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.