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.

She won’t have to pay any CGT, it’s her retirement home. She’s going to sell the house she lives in (No CGT) and move to the one she’s renting out. She might sell and buy something better at some point but she’ll be selling her primary residence once again so no CGT. She’s one of the most financially switched on people I’ve ever met and she quite deliberately chose the place on the basis that she’d be happy to live in it for a couple of years.

One can only have one main residence at any one time. The rented out house will not have been her main residence when it was rented out. The computation is linear, not stepped. There may be CGT to pay if she sells in her lifetime. Otherwise it is IHT subject to the (up to) £1m which includes transferable allowances.

This disagrees with you. All she has to do is live in it as her primary residence for two years after she’s sold the house she’s currently living in.

Change your Primary Place of Residence
Avoiding Capital Gains Tax could be as simple as moving house for two years. You see, the one property sale where you don't pay CGT is the sale of your primary residence; you only pay capital gains for any property that would be classed as an investment. So, if you're thinking of selling a second home that's worth significantly more than your current home, then calling it your Primary Place of Residence could save you significantly more cash. Do so and like magic, you'll avoid CGT completely.

https://www.thepropertybuyingcompany.co.uk/news/post/capital-gains-tax-calculator-uk

If the rental property has never been lived in by her before as her main residence and she moves into it, there will be a period that is owner occupied and exempt and a period that is investment and chargeable.

You need to look at TCGA 1992, Sections 222 - 224, which agree with me.

I don’t need to look at anything. She knows what she’s doing and if she doesn’t it’s not my problem.

Back peddling.

Not at all. Why would I back pedal?

I’m sure a-lot of landlords do this or gift their homes because they want out it’s a not great business to be in right now which impacts on tenants primarily

@Parsley1234 @MarieG10 Yes, I suspect that flexibility and compromises may go out of the window if/when most rentals are owned by large entities.

Parsley has a good relationship with their tenant so has agreed to wait for the rent; Marie isn’t raising the rent because she values her longterm tenant- these compromises won’t happen when a large company is in charge. Everything will be standardized-rent paid by X date or you’re immediately in arrears ; all rents set according to the market rate, etc.

@HamBone youre right I’ve been in this business 25 years always gave one of my houses over to domestic violence victims but the council won’t pay Market rent so it’s gone on the market for full rent it’s insane renters who think this is a good thing are deluded the rents will go up there will be no variation and that will be that. It’s really rubbish for everyone where will people live the government are sleep walking the majority of poor landlords are local authorities

@Treacletoots they suggested to him he should be making the improvements required (as well as repairing all the broken white goods included in the contract) but he's refused.

I appreciate mortgages have risen but he's owned the place for years so it just feels like profiteering. I understand it's a business, I was a landlord until last year but in a country with far more protection for tenants than landlords, such as a fixed percentage rent rise, no evictions in the winter etc

Someone near us did similar but put daughter into the cottage, had all post sent there, electoral roll, paid energy bills, rates. Accountancy wise it worked

Companies from overseas are buying up and letting. One landlord in the Netherlands has 700+ properties. There's Saudi companies owning thousands of properties. They'll have difficulty foisting new legislation on them

https://www.landlordtoday.co.uk/breaking-news/2023/3/brexit-and-weakchange-shape-of-overseas-investment

@LawksaMercyMissus how annoying. It sounds like it to me too. I just don't understand why he wouldn't sort the white goods. Or even more logically, rent unfurnished so they no longer had that responsibility 🙄

We've just agreed a rent increase, considerably less than market rates would suggest because we havent increased the rent for 5 years and the mortgage has gone up by 30%. But rather than just go to full market rates, which we know they can't afford I'd prefer to make a small loss because I know they look after the property and a bad tenant would cost way more. One bad tenant cost us over 3k in damage and they thought they left the property in good condition! The deposit protection scheme also agreed with them despite us having clear proof of all the damage. Go figure!

On top we are upgrading the property in readiness for the new EPC legislation, which will cost us well over 10k. The bank won't lend us the additionL because we aren't charging enough rent, apparently.

Its between the banks and the government, IMHO who are fucking tenants the most.

I wonder if we’ll end up with people stuck in longterm informal rental through airBnB. We were recently looking for somewhere to stay locally for a couple of weeks while work was done on our house. I was amazed at the huge numbers of houses on airBnB in some of the more economically deprived areas of our town. This is definitely not a town people would come to for a holiday and prices were roughly what I would have expected in rent for the area.

Economies of scale means someone with 100 houses should have less costs (per house) than a landlord with two . That’s just basic business sense. Doesn’t necessarily mean cheaper rent obviously

how can you not see that it doesn’t matter if a renter buys that particular house it’s still a net 0 effect? Assumjng it’s not sold to air bnb or left empty or knocked down, it’s either sold to someone currently renting (which leaves another property free for that renter who doesn’t want /can’t buy) or it’s sold to a homeowner who leaves another empty house which either is sold to a previous renter or sold to another homeowner who leaves another house empty etc. it’s only not net 0 if we run out of renters who wish to buy which is not the position we’re in anywhere in the country.

And how can you not see that there will always be a need for a rental market? Not all renters want to or are in a position to buy.

@Abergale You are missing out the quite large numbers of people who are not currently renting but looking to buy. They are either living with parents/relatives or sharing. And they will be in a better position to buy once prices come down because presumably they have managed to save a deposit. Overcrowding is a real issue and it will be them you are most likely to benefit from landlords exiting the market. I doubt that the majority of rental properties leaving the rental market are going to current renters.

@MoonriseKingdom the rise in Airbnb is entirely down to the tax legislation S24 that was levied on landlords fairly recently. Currently private rental landlords cannot deduct their finance costs from profit, unlike any other business, meaning they pay tax on their income BEFORE costs, and many aren't making any profit.

Renting AirbNbs avoids this entirely. Again, another example of "being careful what you wish for"

A landlord could I guess call it an Airbnb and let to permanent tenants then. That's a good dodge

Why would it be difficult to put in place legislation that would affect foreign property owners? There is plenty of it. Every country has it.

Nope. That is not what the legislation says.

The only thing that will actually improve things for tenants is an increase in the supply of properties. This change has the very likely impact of reducing supply further and making the shortage worse.

"Accountancy wise" - what exactly does this mean? Sleight of hand?

Did the owner pretend to be the owner occupier? If so that is tax evasion. That really is not the way to do it. the property could be seized under POCA.

Or are you saying the daughter was occupying the property as the beneficiary of a trust? That would work, but might not be so clever from an inheritance tax position. Though I don't suspect that is what you meant.