I recently had the opportunity to challenge a lot of nonsense in Parliament. Or to put it another way, I was called to give evidence to a couple of select committees.
I was asked to speak about the desperate need to unfreeze Universal Credit and to discuss the Renters (Reform) Bill recently introduced to Parliament, which are both undeniably crucial to the future of our private rented sector, but I couldn’t help but feel that the parliamentarians were missing the wood for the trees.
In both instances the point was clear. We don’t have enough homes to allow the market to function in the way that it could, and government policy is failing to address the problem. This should be the Government’s number one priority, with opposition parties holding their feet to the fire until it’s resolved, but strangely it’s not.
Don’t get me wrong, we need to fix the welfare system so that it covers the cost of providing decent housing. And it’s crucial that the Renters (Reform) Bill gives landlords the confidence to invest not give rise to yet more sales and market exits. But neither is going to get to the root of the supply crisis facing the PRS today.
I get criticised on a daily basis for pointing out that landlords are struggling to make a profit, or even break even in many cases, at the moment. The argument goes that landlords don’t want to take any risk and think they have a divine right to make a profit.
It’s absolute drivel!
We’re businesses, we know the risks when we make an investment, and we take on more risk of default and property damage from our customers than practically any industry I can think of. It will go wrong sometimes, we may lose money, but we brush ourselves off and go again.
Landlords are not selling property, or taking their investments elsewhere, because they are scared that they may make a loss. They are doing so because all of the evidence points to a system being engineered to make it next to impossible to make a profit.
If the Government, or the next government for that matter, genuinely wants to deal with the supply and affordability of rented housing there are three simple changes they could make that would boost investment almost overnight.
- Stop taxing our revenue. We should all pay our fair share, but tax our profits like any other business and reverse George Osborne’s absurd s24.
- Start encouraging investment in rental properties by scrapping the additional SDLT levy. Help us grow and revenue will increase; and
- Ditch the ‘them and us’ attitude towards landlords and tenants. We aren’t adversaries, we provide a service and they consume it. A landlord able to plan for the future and run a sustainable business good for their customers.
Supply will not increase if landlords feel they are being punished for planning for the future or making a profit. It doesn’t need to be complicated or costly. Successful landlords provide good homes, lots of them, which result in happy tenants.
* Ben Beadle is the chief executive of the National Residential Landlords Association *
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Thank you, Ben!
I'm pleased to hear and see that you're with us.
From a political perspective, is anyone actually taking notice of and addressing the Sect 24 debacle?
Why did the government petition do so poorly?
Good point John Young. As a bunch of business people we need to shout far louder than we do about what we don’t like.
Tenant activists and MP's live in the Twitterverse. Landlords have to live in the real world
Is the Renter's Reform Bill undeniably crucial to the future of our private rented sector? I feel the private rental sector would have a far better future if the Renter's Reform Bill was scrapped completely.
I completely agree that George Osborne has done the private rented sector no favours with his crazy section 24 and his stamp duty levy.
Is that the same George Osborne that got a job with a large corporate landlord earning £650,000pa for a one day week? I wonder why he wanted to restrict the supply of private rentals.
Completely misses the point that we want to keep Section 21, for where the proposed strengthening of Section 8 still won't cut it.
E.g.
1) ASB where those affected are too scared to give evidence under an enhanced Section 8;
2) Complete and irretrievable breakdown in landlord-tenant relations (more likely to be a problem with the never-ending tenancies), that if it was a marriage would end up in (that really is no-fault) divorce;
3) Where tenant is likely to cause harm to themselves or adjoining properties (e.g. where they get bad dementia and need to be accommodated in a nursing home);
4) Other things readers of this comment can think of...
This may mean reform of S21 so that a limited category of fault is stated; but importantly still giving the mandatory ground for eviction that S8 doesn't.
The safeguard against misuse would be the penalty for a landlord lying to the court. So as long as the judge was convinced the Lld wasn't lying, possession would be granted.
If the Govt. wanted to make council accommodation not having to be provided under this revised S21 (the reason they seem so keen on getting rid of it, to help Tory councils) I would be okay with that.
This change would get rid of the (supposedly) pro-tenants groups argument of no fault existing.
It would give us a backstop for the worst tenants: otherwise the only safeguard is a Lld selling up or using the home for themselves or their family (which would deprive other good tenants of a rental and further reduce available stock).
I agree Henry. However, no fault termination of the tenancy by the landlord can still occur under Welsh Labour in Wales, so I don't see why it is necessary to move further to the left than Welsh Labour in England.
Many landlords are quitting the private rental sector in Scotland now because of their extremist legislation.
So glad someone in parliament actually understands what good landlords are doing and how penalised we now are! it's got very difficult to continue to provide for renters, some who are vunerable and desperately need good and kind landlord. Yes there are such Landlords!
I'm currently trying to decide which property to sell so that I don't end up in financial difficulties.
The Biggest Problem with The Rental Sector is THE RENTERS REFORM BILL that deliberately caused the Problem do you not understand that, Rachel Maclean Housing Minister only 5 years in Government and we landlords for decades and your Housing Secretary Mr Michael Goy equally inept.
I am afraid that Ben Beadle hasn't recongised that fact, Michael. He is not dealing with our concerns properly.
I honestly don’t see this useless government or the next (Labour) looking upon us the way the article wants, we make a fantastic’ lighting rod’ for anyone with the wherefore all to blame us, for anything really, the lack of housing, the cost of rents, the cost of living…. You name it 🤔 we will always be the pantomime bad guy 🏴☠️
100% Simon.... And that's why I'm selling up. 👍 I doubt there's anything likely to happen in my lifetime to make me change my mind.
Its Mr Gove of Course I wonder if they have nobbled my phone.
I'm afraid Ben (Beadle) your words of support for the PRS always fail.to reflect the real sentiments felt by PRS sector landlord:
1) NRLA completely ignored the recent petition to remove s24. Not even mentioned petition once in any of your press release even when your members had repeatedly ask to do so.
2) NRLA with such great access to political corridor of Westminster, unable to garner a single MP or other public figure to publicly champion our cause .
3) Failing to actually set out the real benefits of PRS is the issue of landlords negative perception-
PRS is not a voluntary housing charity sector it is a legitimate business which run on profit like any other business without any state funding unlike most sectors. To note government previously actively encouraged and nurtured this sector as great micro regeneration pathfinder to build up housing stock in deprived neighbourhood, house by house, landlords invested in great swathes of no man land across the country bringing back many streets from the brink, where noone wanted live, and homewoners/council/corporates too scared to invest.
4) the taxation has been so pernicious and cynical by government that for those who had invested over 10years ago CGT and indexation relief changes has wiped out any planned growth leaving us in catch 22 that its too expensive to get out and too expensive to stay in.
Shane try to stay in. I know the Government wants us out and a big pay day for them if you have any equity in there and a big pull of SDLT from next buyer, then all the Conveyance, legal fees, Estate Agents fee, Surveyor’s fees and VAT on everything, possibly 28% c/gains tax on way out, then if you die 40% IHT of the remnants not much left of a lifetimes work.
I'm going to try and stay in as well, I may well live to regret that, I don't want to sell, I enjoy what I do and have great tenants, but i can fully understand those that want to get out and why
Stay in, but, on your terms, not their terms.
Yes Ellie it will be on my terms, even if I end up in court over it
I think there will still be ways of letting for fixed terms to companies etc who will definitely pay the rents. There may be complications though.
on interest alone my extra costs will be £25000! and of course this is just another area where we have been penalised on not counting it AS AN EXPENSE.
Even if you could increase rents that much the government would take the first £10000 or £15000 as extra Section 24 tax and then credit back only £5000. Either way the lender still wants their extra £25000.
In reality how many of us can increase rents that much in one year?
How are we supposed to then pay for EPC upgrades (which are mainly capital improvements) out of the much reduced income we are left with after paying the extra tax and interest?
I am delighted we have Ben Beadle batting for us. His tireless energy and ability to maintain a high profile arguing for sensible reforms is for the benefit of all. Keep up the good work I say.
The simple and uncomplicated fact is that more suitable homes are needed. The politicians have discouraged the right sort of relevant building and legislated against good landlords, in a futile attempt to balance the situation and more recently divert blame for their failings. When supply is in equilibrium with demand a free market will operate allowing competition to weed out bad landlords keep house prices stable and find a natural balance between rent and buy.
I believe that we must focus on this single goal but it will take time. We need a concerted effort to provide the right sort of homes in the right locations as a top priority. As Ben points out we need a unified approach supported by government, landlords and tenants working together.
I don’t see good landlords need to fear s21, provided the courts are bolstered to deal with matters in a timely fashion. Periodic tenancies for students are destructive, plain stupid and must be pushed back, unless this is part of a planned attack on university education which if so should be brought out in the open.
There are other factors which skew the housing market. Lisa Nandy said homes are a right or words to that effect and she’s right in my view. Property investment can be speculative and provide some with rewards way beyond reason. This is a main driver towards unaffordable prices and the great divide between haves and have nots.A delicate matter which would be partially addressed by making sure we have enough homes to go around.
Yes, but ‘the courts won’t be bolstered’, they will get very much worse and evictions all but unobtainable, which is what the Gov have intended.
Ask your self, where are the Gov going to house the growing homeless? There’s no housing, so it’s obvious the Gov has to ‘ lock in ‘ current providers whist it plays for time to get more stock built, which will take two decades or more.
One fine day a few years from now the penny will eventually drop and the then government will realise what a disaster the Renters Reform Bill was for tenants because by then properties to let will have become as rare as rocking horse droppings as per previous section 21 in the 1970/80s and rents for those few available will have gone into orbit along with homeless figures.
Spot on David!
Call me cynical or a conspiracy theorist but I think they already know the damage that will be caused. I have presented my MP with indisputable evidence time and time again. I genuinely believe they are trying to swing the market in favour of LLoyds John Lewis and the rest of the corporate BTL contingent. I received 52 enquiries for a small house I put up to rent recently. I explain to those people who did not secure the tenancy what is happening in the market and encourage them to write to their local MP if they are struggling to get a tenancy. The more people realise what is going on the harder our Government will find it to hide what they are doing
I've talked to my tenants about the situation, too, explaining why rents have doubled in the area - and why they are more than twice the amount I charge - the RENTERS REFORM BILL. I haven't raised my rents because I don't think they can afford to pay any more, but supply will drop much further and prices will go up even more as that legislation is close to coming in force.
What I don't understand is why the government don't force councils to build the affordable rental properties that they need and make them manage and maintain them as it used to be with " council houses". I can only guess that the councils know that they can't do it without loosing money. They are happy to criticise private landlords instead. Housing Associations don't manage properties anywhere near as good as a serious private landlord...
Housing Associations are not ‘ true businesses’, they enjoy huge tax payer subsidy, have access to cheap Gov land, special low cost loans, and are exempt from much of the legislation that applies to the PRS.
They are ‘ dressed up’ public housing providers riddled with all the predictable inefficiencies.
The other angle is the population is rising. How about focusing more effort on illegal immigration and keeping a proper track of expired visas?
Agree you point, but we are already ‘ defacto unpaid boarder control officers’.
Lose an asset, access to inside it, money & your will to live,
for a year if there is no defence from the tenant on a 1.5 years/20k in arrears, Section 8.
Or maybe 2 years, if they pay the court fee for the boiler plate
their free Duty Solicitor writes for them & the judge gladly ruins you over.
GET OUT, give the 'judges' Corporate Landlords they are entwined in, what they want.
INVEST WHERE YOUR MONEY IS SAFER AND WELCOMED
I think this is a good article , by Ben , Private Landlords are the easiest and cheapest solution to the Housing Crisis ,Thatcher knew that.
The People Ben was talking to on the committee , Were In my opinion just doing lip service.
Any one with half a Brian can see there is an Housing crisis and the solution does not require a Rocket t Scientist.
It is quite simple . Stop section 24. Keep section 21. Move Gove to where he cant do any damage. And stop allowing Councils to have whole sale Selective License Areas . The legislation was supposed to be Selective . Not whole areas and why are applications just rubber stamped by Goves office
Didn't Gove do enormous damage to the education profession in one of his previous incarnations?
Good points by Ben Beadle, although these could have been shouted from the rooftops for the last 2 years.
The government has throughly put itself in a corner with all this, and it’s becoming funny to watch. So they’re pushing landlords out, and convinced tenants it’s all been for their benefit. They’re too proud to backtrack on what they’ve done for fear of having to admit they didn’t think it through (they didn’t). Having pushed many landlords out, the renters are all now looking to the government and saying “ok you got rid of those greedy landlords, I’ve got nowhere to rent, what’s your plan to plug the gap?” And the government has no answers and no money to address the problem.
The beauty of reality, is the more you ignore it, the bigger it becomes until it forces you to take notice. The reality is, there is a huge shortage in the rental sector and the government either needs to pay to have a lot more houses built (not going to happen) or they need to make the PRS attractive enough to entice investors back in (and engage in a series of u-turns and take the flak that will come with that).
Sitting here now with my bucket of popcorn to see how they play this…..
Like many here I can applaud the comment made by Mr Beadle in this article. I would also add why has it taken so long.
Section 24 out keep section 21. They can amend s21 but do not get rid of it.
I have had to evict a tenant and s21 was used. Our Court system is broken. It has taken me since September of last year to get a possession order. No rent paid by the tenant in this time. No chance of getting this rent back and now back to the Court to get bailiffs, which could take a further 2 months.
The tenants has blatantly lied to the Court, but who checks this.
Like others on this site I too have enjoyed being a Landlord, but now being taxed so unfairly, vilified in the media and now my rights and control over my business being taken away from me, well i'm leaving.
I am open to changing my mind if I see some positive changes, but currently I will be selling as and when my properties become empty. They will be sold to my advantage, which would not be right now, due to the state of the market, but hopefully in the Spring if market confidence returns by then!
A word of advice Andy. Bailiffs cannot force entry. So rather than get a bailiff its wise to seek leave from the judge to use a high court sheriff. They can and will use force to gain entry. If your tenant does not answer the door, which is highly likely, then the bailiff comes back empty handed and this can only add to your miseries.
Always use the high court sheriff, they are well worth their fee
Thanks guys, point noted
Spoke with the company whom I have appointed to sort this and they have said I can't use sheriff's as I used the accelerated procedure, plus Courts are now reluctant for Sheriffs to be used!
I've been advised to get a lock smith in attendance and they will gain access and the bailiff will do the rest.
And probably quicker
Catherine, you are not cynical or a conspiracy theorist you are 100% correct and a realist.
I have been banging on about this from the beginning of this deliberate debacle.
Gove & Co are behind all this and I understand he was involved in writing up all this in a previous administration before getting sacked by Prime Minister Johnson for double
crossing him, so he’s not a trust worthy person and not fit to hold Office. It doesn’t say much for Rishi Sunak to have reinstated people like this.
Thing is most of tenants think ( me) a landlord are rolling in it. With these high or increased rents. U try to explain but they not have it.
A lot of tenants appear to be ''rolling in it as well'' just look at the cars some of them drive and their life styles
It's really sad that nearly all tenants really appreciate what I and most other landlords do for them in putting a roof over their heads and giving them a place to call home, whilst nearly all the rhetoric is about greedy, almost evil, landlords exploiting them.
Anyone with half a brain knows perfectly well it's just a business transaction to the benefit of both parties, apart from those who think that they are entitled to housing on terms of their own choosing. I'm pretty sure government know this as well, as most of them have a background in business and some of them are also landlords.
Self serving as always
Its not the whole story though, lets not forget the TFA, MEES, the RRB coming in, plus all the other extra costs like EICRs, licensing etc. Not forgetting of course the farce of managing this recent inflation & public sector militancy that has led to the higher base rate and to boot then doing nothing to rein in lenders charging 9% + SVRs. It has been a bit of a horror show. Repealing S24 is playing around in the margins such is the scale of what's happened.
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