Many smaller landlords are already moving away from property ownership following the enactment of the first phase of the Renters’ Rights Act, according to national financial advice firm Continuum.
The introduction of the Act has been the latest act of an ‘assault on landlords’, according to Continuum.
Phase 1 of the Renters’ Rights Act, which abolished Section 21 ‘no fault’ evictions, eliminated fixed-term tenancies and introduced limits on upfront rent and rent bidding, came into force on 1 May.
The changes have made it considerably harder for landlords to sell property. By abolishing Section 21 evictions, landlords must now use a specific Section 8 eviction ground and provide at least four months’ notice. Landlords cannot use this ground during the first 12 months of a tenancy.
A second phase due later this year will introduce a new Private Rented Sector Database and establish a Private Landlord Ombudsman to handle complaints.
Anthony Harris, Independent Financial Adviser at Continuum, said he is seeing a move away from property ownership particularly amongst older landlords who no longer see it as a good investment.
“The Renters Rights Act seems to be just the latest assault on landlords, and I am seeing a general move away from property ownership, particularly for small landlords.
As landlords get older, their appetite to deal with the ever-increasing burden of legislation and possible risks to them and their property, they are tending to consider selling up and simply investing the sale proceeds after paying any tax due.
There are investments available that keep the risk level down, but can provide similar ‘after tax’ income levels, without all the hassle associated with property ownership and very little risk of further legislation making life even harder.”
Anthony Harris, Independent Financial Adviser at Continuum
