Do you think removal of S21 "no fault" evictions will make life for renters better or worse?

[Treacletoots]

The rental market is a shit show, we know that. A drop in available properties, rising interest rates etc all leading to increased rents whilst tenants also believe landlords are all deviants who will evict them for complaining about issues.

But.. do we genuinely believe removing the ability for landlords to issue a section 21 "no fault/explanation" evictions will help?

If landlords can no longer regain their property without blame or hassle on either side, for whatever reason, I.e. non payment of rent, anti social behaviour, because they want to sell it etc will they stay in the market?

In the last 2 years rental housing availability has dropped 30% because landlords are leaving the sector. What happens to prices when there is more demand than supply?

What do we think will happen if the government do announce a ban on S21, I estimate half of the remaining landlords will sell up, after all being a landlord is voluntary and most could currently get a better return by putting their money in the bank.

Just wondered whether people have considered the real life outcomes of landlords en mass saying "I've had enough"

Things need to improve, but I genuinely don't think this is the solution everyone needs.

Most business have to borrow money at some stage. Ultimately, it will always be the customer who will pay for the cost of borrowing. A business can’t operate any other way.

If you were around in October last year, you would surely have noticed what happens to investment funds that borrow to invest - while some numpty causes their assets to crash.

A good landlord should not mind the removal of Section 21 because they would have no need to evict a tenant for no reason. But you be careful what you wish for. The proposed removal of section 21 notices comes with much easier eviction processes and timescales for fault evictions.

I'm old enough to remember the situation prior to assured shorthold tenancies. I worked as a homeless officer then and tenants had protected tenancies. We saw far fewer homeless people who had been evicted from protected tenancies, most stayed for long periods. There were a couple of clauses where there was still no effective defense and possession had to be given, the court still had to be persuaded that the facts given were accurate. From memory I think one clause was that the property was owned by a minister of religion who needed to take up residency, and another was that it was the landlords only or principal home. There were fewer landlords, no one became an accidental landlord but those who did tended to be in it for the long haul. I think it was a huge mistake to allow assured shorthold tenancies as so many landlords are often unaware of the rules and haven't thought it through.

Amateur landlords with mortgages aren’t businesses. They’re people who use their ability to borrow money to buy an appreciating asset. Their tenants then pay back that borrowed money back as well as the interest and the landlord ultimately cashes in and profits from an asset that has cost them nothing. I personally think it’s nothing short of usury.

Really? I don’t know anyone that has a repayment mortgage on their BTL, the tenant is only paying the interest not the capital.
The appreciation pays the capital back (or some of it), not the tenant.

I have a friend with a BTL mortgage. The rent she receives is far in excess of the mortgage repayments. She overpays to the limit and is stashing the excess away to pay the mortgage off at the end. I don’t imagine for a moment she’s the only one.

I hope she’s already paid off her own mortgage then, otherwise she needs new financial advice. Anyone with any sense uses excess income to pay their own mortgage off, not a rental.

She has.

friends mum, zone 2, 2 bed council flat purchased RTB about £60k. Mum gets ill and stops working so mort paid for years by govt.

mum sells flat to my mate for about £250k to buy surburban 3 bed house cash.

Friend rents this ex council flat to ppl claiming housing benefit. Flat now worth £400k.

Transfer of public funds to private hands.

I don’t blame the player but the game is what got us here.
Ppl/housing benefit is paying thousands for some properties that used to be publicly owned.

system is broken.

We have bought a house now but rented up until very recently and our first 2 landlords both gave notice as they were selling and we gave notice on our recent one 3 months ago and it has just been done up and it's now on the market for sale.
We saw the landlord in the supermarket and he said his mortgage has gone up and associated landlord costs it wasn't worth him keeping it so he's cutting his losses - can't blame him; But that's one less family home available in the area where there is already quite a shortage of places.

I don’t get this thinking. It’s not one less family home because now a family can buy it. It’s only one less home if it gets demolished or left empty or used for air b nb

Wales .They've done this banning of section 21 gave landlords plenty of notice. Apparently 20% evicted and sold up last year. Overseas landlords are buying some up. No idea what these landlords will be like though

@Blossomtoes Have you seen your friends’ accounts? You say the rent is far in excess of the mortgage. You do know that there are substantial other costs involved and that you are taxed not just on profit but on your ‘mortgage’ payment as well. And when your friend does cash in her asset, she will most likely pay 28% tax on the ‘profit’.

Historically, rental yields were around 5%. You are unlikely to now get a BTL mortgage for less than 6% (after tax a landlord is likely to pay more like 7.5%). There is just no more rationale now to have a BTL mortgage unless it is only a small proportion of the value.

You will earn more money in the bank without any risk or work. Even if you invest it and make a gain, it will be taxed at a lower rate (and you can put a large amount every year in tax free shelters).

@AlltheFs I have a repayment BTL mortgage. According to my broker around 60% are repayment.

She’s very financially savvy @messybutfun. She’s going to sell her primary residence and move into the rental for a year or so when she retires so no CGT. I envy her financial planning skills even though I disapprove of this aspect of them.

It will be wonderful for all the tenants stuck in shitty privately rented who rely on a s21 to get help from their local council. There will be no mechanism for them have a homeless duty priority so they'll continue to be stuck there until they can no longer afford the rent increases.

Its the government's plan - keep people in their privately rented- save them having to invest in more social housing. Not sure why people cant see this and go along with the narrative that certain organisations are fuelling that all private rents/landlords are bad.

Of course there's always the waiting list but that's years before you get anything.

The average wait for a social housing property in my area up north has increased from 3 months to 18 months in the last 2 years and its getting worse.

When the private landlords sell up before the legislation comes in- that's privately rented tenants stuck in temporary accommodation for years (if you are entitled to it.) if you're not, then you'll have to find another privately rented property (if there are any available)

It's a fab idea, can't see what could possibly go wrong really.

Dont be ridiculous. How do you think business works?

A supermarket wants to expand so it takes a loan (debenture). How do you think the loan is serviced?

It is paid for by the money made from the customer who is buying produce in the store.

Maybe you need some basic economic lessons!

Already addressed @PrincessofWellies. They’re not businesses.

It will make things worse for people, not better.

So this has happened in Wales under the new Welsh housing act.

The result, thousands of people were served section 21's before the act came in. The landlord have sold/selling their properties.

So we have thousands of families homeless, and no active rental market. And the social housing stock is depleated/not available.

Its exhaserbated the housing crisis ten fold. Welsh Assembky government keep saying it will settle it will get better.

But it doesnt help us working in the homeless sector right now. Never before have I seen so many working families in temp accommodation, which has now run out of space. Its atrocious.

Worse. Our tenants have recently moved out and we are too nervous to re let it, so are going to sell. I imagine lots of other landlords are in the same position so supply will fall massively, pushing rents up even further.

I know 2 people who have left good properties standing empty which are lovely family homes

one has a 2 year contract with work away so will be moving back in 2 years

other moved in with new partner and will eventually sell but doesn’t want to at moment incase things don’t work out

rules like this will only make less properties for rent

It's not going to bring the price down.

Professional investors and larger groups will buy them out. But unlike many accidental landlords they'll be driven by profit profit profit, more profit for shareholders.

I have a rental property (accidentally) and run it at a small loss. Because it's not an investment, and I'm happy someone is covering the mortgage. I haven't raised the rent either and won't unless I really have to.

@Blossomtoes in your opinion they're not businesses. By every other measure of a business they fit the description pretty well.

Just because you personally don't like something, doesn't make it wrong.

To anyone who believes that one less rental property equals one more family home..

https://www.thisismoney.co.uk/money/buytolet/article-11807941/Why-arent-time-buyers-prospering-buy-let-sell-off.html

I know that my not liking something doesn’t make it wrong to some people. Equally I know most amateur landlord will insist it’s a business. I don’t think it’s a business and I think it’s morally dubious.