Bad tenants, worse politicians, S21 – is it over for landlords?

Bad tenants, worse politicians, S21 – is it over for landlords?

15:05 PM, 14th October 2022, About 2 years ago 17

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It’s not looking good for landlords, is it? What with rising interest rates, mortgage availability and the government handing bad tenants an opportunity to live rent-free in our homes!

That’s right. Liz ‘Blundertruss’ has struck again.

First, she raised my hopes that common sense will prevail on the proposed abolition of Section 21 when it appeared it would remain.

Then she confirmed in Parliament that the abolition plan will now go ahead.

I’m ticked off about this for a number of reasons (add your own in the comments below…):

  • The story that appeared in The Times was an off the record briefing from ministers and it was clearly a kite flying exercise so the government could judge how the idea of not scrapping section 21 would go down. Predictably, all of the relevant organisations and faces kicked up a stink. The landlords were outnumbered because barely anyone stood up for us.
  • This creating legislation that plays to the crowd is no way to run a government and while pressure groups have a role to play, the one-sided argument to end section 21 is beyond belief. The BBC does not even pretend to be impartial when reporting on the subject.
  • Not abolishing section 21, so the media tells us, will see millions of people being dumped onto the streets without a reason because all landlords are bad. There are no good ones among us.
  • We need to stop referring to section 21 as no fault evictions but where there is no reason given. It’s fairly obvious now that all non-landlords don’t care if we face months or years of non-rent payment because we are obviously loaded. The same people don’t care if our properties get trashed. We are loaded, after all, we can afford to repair them.
  • This brings me back to the kite flying exercise with the story in The Times. Yes, the government has had a bad week or two for publicity, but to bend straight away to the criticism that followed the publication showed me your intentions for the private rental sector more than any speech or manifesto will.

No landlord organisation is prepared to get their hands dirty

Leaving aside the fact that there is no landlord organisation prepared to get their hands dirty and get involved in a real fight, we do need to organise ourselves and explain the law of unintended consequences.

Thankfully, Property118 had a story this week about the Labour Party in the Welsh Senedd refusing to introduce a rent freeze because – and I take my hat off to them for saying this – they have looked at what is happening in Scotland, and they fear the real prospect that landlords will simply pack up and leave the sector.

The unintended consequence of a rent freeze in Scotland is that landlords will simply become fed up because while we face growing costs, our income will not grow to meet them.

It then makes perfect sense for landlords to sell up and it’s unlikely they will sell to another landlord so, yet another house leaves the PRS.

The reason why we need section 21

We need to make clear as landlords that the reason why we need section 21 is to get rid of bad tenants. Those are tenants who don’t pay rent, who trash our property and who cause problems for neighbours.

We need to make clear as landlords that not having section 21 means not having confidence in getting our property back.

We also need to make clear that we aren’t all loaded to the gills with cash and many of us rely on our rental income, particularly if we have retired.

Renting a house out to families does not make us bad people, we are simply meeting a demand that countless governments have failed to meet over the years.

And this is why we get the politicians we deserve.

Not just the scheming double-crossing politicians who live for a sound bite and cannot plan more than a few months ahead because if they could, they would have created the social housing and council houses that are so desperately needed in this country.

The private rental sector will continue to burn

While our politicians continue to fiddle, the private rental sector will continue to burn and fed-up landlords who are sick of bad tenants and terrible politicians will decide that with the increased legislation – with more to come – means it’s just not worth it anymore.

And like the Welsh Labour party, I can also guarantee that by the time the abolition of section 21 reaches the statute books, the private rental sector in England will be a shadow of what it is now – unless there is something to replace section 21 that brings landlords confidence in knowing they can gain possession when they need it.

There’s a balance to be made here to meet the needs of tenants and the needs of landlords but it’s only landlords who apparently have to pay the price.

Unfortunately, politicians will pay the price when S21 is abolished and eventually the penny drops with tenants that the lies and the legislation means they have literally nowhere else to live but I’m sure we will get the blame for that as well.

I really do believe now, if section 21 disappears we really are looking at the end of private landlords – certainly on the current scale.

Those that remain will be criminal landlords – because their tenants have nowhere else to go – and decent landlords who will be determined to offer quality homes for people who need them.

But no one wants to hear that most landlords are good people who genuinely care for the welfare of their tenants – and you won’t be seeing or hearing anything like that in the media.

Until next time,

The Landlord Crusader

 

Read last week’s article ‘Housing crisis? What housing crisis?’ – But don’t think that I am a Conservative voter/supporter

And the previous missive that provoked a lot of interesting debate about holding a Section 21 Day. Landlords – hold that thought!


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Comments

Jerry stone

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10:16 AM, 14th October 2022, About 2 years ago

Excellent article.
Well balanced and written.
Such a shame what will happen to all those people who need to rent.

JB

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10:19 AM, 14th October 2022, About 2 years ago

Abolishing Section 21 will be disasterous for tenants.

Tenants need to make some noise about this.

Tenants will not be able to find ANYWHERE to live

.... and living in a house with a low EPC will be many times better than living on the streets

Ross Tulloch

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10:24 AM, 14th October 2022, About 2 years ago

I have used section 21 three times to get rid of bad tenants. And 12 times to empty a property because of the pathetic fact that a room in an HMO less than 6.51m is illegal to rent out, and as I refuse to have an empty room, those properties were sold.

Reluctant Landlord

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10:35 AM, 14th October 2022, About 2 years ago

Reply to the comment left by Jerry Stone at 14/10/2022 - 10:16
...our taxes will rise to pay for them - the majority will be in temporary housing and joining a VERY long housing list queue....

Steve Wood

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10:41 AM, 14th October 2022, About 2 years ago

It a disaster that is not needed

Downsize Government

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11:05 AM, 14th October 2022, About 2 years ago

Thanks Crusader.
I believe Liz wanted to do the right thing, but the MPs did not vote for her to be leader. The party members did. Hence the MPs have sour grapes and are not playing ball.

It's back seat driving from the conservatives.

Adrian Alderton

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11:08 AM, 14th October 2022, About 2 years ago

Good article echoing what many landlords feel. Unfortunately both main parties are committed so its now about mitigating the risk and improving the court system. The NRLA are battling with politicians on behalf of landlords however there is so much anti-landlord rhetoric at the mo.
We should all right to our MPs outlining our concerns and the NRLA have a template.
https://www.nrla.org.uk/campaigns/write-to-my-mp
They need to understand that we are investors providing good quality homes and tenant choice but can also disinvest. This is the inevitable consequence and impact of which will be catastrophic on those they purport to be helping.
That of course if there are any of us left after more regulation, S24 tax, abolishing S21 and the looming EPC proposals.

Ross Tulloch

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11:19 AM, 14th October 2022, About 2 years ago

Mitigating risk is essential, and as the war on the whole rental sector continues, when a property we offered was seen by 5 people, the family we chose were all earners, none on benefits, unlike the others. With the removal of Section 21, not difficult to decide

Whiteskifreak Surrey

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16:28 PM, 14th October 2022, About 2 years ago

Reply to the comment left by TheBiggerPicture at 14/10/2022 - 11:05
I am not sure what are you trying to say? MPs voted for Lizzie and Sunak.
Despite of her being not a particularly suitable choice.
Anyway , I think her days are numbered, this government will collapse and the next GE will bring in Labour.
Then we are all truly doomed.

John Martin

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8:25 AM, 15th October 2022, About 2 years ago

I am a landlord in Edinburgh and have been renting property for over 30 years. The current legal situation in Scotland is that tenancies are open ended with no end date and that a tenant simply has to give 28 days notice at any time to end the contract (even after few days) but landlord has to give 84 days notice (certain grounds mainly want to sell, move in a family member or want to undertake major property upgrade). It generally works fine but has caused issues in student rentals where owners and indeed tenants are looking for set periods for obvious reasons. Under current legislation we can increase rent once per year but recent emergency rules have been introduced to freeze rent to March 2023 and no evictions. The key to a successful tenancy is finding right tenants. This legislation was hastily amended to allow increase if can be justified eg mortgage increase. Landlords and agents have been able to make tenancies work without fixed period agreements. The rental market is contracting rapidly and last property I advertised last month had 160 applicants in 3 days. My student son in Glasgow had to take an unfurnished flat as little chance of getting a furnished flat and some students having to do huge commutes to find a place or leave their course for a year. Many owners have switched to AIRBNB where higher income, all costs including mortgage interest taken off before tax assessment and 10% CGT when you sell instead of 28% if higher rate taxpayer. The catalyst for landlords to exit the market was the change to how mortgage interest relief was treated and how landlords were effectively taxed at their highest rate of tax on gross rent. You can of course avoid this if set up your Lettings as a limited company which most now do. There is little likelihood of this decision being reversed, increased legislation and restrictions in the offing, likely requirement to spend up to £10k to try and make 100 year old tenement flats energy efficient, pets as default (always had damage when brought in after tenants been in few months after entry and contrary to lease), the likelihood of a large Labour win at next GE with the possibility of restricting ownership to 2 properties and forcing owners to sell at discount prices to tenants the PRS is I am afraid only heading in one direction.

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