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Renters Reform Bill is chance to professionalise sector - PropTech chief

The Renters Reform Bill can be the perfect opportunity for the industry to become more professional - just so long as piecemeal legislation does not swamp it with red tape.

That’s the view of Neil Cobbold, a long-time commentator on the private rental sector and the managing director of automated payment service PayProp UK. 

He says: “Anything that drives up standards can only be seen as a good thing for the private rental sector but the lack of reassurances and detail in these reforms risks some landlords selling up at a time when rental properties are urgently needed.”


Cobbold says the reforms contained in the Bill - the abolition of Section 21 eviction powers, stronger rights for tenants to have pets, and mandatory membership of a landlord Ombudsman scheme - may be worrying for some in the industry but are all genuine concerns for tenants. 

He states: “The Renters Reform Bill is a golden opportunity to get these reforms right, but credible enforcement is key. Property professionals have pointed to a ‘postcode lottery’ across the country when it comes to enforcing current rules, which allows rogue landlords and agents to operate. We urge the government to address this as we see very few proposals to ensure better enforcement.”

Cobbold continues: “Increasing regulation in the PRS is nothing new; indeed, many of these reforms in England have already been seen in Scotland and did not result in a collapse of the private rented sector. But the volume of upcoming changes means there has never been a better time for small-scale landlords to seek out partnerships to help them navigate the new landscape. 

“Property ownership will continue to be a sound investment for the vast majority of landlords who provide safe, secure and compliant homes. But landlords who may not have the time to invest in adapting to these changes, or the capital to ensure their properties are up to standard, may be looking to sell..

“Those landlords currently self-managing will find that professional letting agents and landlords make a perfect match. The agents have the managerial expertise to get optimal return from their landlords’ valuable assets, protect them from the penalties of non-compliance and ensure their tenants have a great rental experience.”

Cobbold adds that there’s more change on the horizon, aside from the controversial Renters Reform Bill.

New Minimum Energy Efficiency Standard regulations are likely to become law in the near future, although the government has not yet given a firm date when the new rules will come into force. The proposed legislation – part of the government’s pledge to achieve Net Zero by 2050 - will lift the minimum Energy Performance Certificate rating for all homes in the PRS from the current level of ‘E’ to ‘C’. 

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    The issue with all of these points is everything costs money and this is at a time when interest rates are higher than a lot of the yields that people achieve. 
    Add in s24, and you're making a loss in personal name.
    Add in a letting agent, you're reducing your gross yield by 10%
    The RRB is only going to increase the likelihood of a tenant not paying rent and not leaving your property. 
    It'll also increase the likelihood of someone just using you for a short term let, costing you money in voids. 

    Overall, private landlords get paid a yield on their asset but essentially 'work for free' when it comes to management time and effort. The more you 'professionalise' the industry the more tenants will be paying for that free work.

    There really isn't any good news for landlords. There isn't a good enough return now and capital growth isn't going to happen for a long time.

    There are tonnes more issues that I can't be bothered to list and they're all big risks. Add in now that savings rates are comparable with a lot of the gross yields...why would anyone be a landlord?

    Kristjan Byfield

    Chris- what costs do you see arising from the RRB proposals? I am not aware of any proposed costs associated with the proposed changes, the idea is that S8 grounds will be strengthened especially around frequent arrears and ASB. My biggest concern would be the impact on the (already buckling) courts system leading to even longer waits for repossession hearings. Otherwise, I cant see much if anything for Landlords to be afraid of.

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    Margaret Thatcher sold off council houses because they cost more to maintain than the rent ,! This attempt to professionalise the industry is merely a smokescreen for politicians to impose a tax on the industry to fund a business that they will own and control. I think the MP for Dover is likely to run it, takes her mind off the problem of illegal immigrants coming through Dover,!

    Kristjan Byfield

    I think you've got LAT confused with The Mail Online this morning Edwin.

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    " He says: “Anything that drives up standards can only be seen as a good thing for the private rental sector.... "

    What, like a mass reduction in size leading to homelessness for all the people that can't buy?

    Kristjan Byfield

    The biggest impact on Landlords at the moment is S24 (already implemented- but can be side-stepped by becoming a business) and soaring interest rates- neither of which are caused or related to the RRB. There will be a reduction of stock, but that will drive up rents benefitting those remaining in the sector.

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    More cobblers from Cobbold.

    Kristjan Byfield

    What don't you agree with specifically? What scares you most about the RRB proposals?

  • Hit Man

    Just a plug to try and monopolise his business.

    Kristjan Byfield

    Is there anything Neil has said that you specifically disagree with?

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    Petition to stop the ending of shorthold assured tenancies - on Parliament Website

    Title is: Reverse provisions in Renters Reform Bill to remove Assured Shorthold Tenancies

    Copy title to browser and the petition will appear. Currently has 1296 signatures.

    Kristjan Byfield

    Not sure why a petition is needed- the RRB will stop ASTs and we will return to ATs. The fact remains, this is a lot of legislative work for little to no change.
    Want to do rent increases- you will still be able to do one once a year
    Want to sell- you still can
    Want to move back in- you still can
    Rent arrears- this should get easier to undertake action
    ASB issues- this should be easier to undertake action
    Cant serve notice- dont worry 85-90% of all tenancies are ended by the tenant anyway


    Activists are already campaigning to make it even more difficult for landlords to get their properties back. They are not satisfied now with the Renters Reform Bill.

    The perspective of agents and landlords are quite different.

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    I think we can all agree that the small landlord PRS is now officially dead, to be revived as a sort of larger version of landlords who have more properties and who will run more in line with other businesses- the unintended consequences are yet to be seen but I would guess at higher rents, more tests to pass to become a tenant and much more brutal repercussions to tenants who don’t watch their step. This new PRS will be far more profit driven and eventually will be a much bigger problem for the government to deal with. There will be no more housing in the PRS for the poor/ disabled/ middle aged/ families and who is going to pick this up? Authorities do not yet realise how easy it was to deal with individuals rather than corporations

    Kristjan Byfield

    As long as there is money to be made there will always be landlords- and there's plenty of money to still be made across all sectors and demographics. I think the type of small landlord will change- they will approach it more as a business from the offset (enabling them to sidestep S24) and go from there.

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    This so called Conservative government screws up everything it touches , as private landlords sell up and head for the door ! Also we need to shed a tear as to where are all the uncontrolled immigrants going to live who are invading our shores ?

  • Kristjan Byfield

    Margaret you might need to check in with Edwin- he can direct you to The Mail Online pages where this type of comment may be deemed acceptable.

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    Acceptable Kristjan, the increasingly vicious hate propaganda against landlords and their children went way beyond acceptable a long time ago
    Even if we ignore the discrimination and injustice of the totally biased regulations and taxes, the fact we have politicians who consider it acceptable to look the other way while the three big hate gangs conduct a campaign of abuse and mental torture targeting landlords children in order to terrorise and demoralise their parents in order to drive them out
    Whatever your view of landlords there is something fundamentally wrong and cancerous in a political system where the abuse and torture of defenceless children is considered an acceptable means of pursuing a political agenda

    Barry X

    I agree with everything you say here @AA except perhaps the very first word of your post - currently "acceptable" - might need editing because it confused me for a moment into wondering what this was going to be about!

  • Barry X

    Gosh, to my mind this Kristjan Byfield (the self-styled 'property viking' with a lower-case “v” apparently) is a tiresome fool! Like some extra-annoying little terrier, rushing around growling (with its pipsqueak little growl) and snapping at everything because it's insecure and also craves attention and “validation”…

    ...of course everyone does their best to ignore this annoying little terrier, trying to take-on and defeat their ankles, but its owner feels the need to apologise and say “he’s not *usually* like this” even though, actually, he is but not usually quite so blatantly as today… maybe this fine summer weather brings out the friskiness in him?

    All these smug, glib, over simplistic and of course ill-informed comments from @KB thinking he can take a pop at people and outsmart them, even though – unlike him - they actually *know* what they’re talking about...

    Take for example his post on this page at 10:50am where he says:

    “The biggest impact on Landlords at the moment is S24 (already implemented- but can be side-stepped by becoming a business)...”

    Ignoring the question of whether or not s24 actually has had the “biggest impact on Landlords” (it has for some, for others its just one of so many extremely adverse and counter productive measures) let’s look at his ridiculously naïve belief that it “...can be side-stepped by becoming a business…”…!!!

    I’m willing to bet he has never tried that himself! If he had he’d be a wiser and less arrogant know-it-all of a property Viking...

    Firstly you have to ask what “becoming a business” actually means… does it mean incorporating an existing “partnership” into a “limited company” or starting a new limited company (usually by just buying a readymade one “off the shelf”) and selling your existing properties to it?

    Long ago, provided that you owned all the shares in the company, you could simply transfer a property to it tax free – just like you still can between spouses provided the property is “unencumbered”, i.e. mortgage free. However that so-called “loophole” was closed, I think by Gordon Brown’s Government in their Finance Act 2004, meaning that ever since then a transfer of your own property to your own company is now treated as a “disposal”, i.e. sale.

    Rather neurotically that makes you both the seller and the buyer and so you have to pay double-tax… CGT for the disposal and SDLT (with the “2nd homes surcharge” of 3% on top) for the purchase... so that’s a dead-duck if it’s just supposed to save you s24 on one or two properties… from then on you have to pay all the annual costs of corporate admin too such as for year-end accounts…

    As for “incorporation relief” that’s become an absolute minefield in the last few years as more and more people have been turning to it in desperation to escape s24 (*and* other things too) so of course the sly and greedy government has been trying to “close-it down” with a number of test cases scaring and hassling all but the bravest and most determined - and with the deepest pockets and the most tolerance to years of litigation – to chance. Loads of “consultants” and small companies are selling “incorporation relief packages” to punters for truly hefty fees – that if you know enough about it you wouldn’t pay – and even if you then follow their “plan” exactly there’s no guarantee that in a few years’ time you won’t be retrospectively targeted and Mullered by HMRC.

    For a start “incorporation relief” can only be claimed by “legitimate” businesses… for a very long time now successive governments have legislated against landlords’ businesses being accepted as “trading” (even though many – such as the one my wife and I run - patently are)… instead they are always treated as only “investment” businesses and so taxed far more ruthlessly.

    Unless you have at least 6 or 7 rental properties and can prove that for many years you have been providing “services” in addition to the accommodation itself, then you have no chance and will eventually get caught retrospectively and clobbered for spectacular and ruinous amounts of all the tax you’d been trying to avoid by doing this, plus penalties and interest on top of all of that… will you be able to sleep until then?

    Oh, and you can’t just “incorporate” from your private portfolio of 7 very professionally managed properties plus extra “services”, no- no-no you can’t… you have to spend at least 18 months (but wiser to make it 2 or 3 years so as not to look too obviously as if you’re gaming the system) as a partnership first...

    There's even more, that’s just the basics, but I’m willing to bet our very own "property lower-case viking" hasn’t even got much of a clue about any of the above let alone the chapters below still to be written before you can see what a load of absolute bollox this man’s earnestly spouting about this and every other topic on behalf of Generation Rent and his Favourite Tories actually is.

    Rant over…. PEACE.

    (now go and have a calming outdoor tea-break in the shade, somewhere safely far away from the sound of that pesky little terrier).


    The bearded poundland russell quirke will be snapping at your heels shortly!


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