Landlords and agents set to bear brunt of £33M cost of Renters’ Rights Bill

Landlords and agents set to bear brunt of £33M cost of Renters’ Rights Bill

9:33 AM, 26th November 2024, About 4 weeks ago 32

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The impact of the Renters’ Rights Bill is expected to cost £33 million a year, but the government insists it will not trigger a mass exodus of landlords.

According to the government’s impact assessment, the estimated cost for landlords is £12 per rented property annually, while agents are expected to face an average cost of £1,700 per year.

The government admits most of the costs (excluding those related to Awaab’s Law and the Decent Homes Standard) will fall on landlords, with the majority impacting private landlords, and a smaller portion affecting social housing landlords.

Landlords will only benefit by £9 a year

The assessment also estimates tenants will benefit by just £28 per household per year. Landlords are expected to see a gross benefit of only £9 per property annually, largely from reduced letting agent fees due to fewer household moves and shorter void periods.

The government claims the Renters’ Rights Bill will only cause a small number of landlords to exit the market.

The assessment said: “There is a risk that costs from the legislation may result in some landlords leaving the sector. This is difficult to estimate precisely, though we would expect it to be substantially mitigated by the additional cost per rented property being a very small fraction of average annual rent and asset value.

“The available evidence to date does not suggest that similar reforms to abolish section 21 in Scotland have negatively impacted supply, nor changes introduced by the 2019 Tenant Fees Act, despite concerns they would.”

However, a study by the Scottish Association of Landlords shows a reduction of 22,000 rental properties in Scotland in just one year due to government policies and anti-landlord rhetoric.

A survey by the National Residential Landlords Association (NRLA) found that 41% of landlords plan to sell properties within the next 12 months, compared to only 6% who intend to buy.

Replaced by more professional landlords

The government claims that those most affected by the costs of the Renters’ Rights Bill will be the landlords providing the poorest service to their tenants.

The assessment said: “Landlords facing the greatest costs as a result of these measures will be the ones providing the poorest service to their tenants, we anticipate they are more likely to exit the sector as a result of these changes, which leaves the potential for them to be replaced by more professional landlords.”

The assessment also reveals that the government has turned down the idea of a specialist housing court, saying the costs would be too high. Instead, they plan to digitise the court process, which they say will make things simpler for landlords.

The full impact assessment can be seen here


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Elizabeth Hill

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9:39 AM, 26th November 2024, About 4 weeks ago

Pahahaha!!!! Yeah right! Let's not forget to include in our sums the huge amount of rent arrears that the new bill will add via the extra 2 months 'grace period' renters will have to not pay rent before eviction proceedings can even start, nor the unlimited challenges they can make to each and every rent increase no matter how small..... This very legislation designed to protect the poorest renters will do nothing but damage them as landlords become more risk averse in their tenant choices as a direct result of this bill......

Julian Lloyd

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9:40 AM, 26th November 2024, About 4 weeks ago

The comments on the possible impacts sound like a wish list to me rather than reality.
Only the bad landlords will leave! Are they kidding??
Any more legislation or restrictions on landlords will mean more leave and costs will increase. It’s simple supply and demand.

Cider Drinker

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9:57 AM, 26th November 2024, About 4 weeks ago

Every word of the RRB increases costs for landlords (and therefore, tenants).

That £12 needs to cover subscription to a database, membership of a redress scheme, increased risk (of hefty fines, larger defaults, heavier legal costs to name just a few).

Where the Bill is long, answer is short.

I will never offer a tenancy to anybody ever again.

So, there you have it. Generation Rent, Shelter (who don’t provide shelter to anyone) and successive governments have won their war on landlords. Good tenants are just the collateral damage.

Northernpleb

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10:14 AM, 26th November 2024, About 4 weeks ago

Only a small number of Landlords will leave !! Why are 20% of the Properties currently up for sale ex rentals ?

Why in some arears are Landlords getting 60 to 90 enquiries when they put a property up to rent ?
Why are rents at record levels ?

The NRLA should be in touch with local agents and councils. to assist in providing accurate truthful figures on a weekly basis as to how many rental Homes are being lost. And How rents are rising.

Cider Drinker

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10:19 AM, 26th November 2024, About 4 weeks ago

I keep having to fix headlines.

‘Tenants and agents set to bear brunt of £33M cost of Renters’ Rights Bill’

Consumers pay for the cost of providing goods and services. That’s how it works.

Increasing NI, increasing the minimum wage, stealing bits of a farm… all come at a price and it cannot absorbed by the suppliers’ tiny margins.

Downsize Government

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10:30 AM, 26th November 2024, About 4 weeks ago

How's the accuracy of the HS2 budget going?
Does anyone have faith in government estimates.

The costings seem conveniently to support the passage of the bill.

Andrew McCausland

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10:31 AM, 26th November 2024, About 4 weeks ago

A fine example of what the military call "situating the appreciation rather than appreciating the situation". There are some good points in the impact assessment but too many preconceived politically motivated issues obscure the benefits. This was not drawn up with an open mind, rather to reinforce and "prove" a particular point of view.
Personally, I don't have an issue with the loss of S21, but only if the courts system is reorganised to cope with deluge of claims that will follow. Digitising the process is long overdue, but we have yet to see the details of what this means in practice, how long it will take to implement, and the funds available to progress this. My fear is that the answer will be years, and none.
A few years ago I worked with Frank Field, then Chair of the Commons select committee on work and pensions, on issues around homelessness and social exclusion. The results were pretty clear, and what we termed the "hard to house" group were ones we wanted to target interventions towards. For a number of reasons, a large percentage of this group gravitated towards the PRS as their last option before homelessness.
As a result of this legislation landlords will now need to be much more selective on who they rent to to try and protect themselves. This means the hard to house group will be even less likely to get into the PRS, leaving them to fall back on council and HA lists, places they have often already been excluded from. Inevitably will lead to higher emergency housing costs and increased homelessness.
Without a workable system in place BEFORE this is enacted then more and more landlords will simply give up and exit the industry. The houses will still be there, with some remaining for rent and others bought by owner occupiers.
What won't be there is the funding to repair them to the standards previously achieved. Also missing will be the army of "non-working landlords" who invest their time and money bringing very poor properties back onto the market.
In my 30+ years as an investor and developer I have renovated over 100 properties - ones that were often uninhabitable. Will I be doing more? No, I am selling up and exiting the PRS within the next 3 years.
I considered myself to be a good landlord. All my properties achieved a 5* rating from our local councils. I, like many others, am leaving the business now due to increased costs, decreased profitability and greatly increased danger of substantial losses if I can't reclaim a property in a timely manner.
I had a good run over the years, helped many families into good housing and made a lot of friends doing so. Yes, I made some money along the way but nowhere near what I could have made if I had screwed the tenants for everything I could. In other words, I was a typical landlord.
For those remaining in the business - goodbye and good luck.

Hugh Baily

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10:49 AM, 26th November 2024, About 4 weeks ago

Andrew I liked this so much I put my thumb up ten times. I have been in the business for 20 years and am sick of being hated by our politicians. They are entirely to blame for not ensuring an adequate supply of housing and destroying the market place. It is the tenants who pay the price.

Cider Drinker

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10:53 AM, 26th November 2024, About 4 weeks ago

Reply to the comment left by Downsize Government at 26/11/2024 - 10:30
I worked in a government department.

We compiled a risk register, produced a Monte Carlo simulation and the results wouldn’t have been acceptable to Whitehall so the boss told us to ignore the results and use a lower number. Bottles of champagne from the supplier seemed to sway his thinking.

It’s the same tip with projects like HS2. They work out a price and then decide what the government will accept to get the project started.

TheMaluka

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10:55 AM, 26th November 2024, About 4 weeks ago

There are fairies at the bottom of my garden, helping the government with its costings.

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