Renters reform bill: Landlords speak out on new laws that could make evictions harder

The Government has unveiled the long-awaited Renters Reform Bill which will end the right of landlords to remove tenants using ‘no fault’ evictions.

If passed it would also make it easier for landlords to repossess their properties in cases of anti-social behaviour or rent arrears.

The bill, which is yet to go through its second reading in parliament, also boosts existing tenant protections against so called ‘backdoor’ evictions, for example by ensuring tenants can appeal against above-market rents designed to force them out.

The Renters Reform Bill has been met with scepticism from some landlords

Alongside the legislation the Government has announced plans to introduce an ombudsman that private landlords must join and the creation of a database of residential landlords and private rented properties.

The bill has provoked reactions from all sides. While tenant groups and homelessness charities such as Shelter have welcomed the reforms, questions have been raised about the adverse effects on landlords. 

Some fear that that once the bill becomes law there will be an exodus from the private rental sector as the changes plus increased tax on landlords in recent years and higher mortgage payments create too high of a burden.

We spoke to private landlords about the changes and whether they will leave the market as a result of the proposed legislation.

Viv Bridge, who has been a landlord for eight years and has several properties, is not fazed by the proposals.

‘I think it is a completely fair change that is taking place, in so much as it gives tenants much more security,’ he tells This is Money.

‘I think it is very good news. Why should well-prepared landlords be upset with well-paying tents giving them these rents?’

In addition to welcoming the increased tenant protections, he thinks the introduction of the ombudsman is a positive move. 

The Government claims this will make it faster and easier to resolve landlord and tenant disputes, without resorting to the overstretched court system.

However, while Bridge himself isn’t selling up as a result of the changes, he thinks there may be a flight of ‘accidental landlords’. 

This could reduce the number of houses available and ultimately lead to higher rents.

‘I think they would just think, I can’t be bothered with this, and stick to the day job,’ he says.

But he sympathises with landlords facing a slew of increased costs, for example higher mortgage rates and a bigger tax burden. He has not been immune from the difficulties. 

This year the mortgage costs on one of his properties increased by 66 per cent after his five-year fixed deal came to an end, taking his monthly payments from  £350 to £580.

‘Eviction changes worry me – so I’m retiring’

For Simon, who has been a landlord for 40 years the proposed legislation has brought forward his retirement plans. 

He has little time for the current Conservative Government who he says has made life harder for landlords and tenants as rents will rise when owners sell up.

‘Most of them have done Politics, Philosophy and Economics at Oxford. That includes economics, and you wonder if they’ve understood the basics. 

‘If you make something more difficult and more expensive people will leave the market – and the people that are left will be able to charge more.’

Reforms: Michael Gove, Secretary of State for Levelling Up, Housing and Communities, introduced the bill last week

He is particularly concerned about how easily landlords will be able to get their properties back without using no fault evictions, and puts little faith in the powers of the ombudsman.

‘For most small landlords that’s your life savings,’ he says. ‘So, you’re going to be wary who you let it to. 

‘You want a bit of certainty that you’re going to get it back and you’re going to get it back in a good condition.’

Marie Parris is chief executive of George Ellis property services, and a landlord in her own right. She believes more will exit the sector as a result of the tabled bill.

‘What will happen is there will be a shortage of properties and whenever there is a shortage that demand will go up and so rents will go up,’ she says.  

In her view the Government is only enacting the bill ‘as a way to say to generation rent “we have got your back”‘.

‘Michael Gove needs to hold a mirror up to himself and his Government, they are making it harder for landlords,’ Parris adds. 

She believes the legislation penalises good landlords by introducing measures to tackle the bad minority, when there are already tenant protections in place. 

‘[The Government is] out of touch of what really happens at grass roots level. I do not think any party is going to help landlords: they somehow think we are cash cows and hoarding loads of money by charging high rents. 

‘Most are just trying to keep their heads above water,’ she adds.

The legislation has been through its first reading in Parliament but still has a way to go before it becomes law

However,  the landlords we spoke to all agreed there is still much which is unknown about the bill and how it will operate in practice. 

For example, there is a provision allowing landlords to get their property back if they want to sell it – but the details of how this will work are still unclear.

Paul Tozer managing director at Regallis Associates Letting and Management, says fears about not being able to get the keys to a property back may be exaggerated. 

‘To be honest, it’s actually not that big a deal, it sounds worse than it is,’ he says. ‘As long as landlords can still have the right to give notice if they’re selling the property.

‘Most landlords are renting out in the long term, and if the tenant is being a good tenant and paying their rent normally the landlord wants to keep them there.’

It is a multitude of factors that are leading landlords to sell up, not just the proposed legislation, he says. 

Changes to mortgage interest relief, and the reduction of landlord allowances such as wear and tear and increased mortgages rates have all contributed to the exodus.

He says one of his clients is selling £7.5million of her property portfolio, leaving £4million still invested in the private rented sector.

‘The Government must finely balance the rights of tenants against providing sufficient support and certainty to the professional and institutional landlords in the private rented sector,’ says Eleanor Murray, a Partner at law firm CMS’ real estate team. 

‘Landlords now have less control over their own properties and a lack of clarity over the future of the landlord and tenant relationship. 

‘Clearly, the full impact of these measures cannot be assessed until the detail is revealed.’