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Shamplina Speaks: Government must safeguard the PRS

The government must safeguard the private rented sector and the only way to do that is to lend its support to private landlords and incentivise them to stay. 

For too long now, the narrative in the mainstream media has focussed on ‘villainous’ landlords, suggesting they are all profiteers who don’t take care of their properties or their tenants. 

Whilst I appreciate these cases should be reported and such landlords held accountable, we know these are the minority. Demonising landlords must stop.

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In reality, most landlords are individuals grappling with the ever-increasing legislation (currently 168 pieces), mortgage interest rate rises with a tax credit worth just 20% of annual mortgage interest payments, and the cost of maintaining and repairing a property. 

Landlords are also facing further regulation through the Renters (Reform) Bill, part of which includes the abolition of Section 21, and until recent days faced having to carry out considerable works to ensure their properties meets the new Minimum Energy Efficiency Standards of EPC rating C or above by 2028. At least the Prime Minister's scrapping of these EPC changes represents some good news. 

But that good news aside, if you were asked to run a business which was going to cost you more to keep it going than you were going to earn, would you take it on? Would you invest your time and money to do that? I think the answer from most people would be no. So why are private landlords expected to house people using a model which in many cases now runs at loss. What is the incentive to be a landlord? 

In the past, when we asked our landlords why they were looking to gain possession of their property, the number one response was always rent arrears. 

Now, more than 60% are looking to gain possession under Section 21, with most of them wanting to sell up now. 

Official figures from HM Revenue and Customs suggested that landlords sold 153,000 properties in 2021-22. Whilst we don’t know how many of those properties were purchased by other landlords, therefore keeping them in the PRS, it still provides an indication of a clear trend.

Whether this was part of the political agenda or not, I would question what the long-term plan is. Even without the amalgamation of factors which are driving more landlords to take the decision to sell up, what happens as our existing landlords get older and naturally decide to leave for their own personal reasons? 

What prospective landlords are coming to back-fill those we lose if there is no incentive for new investors? If there are no new landlords, what does that mean for tenants? 

We already have agents reporting between 20 and 30 applicants for each rental property.  Four years ago, prior to Covid, I was predicting there would be an accelerated rate of landlord wanting to leave the sector, we are seeing that now at an unprecedented pace.

I am not naïve to the gravity of losing Section 21 and have spoken about this on numerous occasions. It is, without doubt, a huge blow to landlords. My years of running Landlord Action mean I know only too well the challenges landlords face when they have to remove a tenant that does not want to leave. 

It’s rarely black and white, and that is why I have devoted so much time trying to educate landlords on the importance of due diligence and professionalism.

However, I am also of the view that we have to accept the things we cannot change and work around them (for those that wish to remain landlords). 

The removal of Section 21 has been in the pipeline for a very long time, it is inevitable, but it does not mean it will be impossible for landlords to gain possession. Good landlords with responsible tenants will have little need to evict for no reason, and those with reason will have access to this through Section 8. Tenants will feel the impact of this move too, as it means that landlords will be far more selective about who they let their properties too. 

Listen to this episode of The Property Cast I recorded with my colleague for more discussion on how the changes will affect landlords.

I am in support of measures which make genuine improvements to the quality of housing, and which offer tenants greater security where needed. However, I am more certain than ever that these must be balanced with equal support for landlords to provide incentives to accept those changes, make the improvements and reinvest in the market. A growing pool of tenants does not need a shrinking pool of properties.  

The reversal of Section 24, whilst unlikely, would be the most favourable outcome, but at the very least we MUST have designated housing courts and more judges to ensure a fluid system in which landlords can be confident.  

We’re working hard to persuade government, wherever possible, to reduce the backlog in the court system which has left some landlords having to wait up to six months (sometimes longer) for an appointment. 

We’ve provided figures, case studies and reports to highlight the extent of the problem and the consequences to the buy-to-let market if issues with the court system are not addressed before the Renters (Reform) Bill comes into force.

I also predict that when the date for abolishing Section 21 is finally set, further landlord panic will set in and we will see another spike in Section 21 notices being served and possession orders issued. Tenant groups must expect this as a consequence.

Listen to my recent LBC interview where we discuss the root causes of the rental stock crisis and the impact on both landlords and tenants

Read Total Landlord’s article for more information on what’s happening to Section 21 and the changes to Section 8.

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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    I think there is one important area that has not been mentioned at all which is all the housing stock used for air bnb or holiday lets. Those landlords provide nothing for the local community in terms of accommodation and make much higher profits than residential landlords. Why can’t they be targeted as the tourist industry can use hotels or b&b alternatives but people looking for a home to rent have no alternative.

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    Agree to a point, I don’t own any but your ideas are based on the government going after holiday let’s and Airbnb and then backing off normal residential let’s , what if they don’t ? And target the lot 😱

     
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    I think the plan is to go after all types of landlord and second home owners, and exert absolute, totalitarian control of the housing stock.

    And in doing that they are creating a housing crisis - and will cause their core supporters to stay at home at the next general election. The floating voters have already gone over to Labour.

     
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    Adam Bryan....Why should holiday let owners provide anything for the local community in terms of accommodation? That's not the business they're in....they provide accommodation for holiday makers etc, they're not there to provide social housing....there's a clear difference.....the fact that they make a decent profit doesn't make them rogues! They make more so pay more tax. Their guests spend money in the community. Win Win.

     
  • Fed Up Landlord

    The scrapping of EPC targets and kicking the Rent Reform Act into the long grass is too little too late. Rishi was influenced for far too long by the lefty liberal wing of the Con-Servative Party including landlord hating "Gnasher" Gove and "Mother" Theresa May. The new strategy group within the Tory rabble looking at the General Election have realised that whatever they do tenants tend to vote Labour. So they won't get the tenant vote and neither will they get LL vote. Lose Lose scenario. So now it will start grovelling to LLs. Well it won't work. LLs have had enough and are bailing out in their droves. What a load of idiots. And you can bet that if ( or when) Labour get in the anti- landlord rhetoric will continue or get worse under Smarmy Starmer The Flip Flop Kid. Many LLs are actively selling ( including me) and putting the money in the bank along with their feet up.

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    Did anyone bother proof reading the above before publishing it? Large section was duplicated and didn't the government abandon EPC C by 2028 a few days ago?

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    I think the actual situation is that a very large number of landlords will not just be selective with respect to the tenants whom they let to after the abolition of Section 21, they will not let to people who are covered by the Renters Reform legislation. That is what happened in the past anyway when assured tenancies existed without Section 21.

    Current tenants will not be affected for a period of time because Section 21 will still exist in relation to them, but then, when that period of time has elapsed, the private rental sector will almost cease to be available to ordinary people who want accommodation for an indefinite period.

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    Exactly very careful selection of new tenants will be a must going forward

     
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    You make a good point Ellie.
    I had a property prior to the introduction of Section 21 and the only people I would let to in those days, were American Forces personnel, based in the UK for a set period, so I could be confident of not losing control of my property indefinitely. The same will apply again for many landlords, once Section 21 has gone. I plan to stop letting altogether in a couple of years or so anyway because it's just not worth all the red tape.

     
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    I'm thinking the same thing, Mike

     
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    I am not going to knock Paul I have spent too many years fighting with him already.
    However he is sticking up for landlords and not many others doing that, we are the whipping boys. I seen that about EPC’s but he’s probably has written it a 100 times already not expecting Rishi to jump in a panic. Rent arrears or no Rent is not the biggest issue however difficult you find that to
    comprehend, its Removal of Section 21 which means loss of ownership and all control which is happening now with landlords selling up.
    Tenants acting with impunity whether damage, spurious allegations, overcrowding, sub-letting it’s all going on but fine the landlord, give them back a years rent, no win no fee lawyers crawling out of the wood work etc.
    The big boys are coming look around you hundreds of thousands of Flats going up, one question when we’re they ever involved in PRS.

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    The insurance for landlords property has crept up & up adding to rental costs.
    They are now £600 / £700. per property I don’t know how good any of them are as I haven’t made any Claims. They are now ignoring us hiding behind internet and recording talking machines making a mockery out of the customer.
    I tried another Company for an alternative quote but a waste of time also. All the questions under the Sun but at the end of it all not much different between them, 20 pages of terms & conditions so many exclusions in there so if you had a Claim you could probably whistle for it, one of the exclusions that stuck out to me was if you let to Housing Association Tenants or Benefit Tenants they are not covered.

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    Michael,
    That sounds a lot, especially per property
    I don't know where you are renting out/insuring (West London?).
    Just renewed my Lld insurance through my good broker and it went down (amazing as no other of my insurances has recently) as they moved to Royal Sun Alliance (so no Micky Mouse insurers).
    £580 p.a. for two flats and one house; no Lld contents as no common parts. In coastal West Sussex.

    I laughed at the bit where they won't cover lets to tenants on benefits (I don't have any). Am told by agents it is illegal to discriminate against benefits recipients (but who are unlikely to pass referencing as rent too high a proportion of income).
    But what happens if a tenant looses job and goes onto benefits? If insurance company won't pay out, might they be guilty of the same discrimination as a Lld could? In that case I'd investigate if it were an unfair contract term.

     
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    Mike, I agree I know how difficult it was prior to 1988 housing Act. In some cases I had let to Ltd Companies which gave you some protected as you weren’t letting to individuals even Blue Chip Companies I had those as well as some as Schools renting for over seas Students to learn about computer science.

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    We may have to go back to doing that again.

     
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    Them days are gone no one knew what a computer was back then (only Sir Clive Edwards) most were studying to be taken up jobs in America, in the tube train other morning over 50 in my carriage. All addicted one of those things in everyone’s hand it mad.

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    Henry S. Re: 23rd Sept’ yes your £560.00 is very reasonable for 2 Flats but maybe you are also incl’ a House in there as well or is it 2 Flats in a House ?, anyway seems a bargain. Just interested in how much is the Building Costs Cover or does it cover up-to a standard amount, property in London is much more expensive. To insure 2 Flats & a House for me is about £1200 / £1300. They all have the snout in the trough where landlords are concerned. EPC last week cost me £120. that used to be £60, (the previous guy left to work in US). I was told it had expired in June according to the Register but it wasn’t and the Register is wrong I have my Certified.
    That Quote did exclude Housing Association & Benefit Tenants but how many more Policy’s says Working Tenants anyway not a great deal difference there. I think its only Landlords that’s not allowed to discriminate as we are not allowed to have Terms & Conditions Virtually all are excluded by Statute, unlike Insurance Companies with
    6 / 7 down loads, sharing your information disgraceful, Policy’s should be restricted to 2 pages and finish its not rocket science it a house, hiding in small print what they don’t want you to know. Wonderful.

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    Michael.
    Sorry I didn't pick up your reply before now (and hope you see this). Doing so as writing to a RRB Committee MP about S21 loss. Pity she is Labour, so may follow their party line, even though a constituency MP (which she isn't much good at when I contacted her about a local issue).
    Yes, insurance was for 2 flats (converted house) + 1 other house.
    I recall buildings cover was up to a standard amount but not exactly how much (maybe £1million).

    I too had 2 different agents (one took over the other), both of which said my EPC was expired (which is what the Govt. EPC website also said), so they said I needed a new one. But I checked it out and even though "expired" I didn't have to get a new one if the tenants hadn't changed (they were the same people). So I was okay.
    Entirely agree it is only we LLds who cannot discriminate against those on benefits: companies can do.
    My issue is say if a house burns down and they find someone was on some sort of benefit, even top up housing benefit, they can decline my claim and the re-building cost would be massive. So totally unfair.
    I don't like reading pages of stuff they send: not so bad when on paper but a real pain if electronically. Showing my age, I don't absorb that well; and cannot write in pencil in the margins unless I print the reams out.

     
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