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  • Writer's pictureInvestment Synergy Team

Michael Gove launches crackdown on renegade landlords

By Ben Riley-Smith, Political Editor; Dominic Penna, Political Reporter and Melissa Lawford

17 May 2023

Right to evict tenants without having to prove fault will be scrapped in the new Renters’ (Reform) Bill

Michael Gove is launching a crackdown on “renegade” landlords after warning that Britain does not have enough houses to get people onto the property ladder.

The right to evict tenants without having to prove any fault, so-called Section 21 notices, will be scrapped in the Renters’ (Reform) Bill, which is laid before Parliament on Wednesday.

Writing for The Telegraph, Mr Gove, the Communities Secretary, argues that the change is aimed at countering only the “minority” of landlords who are poorly treating their tenants.

In return enhanced protections will be given to landlords who want to move renters on in order to sell a property, house a relative or because of tenants' anti-social behaviour.

The new legislation is an attempt to improve standards in the UK private rental sector, which has doubled in size since 2002. Now 11 million people live in rented accommodation.

Other changes will include digitising the court process and bringing in a new ombudsman to speed up decision-making in disputes for both landlords and tenants.

Lack of housing stock

Speaking at the National Conservatism Conference on Tuesday, Mr Gove addressed another issue in the British property market - the lack of housing stock.

Mr Gove said: "There is a problem, and the problem is there simply aren’t enough homes in this country, it is increasingly difficult to get on the property ladder.

He added: "We do need to think about supply, but we also need to think about how it is that we can help people, particularly younger people, in that increasingly competitive market to get the first time buyer support that they need."

Mr Gove also said that increasing immigration had put an "inevitable level of pressure on housing and public services". Net migration is forecast to soon hit around 700,000 a year, double the pre-Brexit referendum high.

Mr Gove uses his article in The Telegraph to argue that the reforms are an attempt to clamp down on the minority of poor landlords and is not a wider attack on people who rent out homes.

Mr Gove writes: “There are a small section of landlords who treat tenants poorly, using the threat of eviction to silence complaints about poor standards, and demand extortionate rent increases.

"These renegade landlords, although also a minority, harm the reputation of the private rented sector, which should be celebrated for the choice and service it provides.”

He adds later: “Giving tenants the best possible future depends on supporting the overwhelming majority of good landlords as well.”

Some property experts said a knock-on consequence of the new reforms could be home-owners choosing to sell properties they were renting as it becomes harder to evict tenants.

Andy Shepherd, chief executive of the London estate agent Dexters, said: “It could drive people away from the market and the unintended consequence of that will be pushing rents up.”

Buy to let crackdown

The Bill is the latest move in the Government’s buy-to-let crackdown which began in 2015 when then-Chancellor George Osborne announced that tax relief on buy-to-let mortgages would be scrapped.

This was phased out between 2017 and 2020 and means that landlords who own properties in their own name must still pay tax even if their properties make a loss, a scenario that is becoming increasingly common due to high interest rates.

On top of this, in 2016, the Government introduced a three percentage point stamp duty surcharge for anyone buying an additional property. Plans to introduce minimum energy performance certificate targets will also land investors with bills of up to £10,000 per property.

Landlords have been selling up steadily. But those that are quitting the sector now also face higher costs, after Chancellor Jeremy Hunt’s reduced the capital gains tax-free allowance.

The Conservatives pledged to ban Section 21 notices, known as “no-fault” evictions, in their 2019 election manifesto after criticism they were used to unfairly oust honest tenants.

Use of the mechanism has soared in recent years, with almost 20,000 households served a Section 21 notice last year, more than double the number in 2021.

Other changes in the new legislation include applying the “decent homes standard” to the private rented sector for the first time and making it illegal for landlords to have a blanket ban on tenants in receipt of benefits or with children.

Investment Synergy - the government's focus on private landlord's NOT supporting the housing crisis - is surely an abdication on their part to provide the resources to meet the needs that are clearly required for renters.

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