Small landlords selling off isn't a great news after all

[Goingindrain]

My landlord is a small landlord, just owns his house and the one where we live. He is a nice man and charges us below the market rate rent.
He is fed up of all the anti landlord rules and has decided to sell. It seems he had an offer from FTB and then a big corporation put in an offer 10k over and he's selling it off to them via the agents.
I am worried about the rent going up and it's not a great news for tenants.

It depends what is in the tenancy agreement though, whilst there is no legal limit (yet), some tenancy agreements may have clauses. Good practice is 10% max and no-one would think it acceptable to double rent on an existing tenant. Or to serve notice just to levy a huge rise. Your late parent mismanaged the rental, that’s not the tenant or agents fault.

My late parent was in care after a devastating stroke, for most of the tenancy. There's a long story behind the mismanagement of the property which I won't bore you with. But my parent was incapable of managing it, and I wasn't allowed any involvement.

I'm just the lucky one picking up the pieces now.

You can write what you like in a tenancy agreement but if it is not agreement with the law, it is toothless.

According to shelter:

Rent increases and bidding wars

Currently, a private landlord can increase the rent by agreement with the tenant, through a rent review clause or by serving a section 13 notice once a year.
Under the proposed new rules, landlords will only be able increase rent through a section 13 notice. Rent review clauses in tenancy agreements will have no effect. Landlords using a section 13 notice will need to give a tenant two months' notice of any increase, rather than one month.
Tenants will continue to have the right to challenge the section 13 notice in the First-tier Tribunal. The Tribunal can currently set an even higher rent than proposed by the landlord. After the Act comes into force, the Tribunal will only be able to set a figure the same or lower than the section 13 proposed rent, and the change won't be backdated.
The government plans to restrict landlords from requesting more than one month's rent in advance when signing up to tenancies.

For any tenants reading, you can challenge any rent increase and won’t have to pay it until the tribunal rules on it. Depending on if there’s a backlog this could buy you extra time at the old rate, as it won’t be backdated.

The sale of houses under right to buy isn't responsible for the entire housing shortage

Nobody's suggesting it is, @Winter2020, since issues rarely have only one root cause, but if government had somehow managed to magic up 2 million extra homes I'm pretty sure they'd have trumpeted it from here to kingdom come

So it's interesting that they still have no intention of addressing the 2 million which have been lost by making sure there are no more

R.e. Section 21 - no fault evictions. Would you be okay if you worked somewhere for 5 years, complained about unsafe working conditions, were sacked with no reason and that was perfectly legal?

This happens over and over again in housing. And many tenants are too afraid to report or request repairs because they might just be evicted, they don't know how the landlord will react. This even extends to illegal behaviour like entering the property with no notice.

I do agree there's issues with tax treatment of mortgages. The main reason many are selling up though is the era of low interest rates is over and you can get 4 per cent no risk in a bank account.

There are also some that don't want to have to do any sort of admin..I know someone who is moaning that the shift is too far to tenants rights...turns out what they mean is they would have to pay a couple of hundred for a gas safety certificate and EPC. And get £1400 a month in rent. No mortgage.

It doesn’t happen over and over again. Because S21 is ‘no fault’ - a misnomer if ever there was one - there is no official data on why they are issued. But data collected by landlord groups indicate that they are mainly used in the event of rent arrears and/or antisocial behaviour where the recommended route - Section 8 - fails because of court backlogs. It would be more accurate to call them ‘no reason given’ evictions.

No sensible landlord throws out a good tenant at will. It makes no business sense.

I do agree that many use Section 21 for legitimate reasons, it's slightly easier - although you do still have to go to court to regain possession of they don't leave at the end.

However, research shows from i.e. Citizens Advice that making a formal request for repair raises the chance of being issued an eviction notices. Section 21 is used for this.

There's been similar surveys by i.e. Shelter.

Of course no landlord is going to reply to a survey that they evicted someone because they requested repair, especially if it was safety related.

In reality in current market it's much easier to get a new tenant within i.e. a week than make repairs especially if they are complex i.e. rising damp or new boiler. It often makes financial sense not to repair and get a new tenant.

Of course I'm not saying all landlords are like that. But I'm shocked by some accidental landlords I know who I thought were decent people, but then when tenants legitimately wanted repairs were awful.

Just logically if a landlord is decent, tenants will stick around - so many people's experience of the rental market is the worse sort of landlord. The decent landlord should campaign for better reforms.

This is inaccurate and dangerous advice. The reforms haven't come through. If a tenant challenges a rent formally increase ATM they are at substantial risk of being evicted through Section 21.

With Section 21 you never have to go to court. Yes you need to submit paperwork but, as long as everything has been done correctly, possession will be granted. With Section 8 you actually have to attend a court hearing and it can be defended. It's more expensive, takes longer and is less dependable than Section 21.

Finding a new tenant and running all the required checks is not a five minute job. Shelter has no interest in reporting any data that puts landlords in a half decent light. They are fervently anti PRS.

I am a landlord and I know several. All any of us want are good tenants and we treat them well in return.

Bad landlords may well try and evict tenants who complain about substandard accommodation and there is no excuse for this. But this new Bill will not remedy any of that. We already have plenty of legislation to deal with that. Retaliatory eviction clauses were added to the Deregulation Act 2015 so why hasn’t this behaviour been dealt with in the last decade? The truth is that governments and councils are not dealing with bad landlords because it’s too hard to follow through with enforcement action. So they fart about passing new legislation through Parliament to make it look like they are taking action, deter good landlords in the process and tenants are no better off.

I agree the bill is flawed but it will help as landlords will have to have a number of legitimate reasons to evict someone. They can't evict with no reason. Similar to employment law, after a period you can't just fire someone with no reason.

Laws around retaliatory eviction are extremely limited in the private sector, you have to have got to an advanced stage with Council serving notice.

The reality is that tenant emails to get something fixed, very soon after tenant gets evicted with Section 21. But how can you prove one led to the other?

Obviously finding a new tenant and running new checks is not a five minute job (although in many areas it nearly is!) but neither is getting repairs sorted. Finding and sorting tradesmen is hard more so if you don't live nearby.

This has happened to many I know, and worse. And so as well people have to decide whether to ask for repairs and risk eviction and all the costs of moving or not.

You are a classic case of WYSIATI bias - what you see is all there is. Just because as far as you know* your landlord friends don't do this doesn't mean it isn't happening. Maybe you pick decent people...but also perhaps you need to get out of your bubble and talk to a wider range of people?

*As with the recent case of a Labour MP not meeting regulations he actually helped put together, letting agents don't necessarily pass requests into landlords.

To really improve fundamentally improve housing, the only way is to build massively more.

Regulation helps to an extent but also we need far more choice. And a proper backstop of social housing.

Not going to happen because it would drive down rents and house prices...

You can't build your way out of the mess we're in.

The student numbers that have come over the last dozen plus years have damaged communities beyond belief.
If your hasn't been - then either you're oblivious to what a strong community is, or you live somewhere without students or migrants.
Student housing eats up houses for fun.

More single parents? Then that doubles the number of properties needed.

Rich investors from overseas are allowed to buy property here and don't even have to live in it. There are buildings in Manchester that are making money by being empty. Property always goes up in price. The fiscally irresponsible lending didn't stop in 2008 because you can borrow silly multiples of your income - or even worse a tiny percentage of a house.
Every time you are seeing a share ownership property come up for sale you're seeing a nightmarish world of 'the affordable nonsense'... And any scheme that calls housing affordable is clearly gaslighting.

Skills shortages mean we tempt people from all over the world - often pushing the native population out of the picture. See the midwives/nurses/gp threads on here.

The people coming on boats will all be entitled to bring their families (Don't google the story of someone who bought 41 people over on a family visa as he didn't come over on a boat) and entitled once they have leave to remain to suitable housing.

1000 a day means 1000 extra houses needed.
Oh minus the few that are sent back to France.

HMO is more profitable than letting to families - the people currently in hotels have to go somewhere and probably Serco etc is getting rich off the tax payer.

There is no solution that would not sound right wing. Too many people and not enough houses so prices will remain high and tenants will be paying more.

Lloyds entering the market might a shoeshine boy moment. Banks are after all inherently bad with other people's money.

I am not blind to the realities of the rental sector. I am aware there are many bad actors, some not intentionally so but more through lack of action. I include social providers in this, substandard accommodation is not limited to the PRS.

But my point still stands that if enforcement action was swifter and sooner, there wouldn’t be as much need for ever more escalating regulations which adversely impact good landlords and tenants.

I thought it was quite clear I was quoting Shelter’s page on the changes, not currently.
Did you read the link?
It’s a page about the changes.

People are asking about the changes “What are the changes?” so I posted a Shelter link about the changes.

If anyone thought I was talking about the current situation, or posting a link about the current situation I apologise that I didn’t clearly state that my comment was about the changes.

These are the changes that landlords are saying they are selling up for.

I think the Shelter page is useful.

I did read the quote it, however the conclusion you reached was misleading: "For any tenants reading, you can challenge any rent increase and won’t have to pay it until the tribunal rules on it." That implies that's the new current rules.

Like I said I'm skeptical these new rules are why anyone is really selling up, and they will still be able to increase rent up to the market rent now (which someone claimed they could not) or in future for new lettings. Even if the rules weren't changing it would make financial sense for many to be selling now.

And many are already saying they don't increase rent for sitting tenants anyway...

Even the proposed system is far more generous than other countries where the limit is often I.e. inflation. It still means renters don't have any sort of real security. If the market rent for new lettings of where you need to goes up by say 20 per cent then they are going to have to pay it or move.

It's really precarious still to be a renter even under these new reforms, and not good compared to other countries.

Building would help, we have been building far far fewer news homes than other comparable countries and that is unlikely to change. Yes immigration is obviously a factor pushing up rents and house prices. The trouble is those in charge are landlords and home owners (that's another reason councils don't bother enforcing current laws even though they could actually make money out of it).

Sorry for getting economics and long winded but the ability for rents to rise effectively unlimited is also hitting UK growth (and so tax receipts) which is atrocious compared to other similar advanced countries.

The propensity for younger private renters to move home and get a new job fell by two thirds between 1997 and 2018.

Rents have risen fasted in areas with higher pay, basically eliminating pay advantages to move to areas with productive firms. Or to simplify, the benefits of higher productivity/pay go to existing landlords and home owners at cost to the general economy.

It's not just about London. If you moved from an average job in Scarborough to Leeds in 1997 you'd get a 29 per cent boost to living standards. Today (or in 2023 I think on the study) it would just be 4 per cent.

In a competitive market these higher rents and more demand in productive areas would result in more building, rent increases would be limited or actually decrease more would move to or near productive cities and the country as a whole would benefit.

(As well as this issue, capital has been flowing to existing properties rather than long term investment has been suppressing the investment rate and long term economic growth ).

This of course also means that there is more demand for skilled migrants in these cities and industries. Most of recent long term migrants have been under skilled work visas - not boats.

It's not a zero sum game, landlord versus tenants. The only plausible way for living standards to rise for everyone, for public services to be funded properly, is to have a functioning productive economy.

That means actually sorting out the housing market. Not gonna happen though.

I’m well aware of that. My point was that some
tenancies have clauses about when and how much you can review rents. That’s helpful in some respects as everyone knows where they stand and what to expect.
However there may not have been such clauses in that posters agreement, they may have just been shit at running their rental.

It’s not a kindness to let rents fall well behind market rents, it makes life bloody difficult for people when they have to move on for whatever reason. Proportional and relatively frequent increases are what should happen eg every 2 years or so. Not whacking them up arbitrarily because they have fallen well behind.

Although I will be well out of it soon, I would support restrictions on rent increases. I’ve generally applied increases to existing tenants of well under 10%. Only larger increases when a tenant has left and I have advertised it at a greater price in line with the market shift. In 18 years of tenting the same property out (former home) I have had zero voids so I think I have pitched it fairly.

1965 appears to be an appalling year for legislation. They also created the Jimmy Savile loophole in the sexual offences act which means thousands of women now can’t get justice for being raped as 13-15 year olds pre 2004.

The situation is a shift of wealth to the already wealthy. As we have learnt trickle down economics is a fallacy. All money and resources eventually float upwards. The best policy governments can have imho is pumping money in at the bottom, but giving some sort of financial breaks for housing just fuels housing costs.

OP - I'm a small landlord. I have a tenant that has not paid for 7 months. All this time I'm paying the mortgage and the bills on the flat myself, so it's been a massive strain on our finances.

I am not able to get him out. I took him to court in July and until now I still haven't received any news from the bailiffs, courts are backlogged. In the meantime, my tenant is living freely in my flat, brought in 2 dogs (reported by my neighbours) which he not allowed to do, all protected by the law as I can't get into my flat, even though I got a Possession order issued by the County Court. It's literally INSANE!!

Once he is out, I'm selling the flat! It's really not worth it. Everyone is saying things are getting worse from Jan, as if it can be any worse than that.

I believe that speeding up eviction and return of property to landlord for non payments etc would make getting rentals easier.

Of course it would. It would also make it easier for the less gold plated tenants to find properties, as landlords wouldn't run such huge risks.

You are missing the point here. The issue isn't the rent it's the risk which has been increasing incrementally for LL in the PRS for some years. The new law, when implemented, hugely increases the risk of the investment to landlords.

I know of no landlords who would evict a tenant for no reason. The usual reasons using a s21 is arrears, persistent late rent payments, failure to properly heat and ventilate the property or/and not reporting maintenance issues promptly. All of these can be major issues and can threaten the value and condition of the property.