Renters’ rights are important, but what about the rights of decent landlords?

One of Labour’s many pre-election commitments was to ban Section 21 of the 1988 Housing Act and MPs will shortly begin debating the Renters’ Rights Bill in the Commons. While some landlords manage dozens and even hundreds of properties, the vast majority are individuals who realised that investing in a property to let was a compelling way to save for retirement.

The combination of regular income from rent and the likely increase in capital value over the years made obvious sense. Most of these landlords treat their tenants decently, respond to concerns around the condition of their property and although mortgage interest is no longer able to be set against rental income, still enjoy a reasonable investment yield.

Inevitably, there will be reasons some landlords want to seek vacant possession. Their own children might need a place to stay. They might be moving to somewhere far away, or simply want to access the capital for other purposes. Section 21 set out the way any such repossession should be dealt with, and in most cases, it has worked well.

No-fault evictions

Of course, not all landlords are helpful, nor are they decent. They may take far too long to respond to issues of concern and then not carry out required work to a decent standard. Nor are all tenants angels. Some will treat their property appallingly and the law has to protect landlords in this respect as much as it has to protect tenants.

Labour has focused on what it calls ‘no-fault evictions’ to describe those cases where no fault attaches to the tenant but the landlord nonetheless wants vacant possession.

Angela Rayner, the current Secretary of State for Housing, Communities and Local Government is leading the charge for change. She has observed that last year, 26,000 households were made homeless because of what she calls ‘no-fault eviction’ and I would call a reasonable demand under the law by a landlord to reclaim possession of what is their asset. Rayner clearly believes that it is always the landlord who is at fault. She apparently refuses to recognise the many reasons why a landlord might want to repossess their property.

The Bill will apply to existing as well as new tenancies and Rayner says it will clamp down on what she describes as “unfair” rent increases. I am unsure how this will be assessed as in any market, landlords who demand uncompetitive rents are likely to be left with vacancies. In the real world, rents and prices are determined by the market.

Nightmare process

What might be reasonable for a one-bedroom flat in London’s Zone One would probably be enough for a four-bedroom house in other parts of the country. A nightmare process is likely to emerge that will make lawyers rich but not help landlords – nor, importantly, tenants, given that in many cases what will happen is what there are signs of already: landlords simply selling up and, in the process, making less rental housing available.

Rayner also wants to extend the Decent Homes Standard, no doubt well-meaning but also inevitably leading to fewer properties being available to rent. Some of the conditions required would simply make no commercial sense. Where I agree she does have a point is the requirement for landlords to implement Awaab’s law, so called after the tragic death of two-year old Awaab Ishak following exposure to appalling levels of damp and mould. In that case, the landlord was Rochdale Boroughwide Housing, a local authority landlord.

But as ever with Labour governments, their good intentions are likely to deliver only one certain outcome, which is even fewer places where those on the lowest incomes can find a half-way decent home – and that is the real tragedy.