as some bottomless pit for the government to pilfer at will. The only people replenishing that pit are tenants.

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    Immigration is the problem, and politicians are trying very hard to find a scapegoat to deflect criticism away from open borders !

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    Exactly! It would be far easier to prevent an illegal entrant than to have to build him a house!!

     
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    Exactly, but it’s a truth that is never spoken 🤔 sadly.

     
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    In my local paper this morning '' council buying 24 new build houses'', many of the comments are asking who they will be renting them to, local British working families ? or none working scrounging immigrants? locally we all know the answer to that one .

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    Now if they had not sold off the last 24 council houses… at a heavy discount… they would be no need to buy those new builds 🤔🤔

     
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    Wales has a refugee sanctuary policy and the demographics are rapidly changing. Apparently they need to destroy the PRS sector so these people can be housed .

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    9 MONTHS to ONE YEAR for a Possession Process
    (appears all tenants are given 5 months more, to appeal, if they ask)
    COURT SAYS IT AIMS TO OPEN AN EMAIL
    OR LETTER WITHIN 80 DAYS
    (delay increasing)
    GET OUT : BEFORE THEY REALLY START TO HURT LANDLORDS
    DON'T MOAN LATER... 'THE WRITING WASN'T ON THE WALL'

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