Landlords Express Concern Over Upcoming Renters’ Reform Bill

On the cusp of the Renters’ Reform Bill’s second reading in the House of Commons this coming Monday, October 23, a fresh survey reveals significant apprehension within the landlord community. The Simply Business Landlord Report, which encompasses the perspectives of 1,455 UK landlords, highlights that more than half (54%) are contemplating exiting the market due to the looming legislative changes.

A key point of contention is the proposed abolition of Section 21 evictions, a reform that one in five landlords pinpoint as especially off-putting. Additionally, the prospective mandate for landlords to permit tenants’ pets, barring “good reason” for refusal, has not been well-received. More than half of the survey’s participants (54%) predict this particular rule will heighten the risk of property damage, prompting 53% to brace for intensified property inspections and more stringent tenancy agreements.

An Essex-based landlord, Hayley, shared her experiences and concerns: “With regards to pets, I have always been open to having pets within reason. It depends on the tenant and what type of pet owner they are, number of pets and size, and the type of property being let. I do not believe it should be made compulsory as there are much greater factors to be taken into consideration which should ultimately be the landlord’s choice. I have had 3 tenancies where pets have been allowed. 2 were fantastic. 1 however, ended up going from 1 small dog to 3 (including a German shepherd) and totally destroyed the property. At the time, I took it as part of being a landlord and moved on, but in today’s climate it would be very hard to swallow.”

Despite the bill’s intention to empower landlords with stronger repossession rights in instances of antisocial behaviour or consistent rent arrears by tenants, there remains a strong undercurrent of skepticism. About 63% foresee obstacles in reclaiming possession of their properties, and a significant majority (66%) expect the incoming changes to be both costlier and more time-consuming to enforce.

Alan Thomas, UK CEO at Simply Business, provides his insights: “A combination of economic uncertainty, changing regulations, and rising costs means there’s no shortage of challenges facing the nation’s landlords in 2023. The cost of living crisis has affected all corners of society, and the buy-to-let sector is no different. Insuring more than 300,000 landlords allows us to gain first-hand insight into the integral role they play in the housing market, plus the challenges they’re facing. It’s important that landlords are given the time and information they need to prepare for significant upheaval in the coming years, so they can continue to provide much-needed housing for almost five million households nationwide.”

Yet, not all outlooks are bleak. Many landlords, including Paul from Warrington, still advocate for real estate investment: “We originally invested in property as a long term savings opportunity, with a plan to either re-invest the profits into further property or to invest elsewhere. With the current financial situation, we’re actually finding that we are using some of the rental income to top up our regular income to help towards childcare and other high ticket expenses, so our property investment has helped us in that regard. We were lucky in that we agreed 5 year fixed rate mortgage terms so still have a few years across all properties to hopefully ride out the interest rate increases.”

For more insights and details, the full UK Landlord Report by Simply Business can be accessed here: https://view.simplybusiness.co.uk/landlord-report/p/1.