around 46% would be evicted within the following six months. For tenants, the abolishment of the no-fault evictions is a major boon. Landlords, on the other hand, may have a tough time getting their rent if they fail to accumulate enough evidence that the tenant is at fault. With all that landlords have to face regarding their investment properties, MPs have to work hard to make real estate remain a valuable investment for landlords, despite the difficulties surrounding rentals.
Labour Seeks To Control House Prices
The number of empty properties around the UK compared to the almost 200,000 homeless families are enough to make MPs st up straight and provide a housing solution. According to Labour, this solution is to control the growth of house prices. As it stands, it’s not unusual for the average UK family to spend half their income on housing. Not only is this figure high, the cost of living compared to the living conditions simply don’t add up. Families that earn decent incomes still find themselves cramped in tiny apartments that they can hardly afford. Landlords are caught between these figures all the time.
Section 21 Abolishment Places Landlords Under Pressure
In England, there are around 11 million private renters which provide quite a fair piece of the housing pie for landlords. But securing the right tenant isn’t always easy and when it comes to getting rid of problem tenants, landlords now have to wait up to 16 weeks for the long arm of the law to play out. Previously, a Section 21 no-fault eviction assured landlords that they would be rid of their tenants in eight weeks. This added layer of protection for tenants, however, means that landlords will have to follow the right steps in order for the eviction to be successful. This could be one of the means MPs are using to bring the cost of housing down, as investors will think twice before purchasing a buy-to-let property. First-time homeowners, however, will benefit from the reduced costs.
Private Rented Section Only Option For Many
Around 10% of the land mass in the U.K. has been privatized, which sets a sort of price monopoly in favour of the landlord as housing demand increases. A capped property price range, if brought into play by MPs, will reduce the reliance renters have on private landlords. The price capping, however, is still in discussion and until then, renters have the added protection of the scrapping of no-fault evictions. The ask is that the Bank of England caps the increase within the limits of inflation, at around 2%. While this all plays out, landlords may feel exposed and the need to protect their rental income will increase.
While the abolishment of no-fault section 21 evictions will have an effect on the house prices, landlords are placed in a precarious position.
Author: Sandy Kenrick
Sandy Kenrick swapped a fast-paced career as business banker for the insurance industry. Long hours and a new family quickly led her to look beyond the world of finance. As a work from home mom, Sandy now gets to do what she loves. Much of her work still involves finance and business, but when that mid-afternoon sun swings around it’s time to switch off the laptop, pour a glass of wine, and enjoy her growing family.