Ahead of the Renters’ Reform Bill, to be heard by MPs today, several mortgage and property experts have given their thoughts:
Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com: “These reforms, including the removal of no-fault evictions under Section 21, are very much to be welcomed. For too long, a minority of unscrupulous landlords have enjoyed all the benefits of renting out property without any of the responsibility. But make no mistake, the Government is only introducing them now because of what they have planned for us, namely build to rent on a massive scale. Our new landlords are to be faceless corporations, pension funds, insurance companies and private hedge funds. No doubt many of these ‘investors’ will be offshoring the profits. This is the Government’s surrogate policy for social housing and is why they’re doing everything in their power to drive the small or amateur landlord out of the market.”
Sophie Pollard, director of Brighton-based estate and lettings agency, MyHaus Brighton: “There is never going to be a one-size-fits-all solution that pleases everyone but there are huge parts of the Renters’ Reform Bill that are long overdue. It’s really important to improve the standards of rental properties and protect tenants from rogue landlords who allow their investments to fall into a state of disrepair. The substandard living conditions many tenants experience shouldn’t be acceptable for anyone, nor should needless discrimination. However, there are some positives that landlords can take away from all of this. Ombudsman services should be there to make disputes easier, as well as streamlined court processes and eviction procedures that will simplify the process when dealing with difficult tenants.”
Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages: “The Renters’ Reform Bill, while designed with the intent to protect tenants, may unintentionally exacerbate housing issues in the UK. By limiting landlords’ abilities to manage their properties, the legislation risks deterring investment in the private rental sector. Fewer rental properties due to landlord withdrawal, paired with rising demand, could result in inflated rents, exacerbating the very issue this Bill aims to address. Regulation is undeniably important for safeguarding against unfair practices, but a balanced approach is crucial. Overregulation may yield unintended consequences, potentially doing more harm than good.”
Lewis Shaw, founder of Teesside-based broker Riverside Mortgages: “Almost everyone seems to think that if landlords are forced to sell up because of the inability to manage their properties, this will reduce supply and send rents even higher. This is based on flawed thinking. It’s almost as though many commentators think each time a buy-to-let is sold, it vanishes from the stock of property available, thereby reducing total property supply, which it doesn’t. The number of homes remains equal. For every buy-to-let that is sold, it’s sold to either an owner-occupier or another landlord. If sold to a landlord, then it’s available to rent. If sold to a first-time buyer, that’s someone who isn’t renting and has potentially moved out of rental accommodation. This, coupled with the start of 100% mortgages, helps tenants who have been scalped for years by landlords get onto the property ladder. You might even consider the timing of 100% mortgages to be suspiciously convenient, with mortgage rates killing buy-to-let and renter reform making its debut.”
Rhys Schofield, managing director at Derbyshire-based mortgage advisers, Peak Mortgages and Protection: “You might think that as the proprietor of a firm that specialises in helping first-time-buyers, I’d be in favour of kicking landlords but I’m not. My fear is that if we continue to drive them out of the market, supply falls at a time when demand is growing, which just drives prices higher for tenants. Whilst reform is definitely long overdue, without a proper program of housebuilding running alongside to provide alternatives I think it will be completely counter-productive.”
Rob Gill, managing director at mortgage broker Altura Mortgage Finance: “While the Renters’ Reform Bill itself looks fair, sensible and measured, it comes on the back of years of regulation and tax increases that are making business increasingly tough for landlords. Private landlords are a crucial part of not just the property market but a functioning economy. The government needs to start redressing the balance so landlords have the means and incentives to carry on providing the high-quality property at fair rents that tenants deserve.”
Jonathan Burridge, founding adviser at hybrid mortgage adviser, We Are Money: “This is a good move for tenants and gives them greater protection for a fundamental need of tenure security. The number of properties owned for investment has doubled during the past decade, so, if the impact of this legalisation is a mass exodus of landlords it will mean more property available for owner occupiers and might see prices adjust. The exiting landlords will make a tidy profit and the state coffers will increase because of bumper CGT revenues. I don’t see a downside.”
Scott Taylor-Barr, financial adviser at Shropshire-based Carl Summers Financial Services: “For better or for worse, one thing that the new Bill does mean is that landlords now need sound advice more than ever: your letting agent, mortgage broker, legal adviser and tax consultant all become key to the success or failure of an individual buying a property to rent out. The worry is that many people will not be willing to seek out and pay for this advice, meaning that they will enter into legally binding long-term contracts without fully understanding their obligations and the constraints it places on them. More than ever landlords, new and old, need to proceed with caution and consult with professional advisers to ensure they know what they are getting themselves into.”
