Article from today’s Telegraph…
I never thought I’d sell my central London flat – here’s what pushed me over the edge
Labour’s irrational policies have turned my steady earner into a millstone
When my tenants gave notice to leave earlier in the month, I set about the business of preparing the property once more for letting. With a hallowed EPC grade C – valid for the next 10 years – and situated in central London, the flat has always been in high demand.
It was never my plan to sell. It’s a property I’ve always liked; it has a low loan-to-value mortgage, it’s profitable and it’s been a steady earner for the past 18 years of ownership. In fact, when I posted it on OpenRent, a website where I list properties without an agent, I was inundated with enquiries. And yes, the rent had also increased.
This property was meant to form part of my portfolio for at least another 10 years. So what changed?
The friction of continued ownership started with the realisation that I would need a new property licence at £965.
It is a leasehold property, which entails inherent risks. Even though the lease has 104 years remaining and service charges have always been reasonable, these fees could easily increase.
Should I take a tenancy on the property and later decide to sell with tenants in situ, I know I would be limiting the market to investors (thin on the ground) and therefore risk reducing the value.
Under the new Renters’ Rights Act, due to come into force on May 1, 2026, gaining vacant possession may become more onerous – and I fear the courts may be even more overloaded.
The new laws will also protect a new tenant from eviction for the first 12 months, after which the landlord must give four months’ notice of their intention to sell. This means, assuming all goes to plan, I could list the property for sale in 16 months (provided the tenants vacate and no court action is required).
That I could get my head around. However, what I couldn’t fathom was that if I listed my property for sale but didn’t sell it, I couldn’t re-let it for 12 months. If I did re-let it within that time frame (rather than having it standing empty), the fine for this breach is up to £25,000.
If that sounds ludicrous, it’s because it is.
A property that doesn’t sell within the first couple of months is probably not going to sell. This could be because of a number of factors, including price, location, market conditions and interest rates. So to force a landlord to keep this property vacant for a further 10 months, when there is such demand for rental homes, seems the very definition of insanity.
But what also irritated me was the outlandish fine, which bears absolutely no relation to the crime. How can a landlord be fined £25,000 for renting a property they intended to sell when a director of a marine waste management company was fined £25,000 for illegally disposing of toxic silt in a Cornish seaside conservation area? Or how about the law firm that was fined £25,000 after being found guilty of serious breaches related to money laundering and terrorist financing?
The disproportionate fines Labour has introduced for landlords should make any believer in democracy scream.
The fines are so insane that most landlords with just one property could get wiped out overnight.
Even a minor administrative error can incur a fine of several thousand pounds. For example, failing to issue a written statement of terms within 28 days of an assured tenancy coming into existence carries a £4,000 fine. So too does failing to provide an existing tenant with prescribed information about changes made by the Renters’ Rights Act.
Labour politicians have become so hell-bent on destroying private landlords that they have lost all grip on reality. It’s a well-known fact that speeding is dangerous – contributing to around 400 fatalities per year – but the statutory maximum speeding fine is £1,000. Under the new regime, a landlord can be fined four times as much for a simple admin error as a speeding driver could be for something that could cause death.
The landscape for continuing to be a landlord looks like utter madness and a perilous ride. Which is why I called it quits on this property. Right now, I have control – and I intend to exercise it.
www.telegraph.co.uk/money/property/buy-to-let/never-thought-sell-central-london-flat-pushed-over-edge/