The media has been full of Michael Gove’s plans to reform the private rental sector but also warnings that any more ‘landlord hammering’ will shrink this vital housing market and ultimately hurt tenants.

We talked to a long-standing and experienced lettings agency owner, Lewis Green, to gauge what all this kerfuffle means for his landlords.

Lewis runs St John’s Wood-based North London estate agency Greenstone, which he founded 27 years ago and manages 150 properties in the area and beyond including core postcodes such as Regents Park, Primrose Hill and Maida Vale.

Is the government’s plan to give renters more rights a good one?

“I think tenants already have plenty of rights, so it seems the government doesn’t really understand what’s happening on the ground – ultimately if there’s a breach in the agreement between tenant and landlord so you don’t really want to meddle with that.

“Also, most landlords want tenants to stay as long as possible, pay the rent and look after the property, not turf them out without reason.

“But the proposals will impact the type of landlord who wants to work or travel overseas for a few years, for example, but who would be nervous about going into the marketplace after these changes come in because the tenant will have greater rights to stay in the property.

“And even before the reform proposals were announced, we’d already seen landlords sell their properties because they weren’t enjoying being a landlord any longer – tax benefits have gone, rents dropped dramatically during and after Covid and some tenants weren’t paying their rent – and so on. 

“I think we’ll see more landlords selling up and even less stock going forward, which ultimately is going to make it more difficult for people who want or have to rent.”

Are landlords still buying properties in your patch?

“No not really – areas like this are only attractive to those looking for long-term capital growth because the monthly rent only just covers the mortgage and running costs – no one earns a living in this kind of area.”

If rising inflation a worry?

“It’s eating away at confidence but not for the reasons you might expect – I recently showed a mixed-use residential/restaurant unit that offered a 5% gross return on income but clients told me that, with inflation at 9%, it didn’t make sense at the moment, particularly if interest rates begin to rise.”

Is the current situation like the 1990s or 2008?

“Yes, I’ve seen several downturns. It is different this time compared to the 1990s recession because so far mortgage interest rates have remained low despite spiralling inflation, while the global financial crisis just made it more difficult to get a mortgage, but interest rates didn’t rise. 

“So far it’s been easier because the Government’s financial support package during the pandemic made people feel they were richer and more secure – and anyway they had nowhere to spend their spare cash.”

4 COMMENTS

  1. I understand that Michael Gove’s plans include amongst other measures, the following:

    1) All landlords will have to undergo a compulsory five year psychological review to assess their mental capacity. Cost to landlords is expected to be between £500 and £750. Any landlord failing, will be forced to sell their property to the sitting tenant for half the current market value or allow them two years’ accommodation rent free. A new Government quango called the Bureau for Landlords, Lettings and Safety (BALLS) will be established to administer all this.

    2) Landlords will not be able to apply for an eviction until a tenant is at least 18 months in areas. However although in certain circumstances judges will order eviction, no compensation for unpaid rent will be allowed. Some members of Generation Rent are calling for the period to be raised from 18 to 24 months.

    3) Landlords found to be be transgressing any of the new 418 new laws will be tarred and feathered, chased through the streets by Shelter members and then ordered to wear a yellow armband with a big red “L” on it for 28 days. It will be permitted also for renters (who must be registered) to whack offending landlords with rolled up wet copies of The Guardian.

    • Dear Malcolm, I was sitting in McDonald’s as can’t afford to drink anywhere else and I cannot stop laughing at your text. You really made my day.
      Thank you for lighting up my day and several other downtrodden landlords awaiting the wet wacking with said newspaper.

    • Even though your post is mocking the system, if anyone was to look at the current or proposed legislation you might be forgiven for thinking that was a joke too:

      Landlords under threat of criminal prosecution or unlimited fine:

      Must allow tenants to remain in their properties even if they do not pay rent.
      Must give back all rent if they do not follow the rules to the letter, even if it is not their fault.
      Are not allowed to claim tax on borrowing that is allowed for ALL other legitimate businesses
      Must pay more tax than anyone else when buying a property
      Must adhere to standards that do not apply to any other residential property owner
      Must not charge for ANY of the costs associated with letting the property to the tenant
      Cannot reuse to accept animals
      Cannot refuse to accept high risk tenants
      Must pay a special landlord tax levy (so-called licensing)
      Must pay for modifications to your property for certain tenants
      Be responsible for the anti-social behaviour of your tenants
      Can’t get rid of a bad tenant without someone else’s permission
      etc etc…

      Conversely:

      Tenants can, without fear of criminal prosecution or financial liability (other then a few weeks’ rent)

      Refuse to pay rent in the knowledge you won’t be booted out for a long time.
      Annoy your neighbours and behave in an anti-social manner with little or no consequence.
      When you finally do leave you do not have to leave the place in the same condition you received it, in fact you can smash the place up, leave all your trash and garbage and if you really feel like it, and you can do a shite in the middle of the carpet and leave it for the landlord, if you fancy.
      Finally, you can play the system to your advantage to the extent there are ambulance chaser lawyers willing to help you look for the most minor infraction and get you all your rent back.

      Seriously, you could not make this stuff up!

  2. Like it or not it is back to the 70’s.

    Govt is determined to reduce the PRS.
    It cares nothing for homeless tenants and there will be millions of them!!

    Wonder where LL will invest all their capital having sold up?

    Portugal perhaps.
    Nice villa on the Algarve.

    Back then there was adequate social housing and NO MASS UNCONTROLLED IMMIGRATION.

    How things have changed!!!

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