Landlords - are you selling up or will do when your tenants leave?

theartfullodger

chrisw said:

Uriziel said:

I have looked at the bill now and I would definitely sell if I was a landlord. You essentially lose all ownership of the flat. If you have been a kind landlord and kept the rent down you would not be able to raise it to market value so you will always lag behind. I don't see why anyone would keep renting out. You will also not be able to ask them to leave and sell the property. It says you need to give a legitimate reason, which is what? If it goes to court they will side with the tenants. If you tell them you need it for your family they'll probably tell you that your family can rent elsewhere. If you need them to move so you can sell you will be told that the tenants can stay until you find a buyer or even until the buyer has a completion date which will put off most buyers.

There will be no problem increasing the rent to the market rate. The only new issue will be that there's no back dating if the tenants appeal.

There's no problem tenants proposing rent reductions i...

ReadySteadyPop

Albermarle said:

Though this answer is too simple, in my opinion. Firstly, we must consider that the property isn't being knocked down, it is being sold to someone else. The new owner may rent it out, they may have rented previously but have bought this house, etc. Secondly, even if we ignore this and assume the houses on the market will have no effect on rental demand, we could apply supply and demand economics again to realise that an increased supply of houses on the market might cause house prices to go down. You could then consider that if house prices were to decrease, whether that would have an impact on rents.

Could also be that if more properties come on the market and prices decrease, more people currently renting could afford to buy their own home. So less rental demand.

https://www.zoopla.co.uk/discover/property-news/rental-market-report/

Point 2 from "Key-Takeaways" has only just started IMO.

Bodicea

I’ve lived in social housing for over 40 years and inherited a rural house from my late mother, which I’ve been renting out—separately from my own flat. The rent barely covers my flat’s costs, and owning the property means no benefits for me. I planned to hold onto it until retirement, then decide whether to sell or keep it as a small investment.

I’ve had all sorts of tenants—good and bad—and for the past five years had a great family renting. But with the Renters Reform Bill, it’s not just the end of Section 21 that’s the problem. The new requirements—like landlord registration and meeting the Decent Homes Standard (which even my own social housing landlord fails to meet)—are overwhelming. There’s hypocrisy everywhere: my own landlord leaves flats empty for a year during a housing crisis.

The real shock came when my tenants gave notice. I thought I’d simply re-let the house, but now, under the Bill, I can’t evict tenants for 16 months, and if I serve a 4-month notice to sell but then change my mind, I’m barred from renting the property for 12 months. I’ve lost the security I relied on and am now forced to sell—reluctantly. It feels like this government doesn’t want good landlords to stick around.

monkey-fingers

Bodicea said:

I’ve lived in social housing for over 40 years and inherited a rural house from my late mother, which I’ve been renting out—separately from my own flat. The rent barely covers my flat’s costs, and owning the property means no benefits for me. I planned to hold onto it until retirement, then decide whether to sell or keep it as a small investment.

I’ve had all sorts of tenants—good and bad—and for the past five years had a great family renting. But with the Renters Reform Bill, it’s not just the end of Section 21 that’s the problem. The new requirements—like landlord registration and meeting the Decent Homes Standard (which even my own social housing landlord fails to meet)—are overwhelming. There’s hypocrisy everywhere: my own landlord leaves flats empty for a year during a housing crisis.

The real shock came when my tenants gave notice. I thought I’d simply re-let the house, but now, under the Bill, I can’t evict tenants for 16 months, and if I serve a 4-month notice to sell but then change my mind, I’m barred from renting the property for 12 months. I’ve lost the security I relied on and am now forced to sell—reluctantly. It feels like this government doesn’t want good landlords to stick around.

As an aside, it's the previous Government that put the bill forward.
It was just that the existing Government chose to stand by that.

MEM62

I sold up a couple of years ago.  Accidental landlord with just one rental property in the Heathrow area.  The taxation and anti-landlord legislation dictated that it was easy to get a better return on my money with less stress elsewhere.  In my case my pension and ISA's.      

poseidon1

monkey-fingers said:

Bodicea said:

I’ve lived in social housing for over 40 years and inherited a rural house from my late mother, which I’ve been renting out—separately from my own flat. The rent barely covers my flat’s costs, and owning the property means no benefits for me. I planned to hold onto it until retirement, then decide whether to sell or keep it as a small investment.

I’ve had all sorts of tenants—good and bad—and for the past five years had a great family renting. But with the Renters Reform Bill, it’s not just the end of Section 21 that’s the problem. The new requirements—like landlord registration and meeting the Decent Homes Standard (which even my own social housing landlord fails to meet)—are overwhelming. There’s hypocrisy everywhere: my own landlord leaves flats empty for a year during a housing crisis.

The real shock came when my tenants gave notice. I thought I’d simply re-let the house, but now, under the Bill, I can’t evict tenants for 16 months, and if I serve a 4-month notice to sell but then change my mind, I’m barred from renting the property for 12 months. I’ve lost the security I relied on and am now forced to sell—reluctantly. It feels like this government doesn’t want good landlords to stick around.

As an aside, it's the previous Government that put the bill forward.
It was just that the existing Government chose to stand by that.

Always useful to point out that progressive anti  ( private ) landlord legislation was a ( surprising) political initiative of the previous Tory government, going all the way back to the insidious Section 24 (reduction of mortgage interest relief) phased in from 2017.

For the small amateur private landlord, the current hostile environment makes it difficult to justify remaining in the sector. However, does not seem to stop a steady stream of clueless newcomers jumping in. 'Homes under the hammer' probably has a lot to answer for in this respect.

BungalowBel

Exodi said:

I can't comment on the former part of your question as I am not fortunate enough to own multiple properties, however on the second question 'will some landlords [exiting the market] push up rents?' I don't think it's as simple as one might think.

The knee jerk reaction might be yes, less properties being rented out equals less supply, and basic supply and demand economics show that where there is the same demand but less supply, prices will increase.

Though this answer is too simple, in my opinion. Firstly, we must consider that the property isn't being knocked down, it is being sold to someone else. The new owner may rent it out, they may have rented previously but have bought this house, etc. Secondly, even if we ignore this and assume the houses on the market will have no effect on rental demand, we could apply supply and demand economics again to realise that an increased supply of houses on the market might cause house prices to go down. You could then consider that if house prices were to decrease, whether that would have an impact on rents.

Then there is the legislation. The RRB amendments to section 13 will no longer allow contractual rent increases for private rental agreements (that is, clauses that increase the rent automatically by some form or index or percentage) and any existing agreements with such a clause would be void. While it will still remain possible to increase rent by a 'manual' statutory s13 rent increase with the relevant notice, I would expect that rental increases will decrease by volume, either due to inertia or avoidance of conflict.

That's also not touching upon the tribunal changes, or the aptly coined 'nothing to lose' challenges expected to be afforded to tenants.

Personally, I don't think there will be any significant impact. It seems the most vocal on this have conflicted interests, as they might prefer the Renters Reform Bill is not passed so of course would suggest it might be worse for tenants (by causing rents to go up). But it's such a complicated question, I am not qualified to answer it - just pointing out the potential nuance to the typical knee-jerk response to that question.

We sold our rental flat to a first-time-buyer who had been previously renting.

Therefore there is one less property to rent (but  also one less renter, as she bought the place) and her old place will be available to rent to someone else.

I am not enough of an economist to say what effect, if any, this will have on the rental market.

ReadySteadyPop

Bodicea said:

I’ve lived in social housing for over 40 years and inherited a rural house from my late mother, which I’ve been renting out—separately from my own flat. The rent barely covers my flat’s costs, and owning the property means no benefits for me. I planned to hold onto it until retirement, then decide whether to sell or keep it as a small investment.

I’ve had all sorts of tenants—good and bad—and for the past five years had a great family renting. But with the Renters Reform Bill, it’s not just the end of Section 21 that’s the problem. The new requirements—like landlord registration and meeting the Decent Homes Standard (which even my own social housing landlord fails to meet)—are overwhelming. There’s hypocrisy everywhere: my own landlord leaves flats empty for a year during a housing crisis.

The real shock came when my tenants gave notice. I thought I’d simply re-let the house, but now, under the Bill, I can’t evict tenants for 16 months, and if I serve a 4-month notice to sell but then change my mind, I’m barred from renting the property for 12 months. I’ve lost the security I relied on and am now forced to sell—reluctantly. It feels like this government doesn’t want good landlords to stick around.

The "housing crisis" is mainly myth created by money lenders, the drop in new-build sales shows that the demand is falling away quite quickly now, this will only get worse as less people come into the UK to work/study, maybe you are selling at the right time, do you think it will sell easily?

https://www.msn.com/en-in/news/India/indian-students-workers-top-uks-exit-tally-in-downward-migration-trend/ar-AA1Rh0LU

SarahB16

BungalowBel said:

Exodi said:

I can't comment on the former part of your question as I am not fortunate enough to own multiple properties, however on the second question 'will some landlords [exiting the market] push up rents?' I don't think it's as simple as one might think.

The knee jerk reaction might be yes, less properties being rented out equals less supply, and basic supply and demand economics show that where there is the same demand but less supply, prices will increase.

Though this answer is too simple, in my opinion. Firstly, we must consider that the property isn't being knocked down, it is being sold to someone else. The new owner may rent it out, they may have rented previously but have bought this house, etc. Secondly, even if we ignore this and assume the houses on the market will have no effect on rental demand, we could apply supply and demand economics again to realise that an increased supply of houses on the market might cause house prices to go down. You could then consider that if house prices were to decrease, whether that would have an impact on rents.

Then there is the legislation. The RRB amendments to section 13 will no longer allow contractual rent increases for private rental agreements (that is, clauses that increase the rent automatically by some form or index or percentage) and any existing agreements with such a clause would be void. While it will still remain possible to increase rent by a 'manual' statutory s13 rent increase with the relevant notice, I would expect that rental increases will decrease by volume, either due to inertia or avoidance of conflict.

That's also not touching upon the tribunal changes, or the aptly coined 'nothing to lose' challenges expected to be afforded to tenants.

Personally, I don't think there will be any significant impact. It seems the most vocal on this have conflicted interests, as they might prefer the Renters Reform Bill is not passed so of course would suggest it might be worse for tenants (by causing rents to go up). But it's such a complicated question, I am not qualified to answer it - just pointing out the potential nuance to the typical knee-jerk response to that question.

We sold our rental flat to a first-time-buyer who had been previously renting.

Therefore there is one less property to rent (but  also one less renter, as she bought the place) and her old place will be available to rent to someone else.

I am not enough of an economist to say what effect, if any, this will have on the rental market.

A very simple of way of looking at this...

Let's say in England there are 100 homes (70* are owner occupied or for sale) and 30* are rented.  I think the wider plan is to lower the proportion of homes that are for rent in order to try to increase owner occupation (let's say to an 80/20* split). 

Therefore you could say you exiting the PRS market has been a positive as your home is now occupied by an owner occupier.  
  
* The 70/30 and 80/20 split is for illustrative purposes in my example and should not be interpreted as reflective of UK housing stock.  

monkey-fingers

ReadySteadyPop said:

Bodicea said:

I’ve lived in social housing for over 40 years and inherited a rural house from my late mother, which I’ve been renting out—separately from my own flat. The rent barely covers my flat’s costs, and owning the property means no benefits for me. I planned to hold onto it until retirement, then decide whether to sell or keep it as a small investment.

I’ve had all sorts of tenants—good and bad—and for the past five years had a great family renting. But with the Renters Reform Bill, it’s not just the end of Section 21 that’s the problem. The new requirements—like landlord registration and meeting the Decent Homes Standard (which even my own social housing landlord fails to meet)—are overwhelming. There’s hypocrisy everywhere: my own landlord leaves flats empty for a year during a housing crisis.

The real shock came when my tenants gave notice. I thought I’d simply re-let the house, but now, under the Bill, I can’t evict tenants for 16 months, and if I serve a 4-month notice to sell but then change my mind, I’m barred from renting the property for 12 months. I’ve lost the security I relied on and am now forced to sell—reluctantly. It feels like this government doesn’t want good landlords to stick around.

The "housing crisis" is mainly myth created by money lenders, the drop in new-build sales shows that the demand is falling away quite quickly now, this will only get worse as less people come into the UK to work/study, maybe you are selling at the right time, do you think it will sell easily?

https://www.msn.com/en-in/news/India/indian-students-workers-top-uks-exit-tally-in-downward-migration-trend/ar-AA1Rh0LU

And pray, tell, Crashy, where will the 175,000 (2024 figure) people who claimed asylum stay?

The current Government have stated that they will stop housing asylum seekers in hotels and are putting them into either shared HMOs or private lettings.

That's got to put some pressure on the rental market, surely?

There are currently 36,000 people in hotels who the Government is actively looking to find somewhere to stay.

And if anyone thinks I'm a dog whistle reactant, I'm anything but. I make no assumptions on asylum seekers.