Nearly half of landlords and letting agents likely to bow out of market

Nearly half of landlords and letting agents likely to bow out of market

Nearly half (46%) of landlords and letting agents are more likely to remove their investment – some or all of it –  in the private rented sector as a result of the Government’s plans to end so-called ‘no fault’ evictions by the abolition of Section 21.

The findings come from a new survey by the Residential Landlords Association of almost 6,500 landlords and letting agents, its biggest ever response.

The research also found that over 40% of landlords are waiting for other planned changes by the Government to become clearer before they make decisions on their ability to provide homes to rent.

In April, the Government announced plans to end Section 21, alongside proposals on improving the Section 8 process, under which landlords can repossess properties on grounds such as rent arrears or anti-social behaviour.

This process requires landlords to apply and be granted permission to repossess via the courts. The RLA says that official data shows that it takes over five months on average from application to repossession.

According to the survey, of those landlords and agents with experience of such repossessions, 79% did not consider the courts to be reliable. Almost 91% supported the establishment of a special housing court, bringing together all housing disputes under a single body.

With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s survey found that 48% of respondents would be encouraged to purchase a property to rent with a tenant in situ if they could reclaim the 3% Stamp Duty levy on the condition that the tenants can remain in the property for a year or more.

The survey also found widespread support for new grounds to be established upon which landlords can regain possession of a property. This included to sell a property and to ensure tenancies can best meet the needs of certain groups such as students, who do not require the indefinite style tenancies being proposed by the Government.

David Smith, the RLA’s policy director, said: “Security of tenure means nothing unless the homes to rent are there in the first place.

“With the demand for private rented housing showing no signs of slowing down, it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances.

“Whilst the system should clearly be fair to tenants, it needs also to support and encourage good landlords.

“Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive.

“This needs to be underpinned by a court system that is fit for purpose and properly resourced. At present it is neither.”