How Rental Reform Bill will affect landlords
The Government released its fairer, private rental sector white paper earlier this month, which lays out its plans to improve the rights of renters and the condition of rental properties. Here is the impact I believe it will have on landlords:
The Government proposals in the Rental Reform Bill have been created to filter out rogue landlords and make rental properties across the UK fit for purpose, which is something I welcome.
No one should pay to rent a property that is unsafe and not properly maintained. However, I think some of the proposed changes will also result in increased costs and a lack of security for reputable landlords, and will force some out of the market, creating a shortage that could drive up rents.
Section 21 being abolished is one of the biggest changes set to come into force and it will mean landlords cannot evict people without a genuine reason.
This will provide more security for renters and stop unscrupulous landlords evicting tenants for unreasonable reasons.
So this is a positive thing for the industry and good landlords won’t have issues with it as they will still have the right to gain possession of their property by providing two months’ notice to tenants when the reason for the repossession is not the tenant’s fault. Abolishing fixed terms tenancies is also another big change coming in, and the one which is likely to have the biggest impacts on landlords as the new legislation states that tenants will be able to end their tenancy at any time by giving two months notice.
This means that landlords will no longer have fixed-term security and will have no control over how long tenants stay in their properties for, which will be an issue for some, particularly accidental landlords and those with just one or two rental properties that they rely on to generate additional income or cover mortgage payments.
However, on the flip side, the legislation, although still lacking in detail, does look like it will make it easier for landlords to evict tenants for anti-social behaviour, which is something that is much needed.
Another major change due to come in is that landlords can no longer stipulate no children, families or people in receipt of benefits.
When it comes to families and children, I think this is a good thing, as no one should be penalised for having kids. For people on benefits, whether to allow them to rent or not should always come down to affordability anyway, so as long as a tenant is earning or in receipt of benefits that are deemed enough to cover the property’s rent by the landlord, they should be allowed to rent it.
Landlords will not be able to ban pets without good reason, but they will still have the option to say no to pets if they have a fair reason, and they will also be able to charge an extra pet charge to protect against potential damage.
These changes have all been brought in due to bad landlords, and rental rights will now favour tenants and, while some were needed, some will make it harder and more costly to be a landlord.
Landlords buy property to let as a long-term investment, but they are also providing valuable accommodation and we need to ensure regulations do not make them leave the market or put them off entering it. My advice to landlords is to ensure properties meet the upcoming standards and get advice from a reputable letting agent who can help you prepare and comply with all the new legislation.