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Agency calls for Landlords Reform Bill to redress rental balance

Leaders Romans Group is calling for a Landlords Reform Bill to balance the challenges and apparent disincentives now deterring landlords from remaining in the rental sector. 

In a recent survey conducted by LRG, landlords called for a measure that ensures that they are not disproportionately penalised. This Bill would recognise landlords' essential role in preventing homelessness and provide the necessary safeguards to encourage continued participation in the rental market. 

The Bill could include dedicated housing courts to speed up the legal process, a repeal of Section 24, and an increase of social housing stock.


Allison Thompson - National Lettings Managing Director at Leaders Romans Group - says: “Over the years, numerous changes, including regulatory measures and alterations to mortgage relief, have significantly impacted the position of landlords, leading to some considering selling their properties. These changes have inadvertently affected the private rented sector's capacity to provide homes and support to those in need.

“A repeal of Section 24 is needed, as Section 24 removes a landlord's right to deduct the majority of their finance costs, including mortgage interest and arrangement fees, from their rental income before calculating their tax liability. It is putting up costs, which puts up rents, which contributes to hardship and homelessness.”

“Over 29,000 landlords signed a recent petition calling on the Government to reverse Section 24, but the government confirmed they would continue to set mortgage interest relief against rental income only at the basic rate of tax. Due to substantially increased costs (not only of property finance, but of energy and building materials) this change is much needed.” 

In support of the call for a Landlords Reform Bill, numerous landlords highlighted the urgent need for reform in LRG’s survey:

Graham Clarke of Gosport, comments: "The Government do not seem to understand that the changes they've made mean that there will be much less choice for renters. Similarly, the blunt knife of interest rate increases is also driving landlords out of the market. Very short-sighted by both the Government and the Bank of England."

Another landlord says: "In the future, landlords will take a greater risk when entering into an AST with a 'new' tenant. As a result of the added risk, increased costs and increased compliance, many landlords will leave the PRS, reducing availability. This is detrimental to tenants.   There will be a further decrease in the number of rental properties and an increase in the number of applicants considered too risky to be offered a tenancy."

And another: "More landlords will sell up, so less rental properties available and at higher rents for tenants."

LRG says that as homelessness rates continue to rise, the potential for an even greater increase in homelessness looms if more landlords are compelled to exit the market. 

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    For many landlords the abolition of Section 21 is much more important than the repeal of Section 24. The majority will not hand their properties over indefinitely to tenants.


    Maybe Ellie but for others it is not. I know a landlord that is currently paying an effective rate of tax of 90% because of S24.


    I am sure that is right, John.

    However, 40% of landlords don't have a mortgage, and those who have inherited property don't get any tax relief at all on the inheritance tax bill on the properties - not even at the marginal rate. The interest rate on the inheritance tax debt is 2.5% above base rate.


    Also the Section 24 point, is the current argument of the activists. They say that landlords are selling due to that, not the impending abolition of Section 21.


    Ellie I'm not saying that the promised abolition of S21 isn't important and that it isn't having a negative effect on supply but do feel that perhaps you're not fully appreciating the effects of S24.

    The article is aimed at reducing homelessness and the landlords that will be feeling S24 the most are generally portfolio landlords. So if they start selling up or exit completely then that will have the greatest adverse effect on homelessness. Plus S24 is a strong limiting factor in making the numbers work for new investment.

    I'm not sure what points you are making in inheritance and activists, so sorry I can't comment.


    I hope that they repeal Section 24, John, don't get me wrong.

    However, Section 24 has been brought up frequently now as a diversionary tactic from the impact of the abolition of Section 21.

    Did you listen to the evidence being given to the Parliamentary Committee recently about the Renters Reform Bill? If you did, you would know what I am talking about.


    I think we'll have to agree to disagree on the importance and impact of S24 Ellie. Landlords have been quitting since 2017 and that was before the promise of the abolition of S21 became a reality, though of course it still isn't with us. To be honest I'm wondering if Labour will actually introduce it as they will not want to deal with the aftermath. We'll see.
    I don't think S24 is bought up nearly enough so don't see it at all as a diversionary tactic. The problem is that many people do not understand how it works and what it can do. I've even had to explain it to accountants who were absolutely dumbstruck when they realised the potential effects.
    S24 and S21 are both having an impact and some who have been affected by S24 will see S21 as the last straw (along with all the other last straws!!) and will now take the decision to sell.


    A Landlords Reform Bill is pie in the sky.

    The bill going through Parliament at the moment is the Renters Reform Bill.

    I do understand because I was paying more than 100% tax. I did everything I could to clear the debt - and I think that that was the right approach.

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    Next thing will be for owners to pay tenants' CT defaults!

  • Barry X

    @EE & @JMcK... both of you are right and make good points.....

    The arbitrary, illogical and utterly unfair imposition of S24 on the PRS - but of course absolutely no other industry or business sectors, only ours, and only to exploit, penalise, target and demonise "hated" landlords - was and still is a total disgrace.... especially coming as it did from a supposedly Tory government (but by then an already highly incompetently anti-business and strong left leaning one).... it should OBVIOUSLY be ABOLISHED ENTIRELY and the sooner the better.... but there is absolutely no sign of that happening, or of the ignorant fools infesting Westminster of even giving it the slightest thought.

    I've been involved, in depth and very "hands on" long enough in the PRS to fully understand how the original introduction of S21 was the critical catalyst that led to the rescue of what until then was a completely dysfunctional and failed system of stagnated sitting tenancies for all... created by year upon year of increasingly hopeless labour governments and their ideologically fixated and driven policies that were all a glaring failure and incapable of delivering anything remotely beneficial, yet just *had* to be forced on the nation, then tinkered with and made successively even worse....

    ...it was Mrs Thatcher's government that rescued the UK from those decades of decline and failure and, among other things, created the solution - S21 and the AST - to enable the PRS to emerge from the abyss and, until being steadily attacked and successively undermined and dismantled by a long succession of highly detrimental measures only in recent years.... the PRS grew dramatically, created wealth for investor and enormous choice and flexibility at fair value for tenants... and basically flourished.... all it needed was to be cherished and nurtured.... but we know what's been happening instead!

    By the way, as well as retaining S21, if it was up to me I'd abolish (or at least very significantly amend) all the legislation introduced in recent years that has undermined it by using it to bully landlords into compliance with unrelated (and often absurd) compliance such as you can't serve a valid S21 if you can't prove you issued your tenant with the government's B.S. and not very subtly "we're on your side and against your nasty landlord and this is our how to rent guide with clues in it to help you scam your landlord and/or get away with all sorts of things if you're smart and paying attention", oh and not just provide a copy of it to them but to still be allowed to serve a critical (but unrelated to the "compliance") S21 you have to be able to prove it was the current version/revision of their B.S. document you dished out at the time too!!....

    ....and all the other undermining "compliance" now needed in order to block all the loopholes specially created to help tenants (never landlords) break the law as it was intended and not actually have a real AST after all because the poor landlord has been caught out....

    I'd also clarify and reinforce the now long forgotten original intention of the S21 (quite simply a mandatory no argument, unconditional ground for possession on two months' notice from the end of the rent period) if it were in my power and up to me.... i.e. I'd make it an OFFENCE for a tenant (resulting in a CCJ and appropriate penalty for the tenant) to ignore a valid S21 without an incredibly good reason for doing so (which they, not the landlord, would have to prove) and still be in the property after the notice period had expired... having to go to court to have it enforced and to obtain a possession order was NEVER intended to be part of the normal process and is a nonsense and abuse of court time and resource.

    Imagine if, by law, everyone was expected to normally breach ordinary contracts, and consumer agreements and everything else, and always have to have them judged and enforced?!

    Plus abolish the stupid Tenant Fees Act 2019 with all its damaging unintended consequences.... few people (agents and landlords included) seem to realise how huge an impact its had on everyone's workload to make it free for anyone to apply for, and make offers, on absolutely any property anywhere no matter how hastily or superficially they glanced at the advert or how little research they've done or how unsuited they are to it or it to your criteria, or how serious (or these days most likely not) they are about it.... plus - outrageously - this law makes paying rent in effect merely optional and non-payment risk and cost free....

    ...[just to explain that point: apart from nominal interest at way below current rate... if you were a tenant with a credit card debt costing you 38% APR and the credit company entitled to charge you in full for all *its* internal and external debt chasing and recovery costs, but by law your landlord can only charge 3.5% over base, at least in theory, but in practice can't chance you for it - so it could never be enforced - because by law absolutely none of your landlords costs for anything can be recovered from you.... so would you pay your rent on time or default on it and use the money to clear so of your credit or debit card debts first? The answer must be "duh.... forget the rent!" - the genius of the Tenant Fees Act, eh!].....

    ....and so once again, as with S24 and all the other specifically anti-landlord-only legislation, the unfair anti-business nonsensical Tenant Fees Act 2019 *only* applies to our industry and would never be imposed on any other ever - it seems only we hated landlords are banned from recovering fair and justifiable collection costs from defaulting tenants and we even have a cap (and arbitrary and unfairly low one, naturally) on the interest rate we can charge.....

    ...and so on.... and so on...




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    excellent post - sums the poor government decisions up perfectly

  • Noel Wood

    Barry X

    Thanks for posting your interesting and very telling case history @NW....

    ...although a very large number of people did, long ago like you (but mostly not *as* long ago as you, probably more commonly from around 2001-3 onward) purchase a BTL as a long term investment and/or pension, I certainly wouldn't call you "a little tadpole" (you are too modest!!) considering you had built up to a portfolio of 30 before you saw the sector starting to come under attack and - with great prescience - began planning to exit the PRS and redeploy your equity.... personally I'd say you were and are very much a professional portfolio landlord - even if thoroughly disenchanted like the rest of us now - and at 30 units one of the bigger players so in the top few percent by size of portfolio, as well as exceptionally experienced in terms of years in the business having - like me - got in long before the end of the 90s.

    I'd be REALLY interested to know where you're redeploying your net equity after steadily disposing of your various rental properties, or thinking of investing, or any other ideas or suggestions you have.... the great things about property (without undue government meddling and harm) are the combination of income PLUS capital growth, as well for most people the ability to borrow to buy (nobody will knowingly lend you money, ordinarily and so far as I know, to bet on horses or buy shares with) and then use gearing and other people's money (via the bank) to grow.... its hard to beat all that and so its an even more bitter blow for us to have learned so much and come so far with it only to now have it all taken away from us!

    As it happens I also, in parallel with managing our properties, spent several years trading in my own right (on a small scale with some of my/our money) in derivatives... a very interesting, as well as quite stressful and demanding, occupation (with wide ranging research the way I did it) and a MUCH harder way to make a living.... *not* for the faint hearted or reckless (risk management and discipline is key), that's for sure. But based on that I of course also learned plenty about stocks and shares, commodities, tradable and trackable indices and other investment "vehicles"....

    ....and so I can see that a sensible reasonably risk averse person who isn't greedy or in a great hurry would be - or at least would HAVE BEEN - MUCH wiser sticking mainly to a well defined properly category/class in which s/he can confidently build a business/portfolio to generate a much more reliable income, as well as quietly grow equity/value too to build wealth and security... the joy and benefit of a properly run PRS....

    ....but, sadly, the good years for doing that are now over for the PRS and it's time to move on and find something new....

    So, what is/are the alternative(s)?

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    Us at Accommodate-UK Ltd started in 1980 w large borrowings - but now only 8pc gearing so getting the benefit.
    Agree re Labour so will be more difficult.


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