It is fair to say that private landlords shed few tears at the sight of Theresa May leaving office to be replaced by Boris Johnson. The last few months of her premiership appeared to revolve around increasing tenant rights and protections at the expense of landlords. However, it was interesting to see that the final act of her government was to launch a tenancy reform consultation in England.
Will the authorities listen?
The 12 week consultation is well underway and will cover an array of proposed amendments to tenancy law in England. While initial feedback from the new Boris Johnson government would suggest a more balanced approach to tenancy reform, landlords are not yet convinced. There are a number of issues which will be discussed with industry figureheads such as:-
Section 21 eviction notices
This is the main bone of contention regarding private landlords as section 21 eviction notices are used as part of “no fault evictions”. This notice allows landlords to take back control of their properties whether they might be looking to sell or even move in themselves. If section 21 notices are removed from the statute books there are concerns this may lead to indefinite tenancies. No amount of empty promises will satisfy private landlords, they want cold hard legislation to protect them and their investments.
Section 8 eviction notices
If the reforms are carried out we will see section 21 eviction notices withdrawn and effectively become part of section 8 eviction notices. This type of notice does not currently accommodate “no fault evictions” and any termination of a tenancy has to be agreed by the courts. As you might imagine, the recent swing to improve tenant rights and protections could, as detailed above, lead to indefinite tenancies. Under the current system it can be extremely difficult to evict tenants guilty of antisocial behaviour or in significant rent arrears. Surely these are perfectly legitimate reasons for eviction?
Digitising the system
We know from the UK government’s recent press release that the Ministry of Housing, Communities and Local Government is working with the Ministry of Justice to digitise the court process of repossessions. The idea is that section 8 eviction notices, more cumbersome and expensive than section 21 notices, will be more streamlined with the process operating at a much quicker pace. This will still not take away the onus for landlords to present a watertight case for eviction but will at least reduce average processing times.
More balance required in the courts
There are numerous reasons why landlords might instigate a section 8 eviction notice with antisocial behaviour and rental arrears at the top of the list. We have on occasion seen courts rule in favour of tenants where there would appear to be a perfectly valid reason for eviction. Time and time again private landlords have been thwarted as they attempt to realign their property portfolios. Talk of rental controls, reduced mortgage interest relief and increased/new property taxes have already cut private rental margins for many landlords.
It is vital that the UK court system is more balanced in the future in order to encourage new landlords to enter the market and existing landlords to remain.
Can landlords trust the UK government?
When Theresa May first floated the idea of tenancy reforms and the withdrawal of section 21 eviction notices, landlords were up in arms. History shows that private landlords have been encouraged to invest in rental properties. We know that council properties peaked at over 5 million in the early 80s prior to the Conservative government’s “right to buy scheme”. Council housing and housing association properties dipped below 4 million just after the turn-of-the-century but the numbers are slowly increasing again – slowly being the operative word.
So, not only do private landlords have to contend with potential changes in tenancy regulations but as we know interest relief on mortgage payments is being phased out and replaced. This is not a political system looking after the interests of landlords?
Many people are sceptical of so-called consultation periods which involve the government – do the authorities actually take notice of industry opinions? There are suspicions that by the time proposed reforms get to the consultation stage there is little that can stop the changes. Whether we will see a different approach from Boris Johnson’s government compared to Theresa May’s cabinet remains to be seen. We can but live in hope?
Talk is cheap and private landlords are growing tired of their protections and rights slowly being removed like the layers of an onion. We can only hope that industry influencers can encourage the government to water down some of the reform proposals. Will Boris Johnson return to historical Conservative party policies, encouraging investment and reducing the tax burden on higher earners?