Landlord Concerns Regarding Property Sales

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Products and technologies from our global brands, Norton, Lifeelock, Avast and Money Lion See it in action at genendigital. com A huge amount is about to change for anyone who rents their home or owns a rental property in England. And in today's Moneybox Lve podcast, we're answering your questions. The Rentter's Rights Act comes into force on Friday and there is a lot in it from ending so called no fault evictions to limits on rent increases. It will make a big difference to eleven million private renters two point three million landlords After all, for tenants, it's their homes We really look for you know a place where we have that sort of stability, you know, where we can really concentrate on our careers and we can just come home and just chill out, right? Well, for landlords, this could be their livelihood and financial security Whatch the lel two If the tenant stops paying their rent In the meantime, who's going to pay my mortgage and provide my income It's important everybody understands what's changing, so what do you need to know? To explain all, I am joined by Rachel Williamson, Director of pololicy at the Chartered Institute of Housing, which is a not for profit professional body. I'm joined by Ben Beedle, Chief Eecutive of the National Residential Landlords Association, and by Duran Bachter, pololicy mananager at the Housing Chity shelter. Hello Greetings Greetings, indeed. Good to have you all with us. Rachel, can you just explain the biggest changes? Because as I say, there is a lot in this act Yes there's a lot So I guess five main changes from the first of May. The headline change is ending no false evictions, which people will have heard talked about a lot I'm sure already. That means that landlords in the private rented sector won't be able to evict tenants without a valid reason. Sometimes called a section twenty one eviction. Absolutely. That's right. The act also ends the use of fixed contracts. so all tenancies in the private rented sector will be open ended going forward and that's designed to give renters more flexibility tenants can then end them with two months notice or less if agreed with a landlord There will also be fairer rent rules, so landlords can only raise rent once a year and renters can challenge unfair hikes through an independent tribunal There'll be no more bidding ws, so landlords must stick to no more than the advertised rent prs and can't ask for more than one month's rent upfront when the tenancy is signed. And finally, it introduces anti discrimination measures. So the act makes it illegal to refuse tenants just because they receive benefits or have children. Thank you. So those are the main points. There is a lot more detail and a lot more smaller partarts of it as well. onn that rolling tendency, you switch from fixed tendencies to rolling tendencies, though Richard has sent us this voice note just before we came on air My existing contract says I have to give one month notice Go forward, does the new arrangements mean that I now haveave to give two months or does my existing contract still hold Thanks, Richard., Ben. what would you say Well, it's tricky to know without having the contract in front of us But by default, there's no notice period for a fixed term. So they may not be able to serve notice yet from the first of May and the tenant's notice in the New World is two months, but the act does say landlords can agree a shorter notice in writing. So if there's a shorter notice period in the tenancy, it may well reduce their notice period. We'd need to have a look at the contract to be absolutely one hundred percent sure on that. So probably worth looking at that and maybe talking to the landlord as well. Bent, today we're answering questions about what it means, what it changes for people like Richard. We don't want to spend the entire programe rehashing the arguments for and against this act. But broadly speaking, how are your members feeling Yeah, well I think I mean you're right, the changes are coming and it's absolutely incumbent on landlords and their agents to be all over this like a rash. It comes in on Friday and there's things that landlords and their agents need to do. What exactly people choose to do will depend on their circumstances. and I think we're hearing lots of different concerns about the new world But often the thought of a new world is actually far worse than the reality. and I hope that that's very much the case on this occasion. But there will be big changes for student landlords. The new possession regime will be completely different and what will happen to supply in the new world? I Th those are all of the sort of queries we're getting. And we're going to get into a lot of that in the next half an hour. And Darren, what about it at Shelter? Have you welcomed these changes Absolutely. we welcome them. Yeah, renters are We'in touching distance now of the changes in the Rnter's Rights Act, which we would say are game changing and Most notably the ban on no fault evictions, which since it was first promised in twenty nineteen, there's been over one hundred forty four thousand U, section one Sction twenty one, sorry, court claims issued in the courts. But as I said, come Friday, renters will finally be free from the injustice of those. evictions, which for far too long have silence renters prevented them from making offtten very reasonable complaints about disrepair, be that dampamper mold or dangerous conditions. given un more uncrupulous landlords a way to wriggle out of their responsibilities and crucially pushed many, many into homelessness, there's lots of other positive changes in the act, which Rachel mentioned, coming in on Friday, in particular limiting those extortionate demand for rent in advance at the start of a tenancy and the ban on discriminatory, no child and no benefits policies. So yeah, a big day on Friday. We're going to dig through a lot of that. This is quite a political issue. So let's just outline what the different parties have to say in England where this act is coming into force. It's obviously a flagship labour policy and the LibDems say they welcome the ban on no fault evictions. The conservatives say there's a risk this could reduce the supply of homes by forcing some landlords out of the market. And Reform UK says this is a disaster for renters and that supply will fall and rents will rise. The Green party say they welcome it but they want further reforms like rent controls. That is the politics out of the way. Let's answer some practical questions now Rachel, this comes in from Friday, may first. Will it replace existing tenancies? Yeah, absolutely. I mean effectively, everything changes on the first of May. So what are currently called fixed term assured shortthold tenndancies or ASTs for short will be abolished and they'll be replaced with what are called assured periodic tenancies. That basically means if you're currently in a fixed term contract, it will convert to a rolling periodic tenancy from the first of May and all tenancies will roll on from month to month or week to week depending on your arrangement with no end date. That's designed to give renters more flexibility. Those new rules apply to your tenancy automatically, even if your landlord doesn't update your tenancy agreement, and your landlord can't include anything in a tenancy agreement to override those protections. Final thing to say is the government has published an information sheet that landlords are required to give to existing tenants byy the thirty first of mayay to explain all of those changes Now I should say as well, this is just for the private rented sector. So if you're in social housing, it won't apply yet, that's coming in next year. Sebastian's been in touch to say most of what's coming in mirrors what we've had in Scotland for several years now. The market took a minute to adjust, but it did. Rentters are better protected now. Rachel, this is, as I say, just happening in England. What is the situation in the rest of the UK Yeah, it's a great question. I mean across the UK, we're already seeing different approaches to private renting with some nations further ahead on reform than in England. So in Scotland, for example, no fault evictions were abolished back in twenty seventeen. All tenancies there are now open ended. Landlords must use specific legal grounds to regain possession with cases going through a tribunal rather than the courts. In Wales, reforms were introduced in twenty twenty two. They strengthened tenant protections with more standardised contracts muchuch longer notice periods. So while no fault evictions still exists there, they're more restricted, so they can't be used in the first six months, for example, and they require significant notice. And then finally in Northern Ireland, they're a bit behind when you look at the reforms, but moving in a similar direction. So no fault evictions are still in place, but notice periods have already been extended and the government there has proposed further reforms, including ending them altogether Overall, England's changes bring it much more into line with the broader UK trend toward greater security and clearer rights for renters. O. Wellough Sion twenty one, the end of no fault evictions is, as we said, a key part of the legislation. But there have been reports of landlords evicting tenants before those new laws come into force. Kaylee's been in touch to say she was served with a section twenty one notice last Wednesday that she believes is because of this act. She says I've already been there five years and I could have stayed forever. guess we're collateral damage. And also here's Lynn, who's had to leave her home after seventeen years. At the end of January this year, I got an email from the managing agent saying that the landthlord's circumstances have changed and he's looking to sell will be in touch and dueourse with the Sction twenty one So it was given official notice middle of February. Yeah, complete shock, absolute shock. I mean, completely out of the blue, was not expecting it at all and started looking very quickly realized that just with cost of living and sort of rental prices now in London have having increased so much in the last seventeen years that I'm priced out of renting by myself again. So then to have sort of a serious conversation with myself and go, right, you need to look at flat shares, house shares renting a room somewhere That's going to be verys very hard after having your own place for seventeen years. It's very hard because you get very, very used to living by yourself. I didn't want to have to live for somebody else. It's a very bitter pill to swallow. You have the moment of where you want to yell and scream and rant and cry and I had that moment. I had a weekend where it was just completely overwhelming and everything got on top of me And then you dust yourself off and you go right, I need to now find somewhere to live Thanks to Lynn for that. Darren has shelter seen other tenants facing this Yeah, I mean, firstly, it's really terrible to hear Kayley and then's experiences and we'd really encourage anyone facing eviction to visit Selter's website, get the help you need to assess your options. But in answer to your question, yes, I think it's important to say here that we haven't seen evidence of this happening en masse so you know, it's not necessarily a widespread ice but I understand that's no consolation to Kayley, that's no consolation to Lnn We have seen some landlords are using this window to evict tenants perhaps to get in ahead of the reforms, which is a real shame and much like Ling's example, the fact that it's so hard to pin down exactly what the reason for the eviction is and why it's happening really just shows how badly these changes and needed, landlords who are doing right by their tenants really don't have anything to fear in the changes and they'll still be able to evict tenants where they have a legitimate reason after the first of May Rachel, what are you seeing? Are you seeing landlords leaving the market because of the changes coming on Friday Well, I think we're certainly seeing some landlords exit and Ben will be able to speak to that too. but I think it's arguably down to a mix of factors. Regulatory change of courts will have an impact when people are thinking about what to do, but there's other stuff at play. There's tax changes, there's rising costs. There's obviously a pretty uncertain global environment at the moment and people having to think about how they manage their finances if they're a landlord I guess the thing to stress is if the landlord sells up, the property itself doesn't disappear. it's still there. in some cases it might be bought up a landlord growing their portfolio. in some cases, I know that the tenant can be in the position where they're able to potentially purchase it themselves. As Tarn said, many landlords are continuing in the sector and want to deliver a good service. So I think we need to be careful not to make early conclusions about the change because it's just too early to call it. And as Ben said at the beginning Often the thought of change is worse than the reality, so hopefully we'll see things bedding down pretty soon. We've had a message from Anna on social media who says so irritating when landlords moan about increasing tax and red tape and how they'll sell up, then it turns out they're nearing retirement age. so it's not a business decision at all, but a lifestyle decision. Ben, what would you say? Do you think this legislation could simply be hurrying along a change in who actually rents out homes in England Yes, I think it will, But I do want to just point out that the use of seection twenty one is a perfectly legitimate way to bring a tenancy to an end, and actually what those two callers have is actually a reason. And that just shows some of the unintended consequences or maybe intended consequences of the of the legislation, landlords are still going to sell in the New world. And I think for landlords that are out there that are listening, you will still be able to. I they won't be able to ask the tenants to leave because the tenants asked for repairs or objected to a rent high.'akes a big difference. Of course, absolutely. But I don't think that was the case with those callers And the downside for those talents is because if you take Lynn, She clelyn't had much of a rent increase in those seventeen years and has turned to the market and found everything terribly expensive. And she's right. And that's why we have to be very, very careful A in the way that we speak about these things because seection twenty one is not a dark art. It's a lawful way to bring a tendency to an end. And actually if we look at the statistics, well the last year was the lowest number landlord repossessions brought to court since COVID. And in the last quarter, July to September, last year The number of people at risk of homelessness due to being issued with the seection twenty one was down almost twenty percent for the same period the year before. So it is right and proper that landlords take a look at a whole range of things because they are businesses. And I think as soon as landlords get to grips with being a business, they will make the right decisions for their The ultimate cookout starts with the ultimate ingredients. At Whole Foods Market, no antibiotics ever burgers and kebabs are prepped and ready to throw on the grill Fire up a juicy ribeye, grab creamy potato salad and savory flatbreads from the prepared foods department, and round it all out with three hundred and sixty five brand condiments, chips and dips at everyday low prices. Whole Foods Market. Make your summer sizzle. I cashed out my entire four hundred one K thinking someone stole my identity A fake email cost me my dream home after I sent my personal information to a scammer. My AI agent wired thousands to an account I'd never seen If billions of people feel unsafe, that's no longer a security problem. It's an economic one. At Gen, we're building the trust layer for a more fearless planet with products and technologies from our global brands, Norton, Lifelock, Avast, and Money Lion See it in action at genendigital. com business We've heard from Paul who says that he had a three year contract. he was one year into it, Rachel, and that from Friday, he knows that his landlord has said he's going to evict him on Friday because then now it's a rolling tenancy and the landlord wants to sell, he'll be able to kick him out rather than remain keep the contract going for the full three years be right that if a tenant is currently on a fixed term contract at the moment, they'll actually have fewer rights if the landlord wants to sell from Friday I mean, that's a tricky scenario. and as I said at the beginning, all existing fixed term contracts effectively change from the first of May and move into the rolling contract. So that three year fixed end date moves into a rolling. And if the landlord is wanting to give notice to ev vict because they're wanting to sell, that's a legitimate ground as long as the tenant has been there and it sounds like Paul House for over a year And sadly, with any legislative change, there can be unintended consequences. this might be one of those. As Ben said earlier, it's difficult to comment on the detail without seeing the terms of tenancy agreements, but broadly speaking, fixed term contracts come to an end and move to rolling. So I think Paul may well be losing out to this one, but just to stress he can't be evicted on Friday. The landlord could serve not ts which of course needs to be of a set period to then give Paul time to find somewhere else. I think the thing to stress as well though, is that legislation can't possibly anticipate every possible scenario. The bigger question of are the principles of reform right and I would say they are. And really briefly, Sally's just emailed to say, I need to sell my property in the next couple of years. Where do I stand? Can tenants override my sale? But no, selling is one of the reasons why after twelve months a landlord can ask their tenants to leave Yes. OkayK, Thankk you very much indeed. Let's get a landlord's perspective on this because If they evicted a tenant and then they don't sell or they move a family member in, they'll then be barred from letting the home to new tenants for twelve months. Sue is a landlord and also works as a letting agent, and she says that's worrying her It's totally taking away any control for landlords over their own property because the grounds that you've got in terms of being able to evict a tenant now much tighter. but if you take the ground for example where you want to sell your property, if you can't sell that property and you've had to evict the tenants get vacant possession to sell it You then have to leave it vacant for twelve months before you can retenant the property. Now, we've got a housing crisis in the UK. so please explain to me where the sense is in having any property sitting vacant for twelve months You can see why the government is trying to close a loophole where a landlord could evict claiming that they're trying to sell and then actually say, o, we couldn't sell it and rent it out again. And I suppose some people listening there would say, well, any property can sell, you might just have to drop the price a bit Yeah, I mean, I wouldn't want landlords to be forced into some sort of fire sale. They should be able to sell at the appropriate price. And yes, you know, dropping the price may not be an option, as is selling to another landlord. And we'd absolutely advocate that. But this is one of the concerns that we have. know we referenced Scotland earlier on in the program as being sort of the the bellwather of the sector that we want. we should just remind ourselves that Scotland is the only area in the UK that's dedicated it as having a housing emergency and demand massively outstrippp supply. So for us, we thought that a happy medium would have been a shorter period. but this is something that landlords are going to have to factor in and deal with because there isn't going to be any immediate change to this and it is something that we will have to contend with. Personally, at a personal level, I think it's absolutely bonkers that government would rather have ty empty for a year. It just doesn't seem likely that properties will be sitting empty for a year, doesn' it? Paps It's a disincentive. it's not a punishment that's likely to be happening en masse. Well, I think that's something we'll have to keep under review and we'll be keeping a watching brief over it. Okay, let's hear from landlord Peter now who's also been in touch on evictions What should a landlord do if the tenant stops paying the rent Wait for two months and then issue a section eight then write another Six months or so for it to go through court In the meantime, who's going to pay my mortgage and provide my income This is going cost probably about three thousand pounds if we go to court. I have been a landlord for fifteen years. I have issued a section twenty one Im Basically, it was just a note and the tenants left. What's going to happen in the future? We've got to go to court OkayK, Ben, a Sction eight notice to evict is one where the landlord has to explain the grounds for eviction, which could include anything, couldn't it? anti social behaviour, nonpayment of rent, or something like the landlord wanting to sell the property. And just like with a section twenty one eviction, you only then have to go to court if the tenant doesn't leave. But I know the NRLA has got worries about what this might do to courts. So explain your concerns Yeah, I think I mean the concerns are shared by ministers. It's Matthew Pennicoke that said the court system is on its knees and this is an area that we absolutely agree with. I think the issue in the new world is that you have extended notice periods, including for rent arrears. But over and above that, you're expecting a broken system be more forensic in the analysis of the breach because actually what we're looking at is establishing whether there is merit behind that reason. And for all its faults, Section twenty one was a very good way of being able to prove or deal with antis social behaviour. the world ve that it's going to take time, it's going to need more resources. And I don't think that that quite rightly strikes the balance. Typically, I think landlords will be looking around a year to get possession of their properties. At the moment, it's nine months, and I think that can only increase. And so it's incumbent on landlords to make sure that they fully reference their tenants at the outset And if there aren't guaranteors available, there won't be rent in advance, you will have to take a view about whether or not it is worth taking the risk. And that's on your head. The Ministry of Justice told us that they expect reforms to reduce pressure on courts in the long term and said to support them now, we're recruiting up to a thousand judges and tribunal members across all courts and tribunals this year We touched on the changes to rolling tenancies. As we say, all current fixed term contracts are going to convert to these rolling tenancies, allowing tenants to end their agreement at any time with two months notice. We've had a lot of questions about how that's going to work. Let's hear this one from Ellie students with a tenency that runs to the end of June this year How will the change in the law affect us? Do we have to give notice on the first of May in order to leave the property at the end of the contract? Or do we have to stay for two whole months after giving notice What about the rental agreement we have for our new house Is that still valid We're due to move in on the first of July It's all quite confusing. Being students we definitely can't afford to be paying two overlapping houses Please help. Well, Ellie, we live to help here at MoneyBox Live. And then what does this mean for students like Ellie? You want to end their tenency to Go home for the summer Yes, well, I mean, the transitional period that will be introduced is going to require landlords to let tenants know if they intend to rely on the student ground, the HMO ground. But certainly for Ellie, the July tenancy will be absolutely fine. I think this is an area that our members have a great deal of concern over and tenants as well because this is all around It's all around the cyclical nature of the student market. So in the new worldld, her contract will convert to a periodic tenancy, and she will be able to give two months notice on the current tenancy. Or presumably she can give her notice well in advance to say, this is the date at which I'm planning to leave. So you don't have to worry about it closer to the time. Absolutely I would encourage that sort of dialogue between landlords and tenants. You know I think a lot of these regulations work on the basis that landlords and tenants don't communicate with each other. And I think that is the key takeaway. Landlords are going to have to improve their soft skills and be speaking with their tenants, particularly when it comes to the student market to get an assessment of when they are likely to be leaving and be able to manage things accordingly. And there's certainly a lot of confusion around this. We've been contacted by Nottingham University's Students Union Advice Organisation Saying they've been seeking clarity on what it all means for student tenancies. Kathy says, I'm a student landlord. Student groups who are forever falling out will be able to give two months notice as soon as they move in. This means they could leave in November and landlords could face ten months empty before the next year's group moves in. Thank you very much indeed for that. This couple got in touch because their letting agent says they need to pay se hundred pounds for an extra month's rent because of the act. Now we're not using their names because they're still trying to negotiate So we have a fixed term agreement ending on the twenty second of May. And on the twenty second of April, we notified the agent that we were intending to leave on the twenty second of May They've rejected this saying that because of the new act We would have to give too much notice And so it'd be liable to pay rent until the twenty second of June two months coming from the new act where the notice period is two months with the rolling contracts. Obviously we can't do this, but we've signed a tency agreement on a new flat, which we're moving into in May, so we can't pay two lots of rent And I think more importantly, there's nothing in our current fixed t contract that states we need to give two months. They're overwriting the terms of the current agreement with the new rules that are not yet in place You would have expected that two months ago, they would have let us know, if you don't want to stay, let us know now, there was nothing from them So we just assumed that we'd be able to leave when our fixed term ended and we've signed a new lease because of that. So it's just been a nightmare Rachel, a nightmare, briefly if you can, what should happen in that situation Well, that doesn't sound right to me, Felicity. The Rnter's Rights Act changes won't be applied retrospectively in a way that alters an already valid notice period. So effectively this couple have given notice before the changes on the first of May, There's nothing in the tenancy agreement suggested they needed to give more than a month's notice. A month's notice should have been absolutely fine. So I think they need to go back and challenge that and if needed, go and get some advice from shelter or citizens' advice Thank you very much. Darren, we've touched on the fact that this new law will also try to prevent discrimination against tenants who have children or claim benefits. And I should say this part of the Rnters Rights Act actually extends to Wales as well, comes into force there on the first of June. But what is that going to changeed do you think for Britain'sters? or for England's renters, excuse me in Wales Yeah, so the outright ban on discriminatory policies and discrimination against renters who have children or are in receipt of benefits will make it essentially explicitly illegal to refuse to renters because of those reasons. I'm It builds on existing rules. so in the Equality Act renters with particular protected characteristics be that disability, race can make a claim for discrimination, but we know that that's pretty tricky and it doesn't apply to all renters with children and claiming benefits. So this we think is an important line in the sand, which should hopefully mean that some of those more Unscrupulous landlords aren't continuing to keep hold of those policies. But we do recognise, obviously that discrimination is something that is really tricky to Pin down And there are other important measures in the bill, sorry, the act, such as the limits on rent in advance requests, which again, we know often