Lettings agents affiliated with The Guild of Property Professionals have raised concerns about the potential consequences of the Renters Reform Bill, suggesting that it may lead numerous landlords to exit the market. Graham Wood, the managing director of Home Sales & Lettings, who has been a landlord for two decades and owned a lettings agency for over 15 years, argues that the bill has created a climate of fear among landlords, prompting many to sell their rental properties.
Wood points out that landlords have faced ongoing challenges over the past five years, including the removal of income tax advantages for buy-to-let mortgages and the threat, now a reality, of abolishing Section 21, which allows for easier possession of properties. According to Wood, this sustained assault on landlords has resulted in a surge of rental properties being sold, with approximately 10% of their managed properties being sold in the last 18 months. Wood predicts this figure will rise to 15% by the end of 2023, a trend that he believes is widespread across the UK. The dwindling supply of rental properties has caused rents to increase sharply, placing the burden on tenants due to ill-conceived legislation, Wood argues.
Simon Davies, the branch manager of Norman F Brown in Bedale, Hawes, and Leyburn, acknowledges the portrayal of the Renters Reform Bill as beneficial for tenants and detrimental to landlords. However, Davies emphasizes that the devil lies in the details, which have yet to be announced, causing anxiety among landlords. While Davies anticipates positive outcomes for both landlords and tenants, he highlights concerns regarding the elimination of Section 21. Nevertheless, he asserts that mechanisms for swift possession, such as property sales, addressing anti-social behavior, or a landlord’s need to move back in, will remain available. Unless the government provides clarity soon, Davies fears that landlords may be deterred by uncertainty and choose to sell their properties, further reducing the supply and driving rents even higher.
Alex Umut Sevinc, the head of operations at Filey Properties, has found that landlords he has spoken to primarily perceive the Renters Reform Bill as a ban on Section 21. Some landlords even express fears that the bill will grant tenants the ability to purchase the property from the landlord, although Sevinc deems this speculation for now. Additionally, many landlords are anxious about the mention of rent freezes or limits on rental increases, particularly given rising interest rates, maintenance costs, and tax implications.
Sevinc highlights landlords’ concerns regarding the lengthy eviction process, currently taking up to nine months in cases of “accelerated possession.” Landlords are apprehensive about the duration and grounds for the new style of eviction under the bill. Sevinc also notes that the introduction of a Property Portal for Landlords is perceived by many as a potential source of increased charges, as landlords have already faced the imposition of selective licensing in the boroughs they operate in, further penalizing compliant landlords.