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I've been on both sides of the fence and I'm the same.
The landlords I've resented are the ones who've screwed me over and been allowed to get away with it. One went in after I'd left and damaged things that weren't damaged when I left; they withheld my deposit and, as it was before the protection scheme, the costs of recovering the money would have far outweighed the amount lost. The other one was a hobby landlord who expected a house to be pristine after a year of living in it, but luckily there was an independent check in and check out which found all the issues to be fair wear and tear. I resented paying for the check in but that £70 ultimately saved me a couple of grand in arguments.
I have one property rented out, an inheritance that we've kept rather than take the hit on Capital Gains Tax by selling it. The tenants are amazing, there's no mortgage, and so we've not put the rent up in five years. They're getting a bargain now the railway to that town has opened but we're happy with them so why take the risk of a void period? Even a two month void would wipe out any extra money we'd make.
I can understand the principle of it, but the tax rise of two percentage points is negligible in the grand scheme of things. On a £1000/month net yield it's only an extra twenty quid a month tax. I'm not going to sell a £200,000 house because I have to pay an extra fiver a week. I'm not sure that anyone thinking rationally would, not once they factor CGT into everything.
Your logic is correct, it's just the interference again by London over something that I have no control over.
We are controlled by people we have no connection with unlike the Scots are, our Parliament is toothless when it comes to things like this.
There are costs to incorporation, not least Capital Gains Tax and Stamp Duty, so people doing it need to weigh up the pros and cons. For big landlords it has always made sense, more so since the changes to how mortgage interest was treated for income tax purposes, but I'm not sure it makes much sense for smaller landlords.
If you're buying a new investment property then incorporating may well make sense, but if you already own them then it probably won't.
Stamp Duty was about 4 years' worth of Income Tax now that the mortgage relief went. CGT makes things much harder for smaller landlords. Landlords with more properties to incorporate will have found legislation to help them. It struck me that the changes were basically to drive property to those who could justify incorporation and out of the "normal" populace.
I suspect we will see more smaller landlords exit because of the cost of incorporation. However, a lot then depends on how many incorporated landlords are going to buy up the properties that come to market.
Whether this move to incorporation is a good thing I am unsure. I am not sure I share @Bletchleyite opinion on who the best landlords are. I tend towards business motivated landlords being worse than well meaning landlords hoping to supplement their pensions.
The business landlords I’ve had were a lot more straightforward to deal with. It was a business relationship, they had realistic expectations, they had no emotional attachment to the property, and so you knew where you stood. Repairs were always as cheap as possible but they were done. But I’ve not had to deal with the HMO/slum landlord end of the market.
The hobby landlords I’ve had have been much more of a mixed bag. One I referred to above bought the flat for their kids and rented it out whilst the kids went travelling; they had an emotional attachment to the flat and were a nightmare to deal with. But others have been the exact opposite, letting us treat the property as though it was our home in the same way they would (e.g. letting us get a pet for no extra money).
Whether this move to incorporation is a good thing I am unsure. I am not sure I share @Bletchleyite opinion on who the best landlords are. I tend towards business motivated landlords being worse than well meaning landlords hoping to supplement their pensions.
I don't think I'd say either is better or worse directly, but I would say that a landlord who is in it for quick financial wins (i.e. a month to month yield) is probably going to be worse on balance because they are far more strongly motivated to penny pinch, either from skimping on maintenance, retaining deposits unfairly (e.g. expecting a tenant to leave a property in perfect condition after living in it for ten years*) or just being super-picky about tenants. A landlord who's in it to own a property outright after 25 years of someone renting it is going to care less about whether they have to pay for small things, replace the boiler etc is just going to be more reasonable because they're thinking of the house they'll own outright at the end despite only having had to put maybe 20 grand into it over its ownership for new boilers and the likes (plus once paid off they pocket basically all the rent bar maintenance costs). The latter sort of landlord isn't going to be put off by any of these new measures, because if you get a house outright for 25 grand rather than 20 (say) that's still good.
* Had that. I'd actually moved out before the end of the notice period (I deliberately overlapped it with my house purchase so I could move at my leisure a bit at a time) and they sneaked in and started to refurbish it, and I caught them out when I popped back to check on the property as was my responsibility until the tenancy actually ended, so I invited them to either get everything back out and wait for the end of the tenancy to start works again or cough up my deposit, so they did the latter and I gave them the keys.
Absolutely. That’s exactly why George Osborne made the change.
It’s hard to compare.
The business landlords I’ve had were a lot more straightforward to deal with. It was a business relationship, they had realistic expectations, they had no emotional attachment to the property, and so you knew where you stood. Repairs were always as cheap as possible but they were done. But I’ve not had to deal with the HMO/slum landlord end of the market.
The hobby landlords I’ve had have been much more of a mixed bag. One I referred to above bought the flat for their kids and rented it out whilst the kids went travelling; they had an emotional attachment to the flat and were a nightmare to deal with. But others have been the exact opposite, letting us treat the property as though it was our home in the same way they would (e.g. letting us get a pet for no extra money).
Whilst I am a Conservative voter, it is because I believe in a lower tax, lower government system. Sadly, policies like the landlord taxation changes were not about either of those things. On the other side Osborne was leading Northern Powerhouse and actually had plans that would have transformed the area. Orange book Liberal Democrats like Clegg would be good, but too often it is the old Social Democrat arm of that party which dominates.
I never expected Labour would do anything to redress the balance, and indeed we have another policy that favours larger landlords.
My point about business versus smallscale private was more driven by the student landlords my friends experienced. I stayed in halls of residence and Manchester were a good landlord.
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I don't think I'd say either is better or worse directly, but I would say that a landlord who is in it for quick financial wins (i.e. a month to month yield) is probably going to be worse on balance because they are far more strongly motivated to penny pinch, either from skimping on maintenance, retaining deposits unfairly (e.g. expecting a tenant to leave a property in perfect condition after living in it for ten years*) or just being super-picky about tenants. A landlord who's in it to own a property outright after 25 years of someone renting it is going to care less about whether they have to pay for small things, replace the boiler etc is just going to be more reasonable because they're thinking of the house they'll own outright at the end despite only having had to put maybe 20 grand into it over its ownership for new boilers and the likes (plus once paid off they pocket basically all the rent bar maintenance costs). The latter sort of landlord isn't going to be put off by any of these new measures, because if you get a house outright for 25 grand rather than 20 (say) that's still good.
* Had that. I'd actually moved out before the end of the notice period (I deliberately overlapped it with my house purchase so I could move at my leisure a bit at a time) and they sneaked in and started to refurbish it, and I caught them out when I popped back to check on the property as was my responsibility until the tenancy actually ended, so I invited them to either get everything back out and wait for the end of the tenancy to start works again or cough up my deposit, so they did the latter and I gave them the keys.
I cannot comment on your individual experiences, but sounds like you came across a bad landlord.
The costs are much higher than boilers though, because windows go and regular refurnishing is not cheap. I suspect there are many landlords who don't fix things, but there are many like me who do. As I say I never target profit.
A good piece of advice I was given when first looking to buy-to-let was that happy tenants give you much more profit than unhappy ones. Whether that is avoiding empty periods, the fact the tenant will take care of the house, or even stay longer, there was never a benefit in upsetting the tenant. In the lower inflation days the advice was never to increase rent whilst a tenant was in and then simply bring it back to market rate for the next let. These days £0 increase is a bit hard to manage, but leniency has definitely helped over the years.
There is a lot of diversity of experience out there. I just think the government would be better focused on the bad landlords rather than riding the stereotypes to push out those who are consciencious.
I find myself somewhat despairing that backbench MPs were cheering tax rises. Tax is necessary to fund society and sometimes it needs to go up. But I struggle to see why that's something to celebrate...
I find myself somewhat despairing that backbench MPs were cheering tax rises. Tax is necessary to fund society and sometimes it needs to go up. But I struggle to see why that's something to celebrate...
I think the abolition of s.21 will do that. My experience, working for the likes of Shelter and Citizens Advice in the past, is that the good landlords don’t use s.21 very often at all. It almost entirely seemed to be the preserve of the more dodgy landlords. Sometimes it was retaliatory but often it was used in situations such as when a tenant became unemployed or became pregnant.
I can understand why landlords would be nervous in that situation and I have sympathy with them, especially given how useless the DWP are when it comes to assessing UC claims quickly. But it is wholly unacceptable to evict someone from their home just because you’re worried that they potentially might not pay their rent or might have a new baby in the property.
Perhaps. But it felt like a knee-jerk with no consideration of the negative impact of increased taxes. All a bit "student politics". (To be clear, I have little time for the other side's knee-jerks too....)
Perhaps. But it felt like a knee-jerk with no consideration of the negative impact of increased taxes. All a bit "student politics". (To be clear, I have little time for the other side's knee-jerks too....)
Perhaps. But it felt like a knee-jerk with no consideration of the negative impact of increased taxes. All a bit "student politics". (To be clear, I have little time for the other side's knee-jerks too....)
Although Labour can be pleased to pass Labour measures, it is important that elected representatives do not celebrate the fact they are inflicting pain on others.
The same completely applies to Tories cutting welfare.
Perhaps. But it felt like a knee-jerk with no consideration of the negative impact of increased taxes. All a bit "student politics". (To be clear, I have little time for the other side's knee-jerks too....)
They can still choose to take the house back to sell it or live in it themselves, though (the latter deals with needing a fixed term because you're renting out while going abroad on a fixed term contract, for example).
Except once you regain possession under this ground, you are not allowed to rent again for one year - which seems pretty punitive.
In my view it's also unfair and unnecessary that the change in legislation has been retrospective - if you as a landlord agreed a 3-year contract in good faith with your tenant, your expectation that this contract would come to an end has been scrapped. Would have been better to have outlawed fixed-term agreements from the date of the legislation.
Well again, good landlords will need to look to bad landlords. If there was not some manner of harsh restriction on using that ground we all know that all that would happen is that the landlord would seek possession under the ground, be granted it and then suddenly the deal would fall through or the family member would no longer need the property. I'm sure there are plenty of decent landlords who wouldn't abuse that ground in that way. But if all landlords were like that we wouldn't even be here with this change in legislation anyway...
That being said we'll see how effective it actually is as enforcement is going to sit within Local Authorities who are well known for having plenty of resources to get involved in even more work.
Not at all. Without that clause you’d evict the tenant on the basis that you wanted to move in, then the next day you would‘change your mind’ and decide you didn’t want to move in after all and find a new tenant after jacking up the rent. Knowing there would be no sanction.
I sssume youve never encountered people who are past masters at running rings round the bureaucrats and the law and think nothing of doing so. It’s their antics that mean the honest person gets penalised or prevented from genuinely changing their mind. They are the people to blame, not the politicians trying to devise a system that might vaguely work.
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Well again, good landlords will need to look to bad landlords. If there was not some manner of harsh restriction on using that ground we all know that all that would happen is that the landlord would seek possession under the ground, be granted it and then suddenly the deal would fall through or the family member would no longer need the property. I'm sure there are plenty of decent landlords who wouldn't abuse that ground in that way. But if all landlords were like that we wouldn't even be here with this change in legislation anyway...
That being said we'll see how effective it actually is as enforcement is going to sit within Local Authorities who are well known for having plenty of resources to get involved in even more work.
If there was not some manner of harsh restriction on using that ground we all know that all that would happen is that the landlord would seek possession under the ground, be granted it and then suddenly the deal would fall through or the family member would no longer need the property
If there was not some manner of harsh restriction on using that ground we all know that all that would happen is that the landlord would seek possession under the ground, be granted it and then suddenly the deal would fall through or the family member would no longer need the property
There definitely needs to be some restriction / enforcement against false use, but 12 months is very long. The Lords tabled an amendment (which was narrowly unsuccessful) to reduce this to 6 months, and this would have been a reasonable balance of deterrence (6 months' lost rent) while also allowing for genuine changes (moving in then getting a new job, family member moves in but dies, trying to sell the house but not succeeding, etc).
Even if we don't have sympathy for the landlords' difficulties in the case of genuine changes in circumstances, it's hard to see the benefit of keeping a rental property off the market for an extra six months compared to a lesser waiting period (again, fully agree there needs to be one). Obviously, some "pretext" evictions will be averted by 12 months as compared to 6 months, so we can all agree that's a benefit, but this won't be a huge amount given that 6 months is already a deterrent, and I don't think it will exceed the number of properties pointlessly sitting empty because people's circumstances changed.
Obviously, some "pretext" evictions will be averted by 12 months as compared to 6 months, so we can all agree that's a benefit, but this won't be a huge amount given that 6 months is already a deterrent, and I don't think it will exceed the number of properties pointlessly sitting empty because people's circumstances changed.
Six months isn't that much of a deterrent, though. By the time your tenant has moved out, you've had new carpets fitted, you've had the property painted, and you've found a new tenant, that can easily be two months. So the 'deterrent' aspect is only 3-4 months and that's little more than a cost of doing business.
As for changes of circumstances, I'm sure there will be edge cases where there is a genuine change of circumstances outside the control of the landlord. But these will be rare. Landlords should really only be turfing tenants out of their home if the landlord has finalised their plans.
In my view it's also unfair and unnecessary that the change in legislation has been retrospective - if you as a landlord agreed a 3-year contract in good faith with your tenant, your expectation that this contract would come to an end has been scrapped.
It isn't completely retrospective, the change doesn't take effect until May 2026. Until then, the existing law applies, including the use of s.21.
It will be a mandatory ground for eviction that you wish to sell the property or you wish to move in yourself. But, obviously, this needs to be a genuine wish to sell the property or move in yourself.
But if those two categories don't apply then why does it matter that there is no longer a fixed term to the tenancy?
A story on the BBC News at 10 about a macro-economic policy won't be delivered by a journalist with an economics brief but by Chris Mason for instance.
As for changes of circumstances, I'm sure there will be edge cases where there is a genuine change of circumstances outside the control of the landlord. But these will be rare. Landlords should really only be turfing tenants out of their home if the landlord has finalised their plans.
If the fixed term contract ends after 1 May 2026, then the use of S21 is not possible since it is prevented by the contract. (The same contract which is ignored in favour of the tenant in respect of the agreed end date). The new grounds for possession are not nearly as straightforward, requiring additional notice and evidence. Not objecting to this, but it is certainly a retrospective change for those who agreed fixed term tenancies which they do not have the opportunity to avoid by exercising S21 early.
Additionally, consider the example of a fixed term tenancy ending in mid-August 2026. If a S21 is issued before 1 May 2026, it can't be exercised until after the fixed term contract ends, but under the transitional arrangements all S21 notices that haven't been exercised expire on 1 August 2026. A new ground for sale possession notice would therefore need to be served on 1 May 2026, but this requires 4 months' notice. So this has had the effect of lengthening the tenancy even though a valid ground for possession is held and it was planned in advance, purely as a result of this transition - which feels unfair. S21 should have remained valid for a bit more than the new notice period; by not doing this a gap has been created worsening the position of landlords with fixed term contracts.
Whichever way you look at it, it's 6 months' lost rent compared to keeping the tenants. You have to ask why a landlord would evict a tenant without a ground for sale or occupation - the main reason I can think of is to relist the property for a higher rent or different tenant type. It would take an exceptional rental increase to offset 6 months of earning nothing (and not even being able to offset expensed costs). Do you have an example of where a landlord would find it worth evicting a tenant for no reason and waiting six months?
Conversely, 4-5 months is often how long it takes to discover that selling a property is not viable; this is often a property that ends up going back on the rental market but instead the landlord will have to wait out the full year. Given that the reforms will reduce the supply of rental properties in the first place, a measure to arbitrarily prevent properties from being rented for an unnecessary long time seems really harmful to future renters.
Conversely, 4-5 months is often how long it takes to discover that selling a property is not viable; this is often a property that ends up going back on the rental market but instead the landlord will have to wait out the full year. Given that the reforms will reduce the supply of rental properties in the first place, a measure to arbitrarily prevent properties from being rented for an unnecessary long time seems really harmful to future renters.
All this making it more complicated, more bureaucratic,more expensive for landlords mean a lot of them will leave the market and sell up, decreasing the rental market. Or am I missing something?
All this making it more complicated, more bureaucratic,more expensive for landlords mean a lot of them will leave the market and sell up, decreasing the rental market. Or am I missing something?
Diverting for a moment, if I may, to another aspect of Reeves's budget. Setting aside questions of manifesto promises and how binding they are, would it not have been fairer to restore linking of the tax thresholds and raise the money needed by even quite a significant jump in tax-rates? The Chancellor has talked a lot about those with the broadest shoulders paying a little more, but doesn't the way she's chosen to do things actually hit lowish and middle-income earners significantly harder than high earners (in a budget which in any case has done very little to ask the really rich to pay more)?
And on a different topic, has anyone else been struck by the odd way in which Labour politicians talk about the NHS? It's always "our NHS" not spoken normally with low stress on the first word and full stress on the initialism but spoken with a strong stress on both elements, trying to bring out strongly the notion of possession?
All this making it more complicated, more bureaucratic,more expensive for landlords mean a lot of them will leave the market and sell up, decreasing the rental market. Or am I missing something?
It started for me with Theresa May’s “right to rent” in 2014 and has carried on since then. Landlords have been seen as cash cows by the government, starting with George Osborne soon after. The main benefit to landlords remains as the capital appreciation of the property value. Anyway, I sold up in 2014, I’d had enough. More landlords will likely follow, yes, but whilst property values continue to increase I suspect many won’t.
PS The capital appreciation of my former property was huge after I’d sold it. C’est la vie.
And on a different topic, has anyone else been struck by the odd way in which Labour politicians talk about the NHS? It's always "our NHS" not spoken normally with low stress on the first word and full stress on the initialism but spoken with a strong stress on both elements, trying to bring out strongly the notion of possession?
There was a Yes Prime Minister episode where Jim was preparing a broadcast to the nation about possibly scrapping Trident, and he was advised not to say "YOUR tax bill", as it made him sound like a ruler talking to the ruled, suggesting "OUR tax bill instead". You could say the same regarding "our NHS". If they said "Your NHS", it would sound like they're all wealthy private healthcare users (which is probably true for a number of them).
All this making it more complicated, more bureaucratic,more expensive for landlords mean a lot of them will leave the market and sell up, decreasing the rental market. Or am I missing something?
It's the bad landlords who will sell, and they'll increase the amount of properties for sale, keeping prices down. This is a very good thing.
The rental market is too large and has driven big sale price rises in recent years as property became more of an investment than something you buy to live in.
Diverting for a moment, if I may, to another aspect of Reeves's budget. Setting aside questions of manifesto promises and how binding they are, would it not have been fairer to restore linking of the tax thresholds and raise the money needed by even quite a significant jump in tax-rates? The Chancellor has talked a lot about those with the broadest shoulders paying a little more, but doesn't the way she's chosen to do things actually hit lowish and middle-income earners significantly harder than high earners (in a budget which in any case has done very little to ask the really rich to pay more)?
Indeed, I think we've had this issue of doing things like freezing tax thresholds, which has taken the higher rate from something that only impacted the top few percent of earners, to something that impacts (senior) nurses, teachers and electricians. That's not necessarily a problem in itself, but I think the surrounding perception hasn't really changed to fit this new reality.
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