In June, the government finally released its long-awaited White Paper ‘A Fairer Private Rented Sector’. You will almost certainly have seen the main points of this, some of which include the introduction of an Ombudsman for the private rented sector, a Property Portal, the requirement to meet the Decent Homes Standard and, most crucially, the abolition of Section 21.
Having digested all 86 pages of the White Paper, I think it is important to note that very little of what was included was unexpected and some is common sense relating to raising standards. However, some elements will not sit comfortably with landlords. I too have reservations, particularly over the removal of fixed-term tenancies, but I think we must remember this the White Paper, and the final Bill is yet to be passed.
Sadly, I know from speaking to landlords up and down the country over the last month that for some, this string of new planned policies is the final straw.
One landlord, who started investing some 30 years ago when the government was urging investors to put their money in property, told me he feels let down by policies which seem geared towards eradicating private landlords. Having built and managed a modest portfolio of properties, he has concerns that he will lose control of his own investments. I think it is a sentiment that that will be echoed by many landlords who have invested their hard-earned money in property, making repairs and refurbishments, to essentially feel like they will be handing the keys over to someone, who can return them as and when they like.
Another landlord who lets to university students told me he intends to sell up because the new plans, which transition all fixed-term tenancies to periodic tenancies, mean it will become impossible for him to guarantee that his tenants will leave at the end of the academic year. That means he would be unable to market his property in time for the following year’s student intake. Whilst some may think this is not a problem since there would be no void period, if those students then decide to leave halfway through the following term, the landlord could be left struggling to fill the property, as students secure their accommodation prior to the start of the academic year.
However, other landlords are taking a pragmatic approach and looking at how they can do things differently. A few weeks ago, I was booked by East Riding Council in Hull to speak to a large group of landlords. One landlord of 25 years, who has a portfolio of 30 properties, told me that he wishes to continue being a landlord but recognises that, with the raft of new and existing legislation and obligations, he needs the support of a letting agent to ensure he is compliant and to keep on top of the daily tasks. I believe this is the most reliable and sensible approach for landlords who are time-poor.
With the Conservatives grappling to find a new leader, I think it is unlikely that the final Bill will pass before the end of next year, meaning there is still time to influence change. Whilst I’m not suggesting that there is likely to be a U-turn on any of the elements which have been included, I do believe landlords’ collective voices have an opportunity to show the government what will and won’t work. We must be clear about what grounds and incentives are needed to encourage landlords to remain in the market, ensuring there is a consistently sufficient supply of rental properties in the future.
At Landlord Action we work closely with the Government, providing advice on the private rented sector to help inform future legislation. Following the release of the White Paper on rental reform, we know the government is interested in hearing feedback from landlords on their reasons for serving a Section 21 notice. This information will be essential in reforming grounds for possession under Section 8, of which we believe there will be nine, making sure that landlords have effective means to get their property back when necessary, once Section 21 is abolished.
A couple of weeks ago, together with several other industry leaders and letting agents, I was invited to join a Zoom call with a group of civil servants who are part of the team tasked with implementing the Renters Reform Bill to ensure it is practical and workable. They were keen to hear from Landlord Action’s point of view as to why landlords typically use Section 21. I think all those who attended made it very clear that there are some unintended consequences on the horizon and landlords are already leaving the market.
We also discussed the concerns and complexities about plans to scrap fixed-term tenancies in place of periodic tenancies, particularly within the student accommodation market, where Purpose Built Student Accommodation will be exempt. I feel confident that they are listening and at this time it is crucial we engage.
Furthermore, we know that landlords are sometimes denied access to their property by their tenant, for example, to carry out gas safety inspections. Whilst all tenants have the right to quiet enjoyment of a property, landlords also have an obligation to maintain and repair properties. In addition to access for repairs, the landlord also has a right to view the condition of a property after giving the tenant a minimum of 24 hours’ notice in writing.
This is often impossible when tenants will not allow landlords access. We are therefore putting forward the case for introducing a discretionary ground for possession of unreasonably refusing the landlord access for inspections. This would help give landlords the necessary authority when requesting access.
We have put together a short survey on the government’s plans to abolish Section 21 ‘no fault’ evictions. The survey also asks landlords if they have ever had problems gaining access to a rented property to undertake key safety and regulatory checks such as completing gas or electrical safety checks. We would welcome your feedback as part of our research to feedback to Government.
Complete the survey here: https://www.surveymonkey.co.uk/r/landlord_action_survey
We, the landlord and letting agent community, must try and shape how these changes will work in practice. Let’s remember, these are proposals, they are not set in stone yet.
* Paul Shamplina is founder of Landlord Action, Chief Commercial Officer at Hamilton Fraser, and is on Channel 5's "Nightmare Tenants, Slum Landlords” *
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