Rent reform will see nearly 1 in 5 landlords selling their properties
Research reveals that landlords are split over the government’s plans for the private rental sector but nearly one in five are looking at reducing their buy to let portfolio size because of the proposals.
The findings come from Total Landlord Insurance after the government published its White Paper - a Fairer Private Rented Sector that would see the abolition of section 21 evictions, not allowing a landlord to rent to a tenant with a pet without good reason, refusing to rent to tenants on benefits or with children and doubling the notice period for a rent rise.
Now the latest landlord survey shows that 60% of the UK’s landlords do not support the government’s planned abolition of section 21 evictions.
The survey also reveals that 57% of landlords oppose giving tenants the right to rent a property with a pet without refusing to do so with a good reason.
Landlords are against the plans in the White Paper
And 59% of landlords are against the plans in the White Paper that would make renting to tenants on benefits or with children illegal.
However, 60% of landlords support ending arbitrary rent review clauses for unjustified rent rises and 58% of landlords say they support plans to double the notice period when increases in rent are implemented with justification.
The findings also show that 89% of landlords support the creation of a new private rental sector ombudsman that would settle disputes in the sector.
And while 79% of landlords say they have no plans to increase or decrease their BTL portfolio any time soon, 17% say that the planned changes will lead to them reducing their investment portfolio size.
Just 4% of landlords say they have plans to increase their portfolio.
‘We’ve waited for three years to hear the government’s details’
The chief executive of Hamilton Fraser group that also includes Total Landlord Insurance, Eddie Hooker, said: “We’ve waited for three years to hear the government’s details on the proposed rental market reforms.
“And while it’s fair to say the latest plans are tenant focused, attempts to improve the sector are welcome and should improve standards for all.”
He added that the survey on landlord sentiment reveals that most are in favour of delivering better tenant protection and having a fairer playing field for the sector.
Mr Hooker said: “While landlords are happy to see tenant welfare increase, they are understandably protective of their portfolio and do not want to be powerless when removing rogue tenants or preventing damage to their properties.”
‘ Nearly one in five landlords are planning to sell their buy to let portfolio’
The managing director of Accommodation for Students, Simon Thompson, said: “News that nearly one in five landlords are planning to sell their buy to let portfolio is a worry and underlines the fears that many landlords have over the White Paper proposals.
“We have yet to see the full detail, but alarm bells will start ringing in government if landlords do leave the sector because along with fewer homes to rent, we will inevitably see rent rises.”
He added: “It’s important that landlords are consulted, and their fears are addressed over removing a tenant who may not be paying rent or causing anti-social problems.”
Most landlords cannot recoup costs for pet damage
Meanwhile, it has been revealed that most landlords struggle to recoup the costs incurred for pet damage - they say it is easier to get the costs for damage caused by adult tenants.
The research comes from the National Residential Landlords’ Association (NRLA) and Propertymark who say that the government is limiting the protection for landlords and reducing access to rented housing for tenants with pets.
The findings come after the government published its proposals for the private rented sector that would give tenants a right to rent a property with a pet and a landlord being unable to refuse without having a good reason.
However, the government also says that it will amend the Tenant Fees Act which will see tenants having to buy pet damage insurance to protect a landlord’s property.
Meeting the needs of tenants with pets
A campaign is now underway to ensure that the commitment to change legislation actually takes place and that pet insurance is designed for meeting the needs of tenants with pets, letting agents and landlords.
Propertymark’s head of policy and campaigns, Timothy Douglas, says that the research underlines what they and others in the sector have been warning about which is the reduced appetite from landlords for taking on a higher risk of damage under the Tenant Fees Act.
He said: “Demand for pet-friendly homes will continue increasing and the government must understand the costs involved for landlords and implement rules to support the sector to take on a greater risk to support more tenants who want to rent with pets.”
‘ Landlords prefer to let to tenants generally without pets’
The NRLA’s policy manager, James Wood, said: “It’s no surprise that landlords prefer to let to tenants generally without pets since many are unable to recover the costs for damage caused by them.”
He says that landlords with smaller portfolios are less likely to absorb the losses that will be caused by pet damage.
Mr Wood said: “It’s vital that agents and landlords have confidence they can recover repair costs if the government wants to increase the supply of pet-friendly homes.
“Amending the Tenant Fees Act to permit pet deposits or pet insurance would provide confidence and give more options to tenants with pets in the private rented sector.”