Hardships tests, EPC ratings and a Section 21 ban – is this the death knell of the PRS?

Apologies in advance if this article appears to be ‘whiny’ but I feel that the Renters’ Rights Bill is about to turn a landlord’s world upside down.

There’s obviously no appreciation of a Landlord’s Rights Bill, it’s all one-way traffic and landlords always pay the price.

So, what do we make of the latest notion that Labour will bring in a hardship test to see if they can take possession of their property?

Not the hardship of the landlord who doesn’t get possession naturally but only of the tenant.

I’m dumbfounded but then I have highlighted that the Renters (Reform) Bill would have passed control of a rented property from the landlord to the tenant.

I also highlighted that among Labour’s amendments to that bill were moves to prevent possession for two years from the start of a tenancy.

Plus, I highlighted the housing minister’s bid to prevent possession in cases where the tenant would face hardship.

Since the Telegraph story highlighting this appeared, we’ve had various organisations and lawyers on LinkedIn disclaiming this was ever a thing.

So, shame on the National Residential Landlords Association for questioning this when the evidence is still on the list of RRB amendments put forward by Labour.

The naysayers all have one thing in common – they know they can’t defend this move so they have to question the dubious nature of why this has come about.

What is in the Renters’ Rights Bill?

I’ll tell you why this has come about, it’s because the Telegraph has more journalists working in Parliament than you do.

Those reporters are privy to conversations about upcoming legislation, and this is almost certainly on the agenda.

But the real issue for me is what else is in the Renters’ Rights Bill?

What if this is a kite flying exercise designed to gauge public opinion?

There’s no way that Labour’s claim to want the private rented sector to be fair for everyone will hold up.

They don’t want fairness, they want to punish good, decent hardworking people who have opted to invest in property for a better retirement.

That doesn’t make us bad people.

It doesn’t make us bad if we want to sell that property to fund a retirement and the ‘hardship’ test shouldn’t be relevant.

It isn’t our fault if a tenant cannot find another home to rent at a price they can afford.

It’s the government’s fault.

Prospect of a mass landlord sell off

Let’s not dwell on the prospect of a mass landlord sell off when the Bill is published, we’ll have to see the law first.

But don’t be too upset if landlords are put at a deliberate disadvantage because they own someone else’s home.

It is a tenant’s home, but it’s our property.

Let’s not dwell on the prospect of the buy to let mortgage market vanishing overnight when lenders realise they won’t be able to evict the tenant either.

So, they’ll be left with a landlord who can’t pay their mortgage and are lumbered with a tenant who cannot be moved out.

What is the likelihood that many of these tenants who win a hardship test case then stop paying rent?

Why not – the courts have confirmed they can’t afford to rent anywhere.

A landlord’s assets don’t belong to them

My big worry is that the Renters’ Rights Bill will make clear that a landlord’s assets don’t belong to them but to the tenant and, ultimately, the government.

We’ll see the erosion of the PRS as more landlords sell and more big firms move in.

Big firms, if you haven’t realised yet Labour and Labour voters, don’t care for those who don’t earn a lot.

They want tenants who can pay the rent.

That means tenants on benefits or UC will really struggle to find somewhere to live.

Will that lead to the government compulsory purchasing landlord homes? In other words, begin confiscating them.

Why not? It’s going to be a quicker and cheaper way to provide social housing than actually building it.

EPC ratings for rented homes

Along with the hardship test, Labour also wants the EPC ratings for rented homes to be A-C and a Section 21 ban will come in.

I can’t believe that I’m still reading in the media that a Section 21 ban will end homelessness.

It won’t. It’s mad that this issue doesn’t get the fair debate it deserves.

It’s really not that difficult that when a landlord wants possession they will naturally opt for the quickest route.

That’s using a Section 21 notice.

It doesn’t mean homelessness will end; it means you’ll have to call for another eviction process to be banned.

People investing in the PRS

Despite all this, and I can’t believe that this is true but there are people investing in the PRS.

It’s not quite like the 90s when a financial advisor would call you an idiot to your face for not seeing how easy BTL was for making money.

Many of us accepted this and have had trials and tribulations over the years.

But you know what? It was worth it all because we were going to get a bumper pension pot to enjoy for all that hard work.

Critics say we don’t do anything, but they’ve never tried. (Envy, much?). We did and have been proud to house families.

Hamptons says there are around a third fewer rental homes than five years ago.

The Ministry of Justice also says there are fewer rented homes and RICS says landlords are disappearing.

Landlords are calling it a day

I get why landlords are calling it a day or are bailing out to cash in for their pension.

With the prospect of higher CGT rates (God help us) linked to income tax, we really could be on the losing side.

There are some of us too who see our rental income push us into a higher tax bracket.

That’s always a joy when then the self-assessment goes in.

But these new landlords, mainly young people, have seen the capital growth in property and think it’s easy money.

It isn’t, it’s hard work, there’s a lot of inconvenience and the returns aren’t what you expect them to be.

Plus, here’s some free advice: Be prepared for that moment when you think the ruined weekends and late nights resolving simple issues have been worth it for a government that 20% of the population voted for takes it away from you.

The PRS boat hasn’t quite sailed if you want to invest in buy to let – over the long term it’s probably still a good punt. Unless Labour’s utter recklessness ruins it for us all.

Again, it’s always the tenant that pays the price because Labour will deliver real hardship for those who can least afford to lose out. Sir Two-Tier Keir will hurt everyone in the PRS!

Until next time,

The Landlord Crusader

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