Government proposals on renting reforms could improve the buy-to-let sector’s reputation, brokers have said, although a warning has been sounded on their effect on the investment appeal for landlords.
In yesterday’s Queen’s Speech (May 11) the government said it would ‘enhance’ the rights of those who rent, in addition to helping more people own their own home.
Measures proposed by the government in its policy paper included bringing forward reforms this year to drive improvements in rented accommodation standards, well targeted enforcement that drives out criminal landlords, and exploring the merits of a landlord register.
The government also said the reform package was expected to require all private landlords to sign up to a redress scheme for tenants.
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Ben Beadle said the government’s proposals amounted to some of the biggest changes in the private rented sector in 30 years.
Beadle added: “We welcome the government’s ambitions to drive out bad landlords from the sector without penalising those who do the right thing. We want to root out all those who bring the sector into disrepute.”
Bob Young likewise said “proportionate and fair” measures would benefit both tenants and ‘good’ landlords.
Young said: “For decades now a small minority of landlords have effectively got away with properties that are not suitable for habitation and as a buy-to-let lender we’ve seen some appalling examples of this.
“This minority is damaging the reputation of the vast majority of landlords who look after their properties and are responsive to their tenants’ requests.”
In its policy paper the government also said it would publish its consultation response on abolishing ‘no fault’ evictions and strengthening repossession grounds for landlords when they have valid cause.
Paul Brett commented: “There is an absolute need for landlords to be able to retake possession of their properties when circumstances dictate that they need to, but tying this with changes to drive up standards is the right thing to do.
“This will support responsible landlords, which in turn will enable them to help more tenants.”
In 2019 the then-government announced proposals to prevent private landlords from evicting tenants at short notice and without good reason before launching a consultation.
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Under section 21 of the Housing Act, private landlords can repossess their properties from assured shorthold tenants without having to establish fault on the part of the tenant.
Angus Stewart said: “Landlords have been bracing themselves for the Renters Reform Bill for some time now, so we welcome the fact we now have a way forward.”
Stewart added: “Landlords need to know they can take back properties when they have a legitimate reason for doing so and tenants need to be able to plan their futures.
“We should not forget mortgage lenders who will be looking for reassurance as to their rights as creditors. Getting the balance right will be crucial and as ever the devil will be in the detail.”
But Bulent Kandemir said the renters’ reforms come after private landlords have been “hit very hard” in the past few years, such as with restrictions to income tax relief.
Kandemir added: “I would question whether these landlords have the appetite to keep doing this going forward, as the profitability of owning a property to let is arguably no longer there.”
By Chloe Cheung
Source: FT Adviser
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