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Landlords Exit Private Rental Market Ahead of Labour’s Potential Reforms

British landlords are reportedly exiting the private rented sector in droves, listing their properties for sale as they brace for Labour’s first King’s Speech. According to claims from the website Guido Fawkes, the sector anticipates a wave of stringent measures that Labour has championed while in opposition, including a total ban on no-fault evictions.

Labour has pledged to outlaw Section 21 evictions from “day one” if they come into power, creating significant unease among landlords. The anticipated reforms have sparked concerns about the future viability of renting properties in the UK.

Guido Fawkes identifies several potential Labour measures that could drastically reshape the rental market:

  • Total Ban on No-Fault Evictions: Labour is expected to prohibit landlords from evicting tenants without a specific reason.
  • Introduction of Rent Caps: Shadow Chancellor Rachel Reeves has expressed support for capping rents, a move that could limit the amount landlords can charge.
  • Restrictions on Selling Properties: New rules could prevent landlords from selling their properties within the first two years of a new tenancy, extending the current restriction period by 18 months.
  • Family Occupancy Requirement: Landlords might be required to move a family member into a property for at least the first two years of a tenancy, up from the current six months.
  • Tenant Purchase Offers: Landlords could be compelled to offer tenants the option to buy the property instead of facing eviction.
  • Controversial Hardship Test: Courts may gain the power to deny possession orders if evictions would cause greater hardship to tenants than landlords, a measure expected to favour tenants.
  • Abolition of Persistent Rent Arrears Evictions: The new regulations might eliminate “persistent rent arrears” as a valid reason for eviction, affecting cases where tenants fall into two months of arrears at least three times.

With one in five UK homes currently in the private rental sector, these proposed reforms are anticipated to have a significant impact on housing supply. The uncertainty has prompted many landlords to reconsider their positions, potentially exacerbating the housing shortage.

As the sector awaits Labour’s formal policy announcements, the exodus of landlords signals a turbulent period ahead for the UK’s rental market.

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