Renters reform bill: Landlords speak out on new laws that could make evictions harder

The government has unveiled the long-awaited tenant reform bill, which will end landlords’ right to evict tenants through ‘no fault’ evictions.

If passed, it would also make it easier for landlords to repossess their properties in the event of anti-social behavior or rent arrears.

The bill, which still has to pass second reading in parliament, also strengthens the protection of existing tenants against so-called ‘back door’ evictions, for example by ensuring that tenants can appeal against rents that are above the market price and that intended to drive them away.

In addition to the legislation, the government has announced plans to introduce an ombudsman for private landlords to join and the creation of a database of landlords and private rental properties.

The bill has provoked reactions from all quarters. While tenant groups and homelessness charities such as Shelter have welcomed the reforms, questions have been raised about the detrimental impact on landlords.

Some fear that once the bill becomes law there will be an exodus from the private rented sector as the changes plus increased taxes on landlords in recent years and higher mortgage payments create an undue burden.

We spoke to private landlords about the changes and whether they will leave the market as a result of the proposed legislation.

Viv Bridge, who has been a landlord for eight years and owns several properties, is not impressed by the proposals.

“I think it’s a totally fair change that’s happening in the sense that it gives tenants a lot more security,” he tells This is Money.

‘I think it’s very good news. Why should well-prepared landlords be annoyed by well-paid tents giving them these rents?’

Besides applauding the increased protection of tenants, he sees the introduction of the ombudsman as a positive step.

The government claims this will make it faster and easier to resolve disputes between landlord and tenant, without resorting to the overburdened legal system.

While Bridge isn’t selling himself as a result of the changes, he thinks there may be a flight of “accidental landlords.”

This can reduce the number of available homes and ultimately lead to higher rents.

“I think they would just think, I can’t be bothered about this, and stick to their day job,” he says.

But he sympathizes with landlords facing a slew of rising costs, such as higher mortgage rates and a greater tax burden. He has not been immune to the difficulties.

This year, mortgage payments on one of his properties rose by 66 per cent after his five-year fixed deal expired, taking his monthly payments from £350 to £580.

‘Employment changes worry me – so I’m retiring’

For Simon, who has been a landlord for 40 years, the proposed legislation has brought forward his retirement plans.

He has little time for the current Conservative government, which he says has made life more difficult for landlords and tenants as rents will rise as owners sell.

‘Most of them studied political science, philosophy and economics at Oxford. That includes economics, and you wonder if they’ve got the basics.

“If you make something harder and more expensive, people will leave the market – and the people who remain can ask for more.”

He is particularly concerned about how easily landlords can get their properties back without resorting to evictions, and has little faith in the ombudsman’s powers.

“For most small landlords, that’s your savings,” he says. “So you’ll be wary of who you let.

“You want a little assurance that you’ll get it back and that you’ll get it back in good condition.”

Marie Parris is chief executive of George Ellis property services, and a homeowner. She thinks more will leave the sector as a result of the proposed bill.

“What will happen is there will be a shortage of properties and when there is a shortage demand will increase and so rents will rise,” she says.

According to her, the government is only implementing the bill “as a way of saying to the generation rent ‘we’re with you.'”

“Michael Gove needs to hold up a mirror to himself and his government, they are making it harder for landlords,” Parris added.

She believes that the legislation penalizes good landlords by taking measures to deal with the bad minority, when tenant protections already exist.

‘[The Government is] beyond the scope of what is actually happening at the grassroots level. I don’t think any party is going to help landlords: somehow they think we’re cash cows hoarding tons of money by charging high rents.

“Most are just trying to keep their heads above water,” she adds.

However, the landlords we spoke to all agreed that much is still unknown about the bill and how it will work in practice.

For example, there’s a provision that allows landlords to get their property back if they want to sell it – but the details of how this would work are still unclear.

Paul Tozer, managing director of Regallis Associates Letting and Management, says the fear of not getting the keys back to a property may be overstated.

“To be honest, it’s not really that much, it sounds worse than it is,” he says. ‘If only landlords have the right to cancel when they sell the property.

“Most landlords rent long-term, and if the tenant is a good tenant and pays his rent normally, the landlord wants to keep him there.”

It’s a multitude of factors that push landlords to sell, not just proposed legislation, he says.

Changes in mortgage interest deductions, reductions in landlord taxes such as wear and tear, and increased mortgage rates have all contributed to the exodus.

He says one of his clients is selling £7.5 million of her property portfolio, leaving a further £4 million invested in the private rental sector.

“The government needs to strike the right balance between renters’ rights and providing adequate support and security to the professional and institutional landlords in the private rental sector,” said Eleanor Murray, a partner in the real estate team at law firm CMS.

‘Landlords now have less control over their own real estate and uncertainty about the future of the landlord-tenant relationship.

“It is clear that the full impact of these measures cannot be assessed until the details are known.”