As the law tightens on the private rental market, landlords are needing to deal with more and more legislation, treading what is becoming something of a tightrope of risking multiple fines, not being able to evict tenants and even criminal convictions.
Key legislative changes over recent years have been the introduction of things such as mandatory EICR, right to rent checks, EPC changes, HMO licensing, Article 4 directives, the tenant fees ban, how to rent guide (when issued with the correct date on) and more.
We’ve also seen calls for a landlord licensing scheme to come into force along with a landlords register; however, I personally think that this will not deter rogue landlords.
Whatever is done may make enforcement easier, but it will end up penalising good landlords.
Interestingly, of proposals for a landlord register, Scottish Association of Landlords chief executive John Blackwood has warned that the scheme has not worked as it is managed by Local Authorities and only maintained to keep a list of all landlords!
So, what’s new…?
You may have read about the levelling up policy paper that was released recently and has been severely criticised for being a rehash of existing proposals. For the rental market, this includes things such as:
- A national landlord register
- A crack-down on rogue landlords
- Implementation of a national ‘decent homes standard’
- Moves to abolish section 21 ‘no fault’ evictions
- Poor energy efficiency being tackled with targeted funding for the worst-performing homes and “those least able to pay”
The headline goal is that by 2030:
- Renters will have a secure path to ownership with the number of first-time buyers increasing in all areas
- The number of non-decent rented homes to have fallen by 50%, with the biggest improvements in the lowest-performing areas
Surely, we’ve heard all this before?! Let’s take a look. Here’s the headlines from the renter’s reform bill:
- A national landlord database
- A right to redress (linked to the national ‘decent homes standard I don’t doubt)
- Scrapping of section 21 evictions
- Lifetime deposits (interestingly, this didn’t feature in the levelling up paper)
I’ll pause for dramatic effect… I’m sure you can sense the hint of sarcasm in my tone!
I think that these announcements are certainly becoming confusing for landlords, with many investors now considering delaying, reducing, or diverting funds to other avenues.
I’ve previously written about a climate of uncertainty and this is reflected in the statistic of how the number of private landlords hit 2.66m in 2019, down by 222,570 just two years prior.
Rental demand is up, but the uncertainty amongst investors certainly is rife!
I had the privilege of hosting the Property Success Network in January where we had Nightmare Tenants, Slum Landlords’ Paul Shampalina as our keynote speaker and he highlighted how the next five years will bring about a large amount of legislative change… it really is time to ‘watch this space’!
What’s my thoughts and advice? Yes, property has proven to be a reliable asset class over past decades and shows no sign of slowing down, however as with all good investments it’s crucial to spread your risk and not put all your eggs in one basket.
Property performs extremely well; however, I certainly think there is mileage in holding stocks and shares, bonds and other investments in your strategy with a very clear end goal.
The final point is to keep up to date with the legislative changes as getting caught out could not only be stressful but also costly!