NRLA’s Ben Beadle reveals the rental sector’s biggest challenges

Ben Beadle says:

“Our data suggests that most landlords can envisage operating without Section 21, but only if the courts are reformed and sufficiently resourced to provide certainty of possession if or when it is needed."

That is not what history shows. Most landlords do NOT operate a business when tenants have security of tenure.

The NRLA should be examining the historical data prior to the introduction of Section 21. That is where the true information lies. Looking back to 2010 does not throw any light on that key issue.

• John Adams
• 21 October 2023 10:48 AM

Ben's frankly out of his depth and the various delusional groups run rings around him.

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• Andrew townshend
• 21 October 2023 11:30 AM

I t would seem you are right there John

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Ben Beadle focuses on student lets, but what about all the other forms of letting which demand a fixed term contract e.g. when landlords let to visiting doctors and academics from overseas or from other parts of Britain.

While I have great sympathy with landlords who are struggling with their mortgages, Section 24 is not the only tax issue. Many of us would like the 10% wear and tear allowance reinstated, particularly those of us who do repairs and maintenance on the properties ourselves. Capital gains tax reducing to zero at retirement age would also allow landlords to retire.

• Jo Westlake
• 21 October 2023 14:31 PM

Which retirement age? There are many different retirement ages depending on which year you were born and whether you're talking state pension or actually ceasing work.
Most countries that have taper relief use years of ownership as the basis as that is completely transparent and unambiguous.
It also means long term landlords don't get unduly penalised.
Without taper relief of some description why would any young person become a landlord? There are far more tax efficient ways to invest money these days. Taper relief was a key part of the investment decisions of those of us who entered the PRS in the early days or before modern BTL was born.

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• Ellie Edwards
• 21 October 2023 14:46 PM

The state retirement age at the time that you wish to sell. It is 66 at the moment.

If you introduce tapering it greatly increases the lock-in effect during the period of taper. Apparently this was the rate of tapering in 1998:

Holding period in years and % of gain chargeable

0 100%
1 92.5%
2. 85%
3. 77.5%
4. 70%
5. 62.5%
6. 55%
7. 47.5%
8 40%
9 32.5%
10 25%

However, if the taper reduced quickly and ended with a 0% of tax it would be much more acceptable.

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• Jo Westlake
• 21 October 2023 16:00 PM

Ellie - 66 is still several years away for me and yet I have already owned some of my houses for well over 20 years and one of them for 32 years.
I would be much more in favour of tapering to zero after 25 years of ownership.
There is usually less of a gain to be taxed on after shorter periods of ownership anyway. It's those of us who have spent virtually our entire adult life in the industry who are particularly hammered under the current system. We have been denied the tax relief everyone else enjoys from investing in a SIPP and then face losing a couple of bedrooms worth of value per house should we sell up.

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• Ellie Edwards
• 21 October 2023 16:14 PM

The problem is that many landlords are considering selling NOW because they can't live with the Renters Reform legislation. In some of those cases, a long period of tapering could be more of a stick than a carrot.

Also how old is too old to be a landlord with all the onerous demands in that legislation? My father carried on as a landlord until his ninetieth year, responding quickly to all repair issues until days before he died, but I am not sure if he could have coped with unjustified claims through an Ombudsman - too much stress for a very elderly person. Perhaps too much stress for a younger elderly person? How likely are they to have a heart attack or stroke? The majority of landlords are aged over 55 and there are many thousands aged over 75.

Incidentally, there used to be retirement relief in the UK. It is not uncommon for people to sell off part of their business when they retire. Retirement relief used to be available to diminish the impact of capital gains tax on the disposal. Relief was given to individuals who were aged just 50 or over (or who retired earlier on ill health grounds).

Full relief was given if the necessary conditions had been satisfied throughout a period of 10 years. There was a pro rata reduction in the amount of the relief for people who had held the asset for less than 10 years.

I don't think that the taper has ever existed for a duration of 25 years. Most people would view that as far too long. In 2000 the Government cut the taper period to four years for all business assets, as follows:

Period asset held (years) Percentage of gain chargeable (%)
0-1 100
1-2 87.5
2-3 75
3-4 50
>4 25

In the April 2002 Budget the Government announced that the minimum holding period for business assets to attract the maximum 75% taper would be two years, not four.

The Labour Party under Gordon Brown abolished taper relief in April 2008. The reason for its abolition was the cost. The 2008 budget estimated its cost to be £6.3 billion in 2006-07, rising to £7.2 billion in 2007-08.

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He’s out of his depth, there is no way the courts will be reformed that quick, landlords are in trouble when we lose s21, and it will happen quickly. What a mess. 😨

• Andrew townshend
• 21 October 2023 11:32 AM

And add a labour government to that and private letting will become a nightmare

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I can well understand why landlords aren't using the big national agents, but the smaller local agents normaly give a very good service and are well worth their fees.

• Annoyed Landlord
• 21 October 2023 11:36 AM

Well said, Andrew. After being pestered by LRG, never been a client of theirs and now never will, I much prefer dealing with my local independent.

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• William Williams
• 28 October 2023 10:43 AM

I must be quite lucky. As I live in Cyprus it is essential I have an agent to manage properties. The small agent I have in Wales only has 2 staff in the rental department with years of experience. They handle everything thrown at them as true professionals. Meanwhile the agent I had in Manchester was staffed by post graduate amateurs learning on the job and they did not have a clue. When my last tenants left they arranged to clean the property then posted all the keys through the letterbox. despite instructions to leave them with the concierge, fortunately I had my own spare. I have no intention of ever letting the property again and now keep the property vacant and use it during my visits to the UK.

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Ben says “The NRLA is the voice of private residential landlords".....Really Ben?
You might be the voice ,but you are definitely not the ears.
When it is unanimous that Landlords DO NOT want Section 21 to be abolished, you are cosying up to Gov't and agreeing with them about Section 21 being removed.
If you truly are for the NRLA's members (of which I am one), you need to speak less and listen more to those that pay your bills.
It's about time that the NRLA start sending out surveys and for important decisions allow us to have a vote on decisions regarding crucial issues like the removal of section 21.
As far as I know there was no consultation among members regarding this, and it has now become one of the main reasons for Landlords to leave this sector (and membership of the NRLA).
Start engaging with NRLA members Ben before you single-handedly make which decisions which affect US.

Who’s Business is it anyway who are all those lame ducks making rules for us.
Now its going to be different rules depending on who you let to. The Landlord owns the property and it should be his decision who he lets to and under his conditions, not making more divisions playing one off against the other.
Just scrap the Stupid Bill that
was never required in the first place done so much damage already. Let the Big Boys play by the same rules as us.

Ben beadle is saying landlords can envisage operating without section 21 Providing the court system is amended.
This fella (our main representative) needs to be adamantly opposed to the removal of section 21 watch how many good tenants go rogue once S21 is abolished.
This man’s name should be Jeremy beadle he’s done nothing for us he just comes out and informs us that the bad news isn’t actually a joke and that the government are imposing even more legislation on the already struggling PRS.
Benny Beadle and the NRLA are a joke!

Section 21 is proven and works after a fashion. Let's not pretend it's perfect though. If a tenant leaves within the 2 month notice period great, happy days. However, if they can't find anywhere or are advised to stay put it isn't exactly quick for the rest of the procedure to trundle along.
Also why should some of them benefit from all the perks that go with Section 21? In many cases they are being evicted because they have breached the tenancy in some way. Landlords only favour Section 21 because it is guaranteed. If Section 8 was equally reliable it would have always been the preferred option as it doesn't reward bad behaviour.
Once a reliable quick eviction route for breach of tenancy is tried and tested over a reasonable time period it may be time to re-examine Section 21.

• Ellie Edwards
• 21 October 2023 14:38 PM

Not all landlords let indefinitely though; some let on a fixed term basis to tenants who are staying for a fixed term.

The other issue is that Section 8 used to exist without Section 21 and the private rental sector was very small. I don't think there were the court backlogs as there are today either. The majority of landlords didn't want to let if tenants acquired security of tenure.

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The Government has caused all the problems we are all now facing.
It started with Osborne and section 24. Osborne was aware it would cause an housing shortage because it had to been tried in Ireland and was a disaster.
The removal of 10% wear and tear allowance.
Constant unnecessary changes of Regulations
Manipulation of selective Licence regulations.
And now an increase in Interest Rates.
Now many of us are being forced to sell up , they increase the amount of Capital Gains Tax we have to pay.
I agree with Ray, The NRLA need to be consulting with us not only by surveys but how we can get our message across. Not just at National level but local.
The Housing Select Committee must realise the RRB will be a disaster .

Ben Beadle, Michael Gove, Shelter and Generation Rent etc can try as they may to dress up the Renters Reform Bill but the bottom line is " No Section 21 equals No properties to let".

Section 21 was far from perfect and always costs thousands to go to Court just imagine we can’t even have that.
All They needed to do was Remove the right to be Rehoused by the Council’s, just how many used that Scam to get housed by Council and sometimes jumped the queue, a small amending was all that was needed there.
Indefinite Tenancies are Sitting Tenants totally unacceptable.
Long Term Tenancies only by Agreement between the Parties and not as of a Right.
Some landlords have interest only Mortgage’s and not a lot of skin in the game, for them long term Tenants might suit especially when they have Benefit Tenants milking the System blind regular income take your percentage off the top as you go, them Tenants won’t be going anywhere.
This is the main reason why Council wants S.21 scrapped. Why else would they have been telling Tenants to stay put until ordered by the Court, and the reason why Courts were reluctant to grant possession thinking up any excuse to knock you back. Simply because Council’s they don’t want them so it’s not Landlords fault at all just fake News.

Prepare for a long post! On 20 Sep 23 I emailed Chris Norris and Ben Beadle NRLA and challenged them on their representation of the PRS by the NRLA. I passed their response received I believe on 29 Sep to Graham Norwood author of many of the articles on this site a few days ago asking him to use the post but did not receive a reply and this site have not used the info. Interestingly the article above was posted shortly afterwards (instead?). I feel my original email plus his reply would be too long to post so have just put a summary of my email together with his full reply below - I found it very interesting to note he says that NRLA members were surveyed yet I am seeing many members on here who say they have NEVER been approached for their opinions on RRB or S21. I wonder how widespread any alleged survey really was.

So the essence of what I raised with Mr Beadle/Norris was:
================================================================================
I am emailing to let you know that the Facebook Goup Landlord to Landlord and prior to that Property Tribes have raised issues with the fact that you are not representing the views of the majority of Landlords.

This is what was written about you yesterday on landlord to landlord
"I've just found out how useless the NRLA is.

Chris Norris, who's the policy director of the NRLA, was on Mondays (18th Sept) edition of You and Yours on Radio 4 and I was horrified when he told the presenter that he didn't think many Landlords were selling up because of the Renters Reform Bill, so I for one will not be renewing my subscription with them again.

Are there any of the Landlords associations that are actually doing their job properly, or are we just there to pay their salaries."

I was appalled to learn that you Mr Norris went on air on Radio 4 and actually said this. You should also know that the majority of Landlords are horrified that you are not opposing the abolition of S21. I would ask how you could possibly arrive at that conclusion? "
================================================================================
AND THE RESPONSE I RECEIVED WAS AS FOLLOWS

Thank you for your email of last week.

Clearly, you have very strong views over the effectiveness of our work but I thank you for giving me the opportunity to address them.

We are acutely aware that the Renters’ Reform Bill is affecting confidence in the sector. The point that my colleague Chris made to radio 4 is that the RRB is not the sole reason for landlords leaving the sector. The reasons for this as I’ve no doubt you are aware are multi faceted and include taxation, mortgage increases, divisive rhetoric and, until last week, proposed changes to energy regulations. A possible change in Government will also worry some, but not everyone is heading for the exit because of the RRB.

We are very aware that the RRB will change the way the rental sector operates and will impact how landlords operate – some will leave the sector for sure, others are more positive. Our members have told us though (in a survey of c3.5k respondents), that 70+% can envisage a life without section 21, providing the alternative gives them confidence and works. Whilst the replacement grounds and notice periods are reasonable, Court reform and how the changes are implemented need a lot more work – hence our vigorous campaigning in this area.

You reference that I am strongly campaigning for fixed term tenancies because it benefits me. To be clear, there is little appetite as things stand for the fixed term to be retained. What we are pushing for is a six-month moratorium across the board during which a renter cannot give notice (except if the property is uninhabitable or in poor condition) effectively creating a minimum term of 8 months. This will help the student sector, protect landlord costs (in all parts of the market) and avoid creating a short lets market as an unintended consequence. We are also calling for a student-based repossession ground to protect the student market. I am pleased to say that if adopted, the whole sector (myself included) will benefit from the changes put forward – and they are put forward following extensive engagement of members’ views.

For the avoidance of doubt, I am selling no one down the river as you assert – I have a number of BTL properties (student rentals, benefit tenants, families and sharers) and have been a landlord for 20+ years – I am delighted to bring this significant experience to my running of NRLA. My job is to get our members views in front of decision makes and the people that matter. What Ministers choose to do with our advice and arguments is a matter for them, but I am glad we have significantly enhanced the organisation’s access, putting our members’ views across at the highest level possible.

Whilst I fully appreciate we have not met your expectations in relation to our campaigning activity, I am pleased to say that we continue to grow and enjoy excellent levels of member satisfaction but of course it is frustrating that the politics of today make it so difficult for landlords who do such an excellent job in the main.

Whilst it is clear to me that we will not agree on the effectiveness of our work, I do not believe your view represents the majority view of our work. I completely understand your frustration however, and I can assure you we will continue to do all we can to speak truth to power on our members’ behalf.

I wish you well.

Ben Beadle
Chief Executive Officer
National Residential Landlords Association

===============================================================================
Clearly the NRLA are not listening!

I have put my comments above about what was written in the leading article from the NRLA.

One problem is that the NRLA has not represented those of us who let on fixed terms to people who are not students, but do not want an indefinite let. We don't all let to social tenants or students.

The category of tenants wanting short fixed lets includes visiting academics, visiting scientists, visiting surgeons who stay for a short time to communicate their expertise to our hospitals and universities. By a short time, I am not talking about weeks, but several months, but perhaps not eight months as is mentioned in the reply to Catherine - could be just four months.

This is my business model. I've just let a flat for four months to an eminent German scientist. It is certainly not AirBNB as I currently give my short stay tenants a shorthold assured contract, and, in fact, charge them significantly less than the market rent for a long stay although I provide everything - bed linen, crockery, pots and pans etc.

I don't feel that my business model has a place anymore, although it has been a very well appreciated one by my tenants.

Incidentally, I think it is a very big deal if 30% of landlords' business models are not compatible with the loss of Section 21, as stated in the letter above.

Ben Beadle does not see the sense in having a fairer system of landlords and tenants having the same rights in the contract that either party can end the fixed term contracts or a periodic contract with 2 months notice. Also the NRLA AST appear to be very unfairly written with favourable terms for the tenants. It does not state anything about what the security deposit will be used for and what deductions can be made. NRLA has just debited my annual membership fees recently and I shall be phoning them to get a refund as I no longer wish to be NRLA member.

Scrap the stupid treasonable Proposed Renter’s Reform Bill now, it has done so much damage caused so much homeless, misery and not help any group least of all the Tenants making their accommodation unaffordable for sure unless you think bumping up their Rents 30% is good for them, it madness driving out landlords in the process, anyone would reasonably think the idea of Parliament making changes would be to make things better but this Bill is the opposite, helping no one.
The NRLA talk about extensive Campaigning and Surveys did they not ask the most important question how many landlords wanted indefinite/ Sitting Tenants which is what we are getting.
The Council’s are welcome to have those type of Tenancies for their single parents and life long Tenants on Benefits.
I believe that I am 17 years a member of NLA / now NRLA but no one ever asked me my opinion. I have met their top brass face 2 face at landlord investment shows and try to convey the problems I encountered because of the Regulation, they quickly made their polite excuses and virtually ran away from me.
Just scrap the crap unwarranted Bill now.

I know its Bens job and that of the NRLA to promote themselves, but they are hardly the voice of residential landlords when they only represent 3% of them and Im not sure how productive it is for anyone trying to sell that message on the BBC and variuous other news outlets when its just not the case.

Do the media understand that what the NRLA is saying "on behalf" of landlords, doesnt include 97% of them? Would they want to listen so much then? Hardly a mandate or even a full understanding of what landlords think?

Ben needs to stop ASSUMING what landlords think and actually use NRLA to ask how we feel on certain areas e.g. Section 21, future epc requirements etc.
He needs to stop just speaking on our behalf without actually asking us for our input. We as Landlords keep the NRLA afloat and I think he forgets/ignores that.

In an email to me he insisted he surveyed the membership - REALLY?

• Annoyed Landlord
• 28 October 2023 19:27 PM

Catherine,
I have been a member since before the merger with the RLA and have never been surveyed on that.

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@annoyed landlord - i did think that might be the case

• Annoyed Landlord
• 28 October 2023 20:14 PM

I was obviously not in that c3.5k and I suspect the question was phrased in such a way as to get the desired result. Drawing on my memory of sociology courses, it ws probably along the lines of, "If an alternative to S21 gave you confidence and worked to get possession of your property, would you be happy to see S21 abolished." I did sociology a LONG time ago but that wwas how they would phrase a queestion to get the right answer.

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Sorry - misread ur original response - I agree