People who invest in the stock market and ‘make a killing’ are not hounded by the press. Investors in much needed homes, are, on the other hand, often portrayed as villains! We are naturally encouraged to work and save for our retirement. Yes, we will receive a state pension but many hope to top this up with income from investments. Buy to Let is just one such investment; letting a property hopefully brings the landlord an income after all expenses have been taken into account. Those ‘expenses’ have recently been reduced with the removal of the ‘wear and tear allowance’ and the reduction of mortgage interest allowance.
Government must stop listening to certain tenant groups and listen to professional agents and landlords.
Does Government want the small private landlord to be completely wiped out and replaced only by large corporate landlords? If they continue on the current path and if this is their intention, they might succeed!
I believe that Government must stop listening to certain tenant groups and listen to professional agents and landlords. Surely housing must primarily be the responsibility of Government and not the PRS. More social housing must be built to replace those properties sold off and never replaced. In the private sector more small homes need to be built to cater for first time buyers and small families; a way must be found to build cheaper properties. I see building sites full of large detached houses rather than the smaller homes which are needed.
There has been a suggestion that landlords should not be able to sell their property while it is tenanted!
Where to next?
An investment landlord may need to liquidate funds, perhaps to supplement a pension; not to able to sell could be disastrous. Many investors are really happy to purchase a property with a tenant in situ; instant income and no void period. The tenancy simply continues as before.
Another suggestion is that landlords should not be allowed to serve notice on a tenant until three years have passed. This, without doubt, would be too restrictive for some landlords. Others would be thrilled to enter into a three-year tenancy – as I did this summer. There is this misapprehension that landlords are desperate to serve notice on their tenants. Absolutely not so! No landlord wants a void period; therefore the longer the good tenant stays the better.
We already have legislation (Deregulation Act 2015) prohibiting the service of a Section 21 Notice in a retaliatory eviction situation. This means that a landlord cannot simply evict the tenant who makes valid, reasonable requests for maintenance which are ignored and subsequently reported to the local authority who then serve a notice on the landlord. It has also been suggested that Section 21 should be abolished altogether taking us back to the ‘bad old Rent Act days’.
The good, the bad and the ugly
Some of the Government intervention however will be really good for the industry. Regulation of letting agents is well overdue. ARLA and other bodies have been pushing for this for many, many years. Client money protection and redress are also essential for the industry. It has been suggested that all landlords should also have to join a redress scheme. As with letting agents there are good landlords and bad landlords; with a redress scheme tenants would be able to put forward their complaint and many landlords may realise that they must ‘up their game’ or receive substantial fines.
It will be important however not to introduce too many new regulations within a short time frame. The industry has long campaigned for the introduction of electrical safety checks. How many times have I heard both agents and landlords tell me that ‘there is no law stating that I must have an electrical check’. There has always been legislation stating that the electrics must be safe; how does one do that? Have a formal electrical check by a professional! Simple. It will be good when this is enshrined in law as with gas, smoke and carbon monoxide detectors. The worry is that this will be yet another expense for landlords to bear just at the time when agents’ fees to landlords are likely to rise due to the tenant fees ban. These checks will have to be done every five years so hopefully by spreading the cost it may not be too painful. Safety should never be compromised.
Frances Burkinshaw is an experienced independent trainer available nationally for in-house or group training. 01892 783961 or 07887 714341 or email@example.com