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By Paul Shamplina

Founder, Landlord Action

OTHER FEATURES

Shamplina Speaks - Landlords Are At A Crossroads

As founder of Landlord Action and chief operating officer at Hamilton Fraser, I’ve been talking to landlords for over 25 years - but never more so than over the last 18 months. 

It’s been a taxing time for everyone, yet sympathy and support for the plight of landlords has been thin on the ground. Meanwhile, many landlords find themselves at the coalface of extremely challenging circumstances, dealing with unprecedented levels of rent arrears – as high as £144,000 in one eye-watering case we’re currently handling at Landlord Action.

On the whole, it would seem that things are moving in the right direction. But landlord sentiment remains low. And with landlords asking me “When I speak out, is it worth it?” I’ve been asking myself, “Are landlords looking in the mirror and feeling like they’re at a crossroads?”

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I believe they are. And the reason is that although we’re now slowly coming out of the biggest health crisis that this country has seen in post-war times, it’s only in the coming months that we will start to see the true impact on a private rented sector braced for the most radical changes it’s seen in 30 years.

Without doubt the furlough scheme, government grants and the eviction ban - not to mention the generosity of landlords offering substantial rent discounts and payment holidays - have helped many tenants remain in their rental properties. 

But the government’s furlough scheme has finally come to an end meaning that around 1.9m people across the UK, many of whom will be renting privately from landlords, will no longer be receiving payments. It’s highly likely that these people will now be unable to pay their rent. 

Add to this the ending of the temporary ban on evictions and the economic fallout from the pandemic alongside rising inflation, increasing costs of shopping, surging energy bills and the impending Renters Reform Bill, and you have a perfect storm that will affect landlords and tenants alike.

As the financial support comes to an end and landlords have the freedom to evict again, charities are concerned that the UK could face a wave of homelessness. However, no landlord wants to evict a good tenant. With furlough now over, I would advise landlords who know their tenants have been in receipt of government support, to reach out and find out whether they are returning to work. Early communication is key to reaching an agreement before arrears build up - serving notice should be an absolute last resort. 

Landlords who are contemplating serving a possession notice would be advised to consider mediation. 

Having a third party intervene really helps with communication and we’ve had some amazing outcomes from our sister company, the Property Redress Scheme tenancy mediation service, where tenants have agreed to repayment plans and landlords have recovered their properties, avoiding court. 

And with review hearings at county courts still causing long delays alongside a continued surge in enquiries – Landlord Action has seen a 43 per cent rise in instructions from landlords and letting agents between June 1 and September 1 this year versus the same period in 2019 – court is best avoided at all costs.

The devastating impact of the pandemic on tenants has been well documented by the media, but sadly with little mention of the positive stories of landlords and tenants working together through a crisis that has affected both parties. In fact, the headlines often fuel anti-landlord sentiment when the reality is tenants and landlords need each other. 

Recently Shelter published research claiming that 45 per cent of landlords have been involved in ‘illegal’ activity ranging from administrative errors to physical violence. All too often, landlords are painted as criminal fat cats preying on vulnerable tenants, despite the fact that the most recent English Housing Survey revealed that 81.8 per cent of tenants it canvassed were ‘very’ or ‘fairly’ happy with their landlord, or didn’t hold an opinion either way. 

In my experience speaking to landlords, the vast majority do care about their property and their tenants. Anti-landlord sentiment, on the back of the impact of the pandemic, is adding to the chorus of landlords who are asking, “Is it worth it, or would my time be better spent elsewhere?”

Landlord Action saw a 17 per cent rise in enquiries to their landlord advice line between June 1 and  September 1, compared to the same period in 2019 - nearly 2,000 calls in just three months.  And 90 to 95 per cent of them were from landlords wanting clarification on the latest legislation and expressing a desire to sell up and exit the buy to let market.

As we emerge from the pandemic and await the planned government reforms to the private rented sector, due to be published in a white paper this autumn, it’s not surprising landlords feel at a crossroads, when the private rented sector itself is at a crossroads.

With consultations still ongoing into policies such as the ending of Section 21, introduction of lifetime deposits, landlord redress and changes to an AST, the sector is in for a radical overhaul. 

But let’s not forget that demand for tenants is still strong and, although I speak to landlords that have decided to sell their portfolios, there are professional investors looking to scale theirs up.

If you’re willing to brace yourself and think professionally, then you can look forward and deal with the changes. But if you do choose to stay, my advice (and I’ve created an online course on this), is that if you weren’t thinking about using a letting agent to fully manage your portfolio before, this would be the time to reassess. With everything that has already happened on top of what lies ahead, it will become harder and harder to self-manage. 

I’m looking forward to guiding you through some of the challenges in my monthly blog here on Landlord Today.

*Paul Shamplina is Head of Property for Hamilton Fraser and founder of Landlord Action, and also the star of the Channel 5 show Evicted! Nightmare Tenants.

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    As is often the case with Paul, some really good points raised and a sensible overview of the current state of the market. I am very unhappy, as I feel most Landlords are, of the extremely biased view levelled against the PRS. I have currently 2 evictions going through, one of which is not a bad tenant but needs to downsize and needs local authority assistance. The other, is extremely challenging and I now liaising with his father and to some degree his mother. I feel for those that can hold their nerve, and see this through, the rewards will be able to be reaped. However, I am looking at further diversification of my portfolio, and not seeking to simply stick with BTL in order to protect myself to some degree from the over regulation currently taking place.
    The picture painted of the PRS makes no mention of the terrible state that some London Local Authorities allow their properties to fall into a state of uninhabitability. I watched a documentary a couple of weeks ago and many of the local council properties were in a disgusting state, to the point it was seriously affecting the tenant's health. Yet, those same authorities had the front to go to other property owned and rented out by Private Landlords that have had far less serious issues raised and threatened with court action and fines! OK, you want a better standard of living offered by the PRS, no problem, but don't be a hypocrite and don't then look at PRS to be your cash cow and fill your gaping financial 'blackholes' created by suspect accounting practices and wasted money.
    It is LONG OVEDUE to change the rhetoric by both local and central government. Stop trying to play politics with people's lives and grow up. All the LL Bashing amounts to is vote scoring! If you really want to get the votes, WORK WITH LL's and reduce the unnecessary bureaucracy and huge costs being piled onto LL's. This will allow more LL's to enter the market, improve margins and slow down the increase in rent hikes. This will then benefit EVERYONE! It really isn't rocket science!!!

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    Far to sensible John, no bureaucrat, councilor or MP would ever be able understand that, or even want to try.

     
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    covid response was/is a scam

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    Paul makes a very good point about mediation . Normally I would be evicting one tenants every month through the courts but during Covid when I couldn't coincided with one of my councils, Sandwell, introducing call before you serve a free mediation scheme . All I had to do was write to the tenants and tell them the council will contact them about their rent arrears or in one case their behaviour and amazingly two left, two start paying the rent and one was rehoused by the Council.

    It goes to show that the intervention of what is perceived by the tenants as an all powerful third-party does work. It is a pity that not all the other councils have adopted such a process instead of telling the tenants not to pay the rent and wait for the bailiffs and rehousing the tenants themselves. The cynics will say this change is because the government have forced Councils to do more to prevent homelessness which I agree with, so many of my evictions were a result of the councils maladministration of housing benefit where they didn't pay or gave the money to the tenants who kept it. However one ray of sunshine in a fairly bleak environment .
    Jim Haliburton
    The HMO daddy

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    Something at least but it’s the third party that caused the problems in the first place.
    I never understood why they get Housing Benefit, now 3m on it out of control, living off their fellow man, most false claimants anyway.

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