The Landlord Law Blog

Interesting posts on residential landlord & tenant law and practice In England & Wales UK

Landlord Law Newsround #262

This post is more than 3 years old

by

Landlord Law Blog NewsroundWell!!  What a week we have had.  Not, I have to say, a particularly good week for landlords, particularly if your properties are owned on a mortgage.

Not a very good week for tenants either, particularly if you are saving up to buy your own home. Let’s take a look at some of the news items.

The Tories ‘fiscal event’.

It has to be said that this has not gone down well.  The markets have gone bonkers, and the Bank of England has had to step in to prevent pension funds from being unable to pay their debts.

But how does it affect landlords and tenants?  Well, the most obvious consequence is the prospect of a rapid rise in interest rates.

I think the situation was best explained by this lady on Question Time last night:

Landlords heading for the exit

Landlords will be having the same problem.  In fact, some of them may no longer be making any profit on their properties at all.

This article in the Guardian analyses the situation and ends with a quote from Vikash Gupta, the co-founder of the asset management firm VAR Capital

We are advising our clients to sell out of buy-to-let properties, especially those in prime central London and held in personal names, as such investments will remain stressed and potentially unprofitable in the near future

Tenant activists may say “good, serve them right”.  But it is not good.  If it means they have sell up, this may mean that property being permanently removed from the Private Rented Sector.

Until sufficient social housing has been built to provide a realistic alternative to renting privately, our society really needs private landlords to house people who cannot afford to buy.

And the group of people who cannot afford to buy has just got larger.  It may soon include those who have had to sell as they can no longer afford their mortgage payments.

Where are all these people going to live if there is a smaller private rented sector?

Already in Scotland, where they are proposing to freeze rents and stop evictions, there is now massive demand for fewer properties after landlords have sold up and gone.

The Labour Party proposals

For landlords, getting rid of the Tories may not be the answer.  Lisa Nandy has the following proposals for the Private Rented Sector:

  • End Section 21 evictions;
  • Reduce eviction powers for landlords whose tenants are in arrears;
  • Introduce four-month notice periods;
  • Examine scheme for ‘portable’ deposits making it easier and cheaper for tenants to switch properties;
  • Allow tenants to have pets;
  • Permit renters to make ”reasonable alterations to a property”;
  • Create a national register of landlords;
  • Initiate a legally-binding decent homes standard in the private rental sector.

Some of those are good, but some – for example four month notices for tenants in arrears of rent (if that is what they mean) and the absolute right to keep pets, will have landlords reaching for the phone to put their properties up for sale.

Nandy said

For private renters we will tilt the balance of power back to you

Well, we know what happened last time the balance was tilted to tenants – that was the Rent Act 1977 when no-one was willing to rent to them.  But then we had a large social housing sector, and buying your own home was more affordable.

However, don’t panic, all this will take a lot of time, and in the meantime, the National Residential Landlords Association (NRLA) is making representations.

The NRLA proposals

The NRLA is calling on the Chancellor to adopt its plan for the sector, to be financed by a reported £1.5 billion underspend in budgets at the Department for Levelling Up, Housing and Communities. The plan includes:

1.      Reforming the benefits system to prevent rent arrears in the first place.  This should include:

  • Unfreezing housing benefit rates. It makes no sense to have support for housing linked to rent levels as they were three years ago.
  • Ending the five weeks wait for the first payment of Universal Credit.
  • Giving Universal Credit claimants the ability to choose, at the start of a claim, to have the housing element paid direct to their landlord if they so wish.

2.      Extending access to emergency housing support (Discretionary Housing Payments) to those not in receipt of benefits.

3.      Scrapping the £400 Energy Bills Support Scheme payment, and instead repurposing the money, paying it direct to every household in one go, for them to use towards the increased cost of living.

4.      Addressing the supply crisis in the private rented sector – the biggest driver of rents.  According to Rightmove, in the second quarter of the year, demand for private rented housing increased by 6 per cent compared with the year before. Over the same period, the number of available properties was down 26 per cent.  The Chancellor should therefore:

  • Reverse the decision to restrict mortgage interest relief in the private rented sector.
  • End the stamp duty levy on the purchase of homes to rent out. Research by Capital Economics suggests ending the levy would see almost 900,000 new private rented homes made available across the UK over the next decade. This would lead to a £10 billion boost to government revenue through increased tax receipts.

NRLA Chief Executive Ben Beadle saying

Both landlords and tenants are struggling with the cost-of-living crisis. We need a package that supports both to prevent rent arrears and sustain tenancies.

Our proposals provide a pragmatic way forward that would have an immediate and positive impact on the private rented sector. We call on the Chancellor to act as a matter of urgency.

Whether the Chancellor will listen is another matter.  He may have other more urgent matters in his red box.

Changes from 1 October

Turning to more mundane matters, I need to remind all landlords about changes in regulations commencing on 1 October:

Smoke and CO alarms

Landlords should already arranged for any extra CO alarms to be fitted as (from 1 October) they will need to be in any room with a fixed combustion appliance excluding gas cookers. And when new appliances are installed in any home.

Landlords will also now be responsible for the repair or replacement of alarms, once they have been notified by tenants of any problem. Although we would also advise that the alarms be checked anyway during your regular inspection visits.

Government guidance can be found here.

Right to Rent after 30 September

The special rules introduced during the pandemic are due to end on 30 September. There is a detailed blog post here which takes you through the options which will be available to you after then.

Energy Price Increases

I am sure I do not need to remind you that these kick in tomorrow.

We are all being advised to take meter readings by the end of today (30 September) so we know when the new prices will start to apply.

Snippets

And finally

I understand that the Tories enjoy a bit of Karaoke.  This caught my eye on twitter.  Enjoy:

Newsround will be back next week.

Notes:

Please check the date of the post - remember, if it is an old post, the law may have changed since it was written.

You should always get independent legal advice before taking any action.
Please read our terms of use and comments policy. Comments close after three months

Sign up to the Landlord Law mailing list

And get a free eBook

Sign up