BTL landlords plan to flee the market if legislative changes are introduced

A quarter private landlords plan to sell at least one property in their portfolio if Section 21 evictions are abolished due to concerns over tenancies

A new poll of more than 700 landlords gauged reactions to the government’s ‘Fairer Private Rented Sector’ white paper, which sets out a range of proposals – from removing Section 21 evictions and the creation of a landlord register.

The research carried out by The Mortgage Works, a specialist buy-to-let mortgage lender of Nationwide Building Society, found that just 22% of landlords were supportive of the proposal to scrap Section 21 evictions with many landlords concerned they could be left vulnerable to difficult tenancies.

If Section 21 was abolished, more than half – 56% – of respondents admit they will be more particular about the tenants they accept. This is an especially prevalent view amongst those landlords with larger portfolios with 62% of those with 20 or more properties saying they will be more particular.

Perhaps more concerning is that 25% of landlords admit they will sell some or all of their properties if this proposal happens. That rises to nearly a third 32% of those landlords with large portfolios of 20 or more properties.

Some 62% are supportive of a landlord register while 32% oppose the idea. Part of the lack of support may be because more than half of landlords – 53% – do not believe introducing a National Landlord Register will have any impact in deterring rogue landlords. That rises to two thirds – 66% – of landlords with 20 or more properties.

When asked why they do not believe the introduction of a National Landlord Register will deter rogue landlords, comments included:

“Rogue landlords have no concern about the law.”

“People who are desperate for somewhere to live will rent from unregistered landlords.”

“Rogue landlords don’t operate within the law now, so why would they join a register?

“Rogue landlords will always find a way to get away with their practices because there are not enough enforcement officers. There will always be the worst off in society who will settle for less than is lawful in legislation just to get a roof over their heads.”

According to the poll, the one area that most landlords were supportive about was around proposals for the Decent Homes Standard to cover private rental properties, with 83% of landlords supportive. More than two thirds – 68% – of those polled believe their properties already meet the new standard.

However, of those that will need to undertake work to bring the property up to standard, 56 per cent would use their savings to fund that work. However, around a third – 33% – admit they will be putting up the rent in order to improve the property if the minimum standards are ushered in.

Dan Clinton, director of landlord at The Mortgage Works, said: “We believe everyone should have a safe, secure and comfortable home, which is why we are committed to improving standards within the private rented sector. The proposals outlined in the Government’s white paper should serve to have a positive impact on housing quality and conditions for tenants.

“While landlords appear to be largely in favour of a National Landlord Register and Decent Homes Standard, it is revealing that one in four would consider selling in the event of Section 21 being abolished. This highlights the importance of listening to landlords’ concerns as these policies take shape, particularly when considering the broader set of regulatory changes already affecting them.

“A mutually beneficial private rented sector needs to offer tenants the security they will not be evicted without good reason, yet also provide landlords the confidence they can gain possession of a property quickly and efficiently if something does go wrong, such as anti-social behaviour. As a buy-to-let lender, we are keen to understand how the changes will be implemented, to ensure we fulfil our role of helping to balance the needs of landlords as well as tenants.”

 

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5 Comments

  1. JMK

    “…..scrap Section 21 evictions with many landlords concerned they could be left vulnerable to difficult tenancies, despite such evictions being the biggest single cause of homelessness in England.”

     

    No, No, No!  This is complete rubbish.  S21 is not a cause, it is a process.  The above statement is akin to saying a P45 is a cause for unemployment  and likely comes straight out of the Shelter manual for disseminating misinformation.  Causes are things like rent arrears, anti-social behaviour, etc.

     

    And the houses don’t stay empty, they become homes to other people so the net sum is zero.  S21 is not behind homelessness, and indeed the fact that landlords plan to quit if it is abolished goes to show it prevents it.

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  2. Will2

    JMK is of course right S21 did not and never caused homelessness that is the twisted thinking of the anti landlord brigade and manipulative spin put out by Shelter and the likes.  Is is fundenmentally dishonest.  In general terms landlords customers and income is from their tenants, so most will look after them as far as possible. However, if you have a rogue tenant they may well have a s21 served on them.  What Shelter and the Government have achieved is that S21 notices are now being served so landlords can leave the market and it is Government and Shelter that are driving homelessness.  Unfortunatly the media love a good story whether it is true of not, sensationalism is their aim – this is why they ALWAYS show condensation and mould which is often caused by the way tenants occupy a property such as not heating properly, not ventilating and drying washing indoors or using unvented dryers.

    The Government with Shelter’s backing are driving towards the cliff edge flat out and a major disaster  is about to happen – a massive car crash!!! Who will suffer? tenants, landlords will be irritated and many will sell. The remainers will vet their renters much more closely and take less risks. The benefit clients, the higher risk/ poor credit record tenants will be made homeless.  Councils will find it even harder to place tenants in the PRS.  The mad mad thing about all of this is it is self inflicted initiated by Shelter, The government and councils the very people who attack landlords and strangly the ones that need landlords. Biting the hand that feeds it!  The world is full of idiots with political fools seeking utopia, rather than living in reality.  There is no excuse there has been so much written since it was annouced S21 was to be abolished.  The consequencies have been printed in the professional press; Politicians are just selfish people who buy their votes to keep them in power irrespective of the consequences.

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  3. letstalk

    One of our landlords has marketed three this morning.

    2 other landlords marketed all of theirs last week.

    Well done Shelter, another own goal!

    I can truly say the only time we have used Section 21 is as an easy option to get rid of non paying/destructive or abusive tenants with the LLs consent or when a LL wants to sell.

    The scrapping of it is certainly, at this rate, going to be the biggest cause of homelessness at this rate and our bodies need to be singing this from the rooftops! Why is Shelter/Generation Rents rhetoric heard so much loader than that of our governing bodies all the time!!!

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  4. Woodentop

    This is a case of slamming the majority because of a minority rogue landlords, a minority who will continue to do it there way with the new regulations until caught and there isn’t much of that about.

     

    I thought charities were supposed to help? The short sightedness is actually creating severe difficulties for the people they claim to be championing.

     

    Abolition of Sec 21 raises the stakes from a medium risk landlord investment to a high risk. For decades I have watched good landlords leave the market once they get burnt by tenants. The future will be no different but the changes are made to make it more difficult to deal with the wheel coming off in a tenancy. Many landlords are already leaving the industry because of the scaled risks getting worse and to be expected some fall out. Wait till its all in place and it goes really pear shaped. Will we see an even greater mass exodus by landlords and little new investment? Only time will tell but you don’t need a crystal ball to see what a landlord will do once they get burnt.

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    1. A W

      Shelter “raised” £48.2 million in 20/21 and can you guess how much of that was used the help people in rent arrears or provide accommodation to the homeless…. £0.
       
      In my opinion the abolishment of section 21’s is just as important as the idiotic proposed periodic tenancies. It provides neither party with any security, which… wasn’t that the whole darn point?

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