Changes on the way for landlords

29 Jun 2022

Rental reform: summary of changes

The fortnight in five seconds

  • Rental shakeup on the way
  • Interest rates rise again
  • Market view: conveyancing delays, landlord concerns
  • Movewise news: check out our selling guides

Rental shakeup on the way  

Since our last newsletter the big news on the residential property scene has been the publication of the long-awaited white paper on rental reform. The government's stated aim is to "fundamentally reform the private rented sector and level up housing quality". Landlords may feel it represents another attack on their livelihood as the balance of power shifts further in favour of tenants.

Perhaps the biggest change proposed by the government is the abolition of Section 21 or "no fault" evictions – landlords will only be able to evict tenants for specifically defined reasons, such as when they wish to sell or move into their property, or when the tenant is at fault (eg serious rent arrears or antisocial behaviour). In addition, the current system of tenancies will be simplified, minimum standards for housing will be extended to private rentals, and landlords will no longer be able to impose blanket bans on tenants with children or those on benefits, or ban pets without good reason.

It remains to be seen what impact these changes will have on the number of landlords leaving the private rented sector. One thing that is certain is that landlords provide a valuable service: fewer than 10% of renters have enough savings to qualify for a mortgage.

Interest rates rise again

 Shortly after our last newsletter, the Bank of England raised the base interest rate from 1% to 1.25%, as inflation reached its highest level since the early 1980s. Meanwhile the pace of house-price growth continued virtually unchanged, with prices rising 0.3% month-on-month in May, the 10th straight increase.

The Rightmove index puts the average price of property coming to the market at £368,614, while Nationwide's index (which is based on mortgage approvals and uses a different averaging method) showed an average price of £269,914.

Market view: conveyancing delays, landlord concerns

Completing a property sale is still a frustratingly slow process in many cases, due to what Rightmove's director of property science, Tim Bannister, recently called a "conveyancing log-jam". Transaction data show that it is currently taking 150 days to complete a purchase on average after agreeing a sale, 50 days longer than this time three years ago.

Meanwhile, along with our partners at the NRLA, we are waiting to see what Michael Gove's rental reform white paper will do to the market. Our landlord property adviser, Adam Coffin, says: "Interestingly I haven't heard too many landlords bring it up yet. but in my eyes it will be the latest push towards smaller landlords leaving the market. We could see a progression towards more and more professional or large-scale landlords and corporate landlords." 

Movewise news

Check out our selling guides

Don't forget that we have a comprehensive library of articles on our website, from how to choose a solicitor to how to prepare your house for sale. Our guides section also includes helpful tips for selling problem properties, along with recordings of our previous webinars.

Is there a topic you'd like us to cover in a future webinar or guide? Get in touch at robk@movewise.co.uk.

Have a great week!

Rob and the Movewise Team

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