Hi all
After listening to podcasts from industry pros and reading blog posts on the subject the general consensus is that landlords should not expect major changes to the bill but we might be able to influence some minor tweaks. For me there are two points that are seem really unfair.
When entering into a tenancy agreement a tenant can give 2 months notice on day one to end the tenancy at the end of month two. This seems particularly unfair to the landlord looking to recoup their reletting costs. If the tenant has a reason like something substandard with the property that was NOT evident at the viewing then fair enough. if it is just a change of heart by the tenant then the landlord should be compensated in some way.
The tenant is actively encouraged to challenge fair rent increases. When the FTT makes their decision you would expect that the rental amount would be backdated so that a tenant would not challenge a rent increase just to delay it. Surely this would be at odds with the basic principles of the law.
Yes I have heard that the PRS could be exploited by those wanting a short term Airbnb type let. I imagine this would be more likely to happen with those providing fully furnished accomodation. Just wondering if there is a way of defending against this happening. An AST has to be a tenants main home. Is there a way this could be ruled out through their Council Tax liability maybe…
I have 2 properties with great tenants. I set my rents slightly below the market average and everyone is happy. However, I will be talking/writing to my tenants now to forewarn and explain that as a consequence of the RRB I will likely to make an above inflation rent increase next year.
Reasons:
Requirement for LL to be listed on the national database which at this time will be an unknown additional cost.
Requirement for LL to join an ombudsman scheme which at this time will be an unknown additional cost.
Mortgage and insurance companies will not be able to differentiate between employed tenants and those on benefits so will raise interest rates and insurance premiums as they will potentially be taking on more risk which at this time is an unknown additional cost.
As a result of the 3 reasons listed above it will be inevitable that landlords will have to raise rents in order for their businesses to remain viable.
Christopher, will you be increasing it to market rent? We also always charge below, but it feels to me that it’s not slightly below, more than that. It just happened that we had to re-rent four of our properties during the winter, and the rents were the lowest in a year, plus plenty of properties to rent. Budget flats rented for $750, then in a month’s time they went to $850. Now some are $900 p/m
One more thing I’ll add to your list, on a macroeconomic scale. Interest rates are being cut aggressively this and the next year, which means quantative easying. And that means serious money devalation. Just something to keep in mind.
Of, and Labour Government in power as a general background. That’s when historically private landlords suffer the most ))
Thanks for your contribution. I have one property that the rental anniversary will be February 25. Current rent is £1175 and the market currently is £1250. I am thinking I will likely raise it to above market in anticipation of the RRB which could come in to effect as early as Spring. I will need to know the costs involved before Christmas to put a figure on the rise and give sufficient notice.
My other property has its rental anniversary end of August. I imagine the bill will be law by then and I will be looking to raise it level to the rest of the market if not more. The reason being that as the bill stands now tenants will be encouraged to even challenge a modest rent increase without any grounds to do so, just to delay the rent increase. The FTT will then set the rent which will then be payable at the next rental period instead of being backdated. This could be 6 months later. So rent increases could be every 18 months…
You could add a contingency for the cost of increased delays if you ever need to evict and for the draconian penalties and RROs if you make a simple mistake.
What makes you think the B of E will use Quantative Easing? There is a lot a flexibility at the moment to lower interest rates without having to introduce new money into the system.
I’m not talking about at the moment. US and China started aggressively cutting rates and will continue doing so in the next year. Next rate cut is in November and again it’s expected to be 0.5% instead of 0.25%.
Rate cuts are followed by money printing. They go ahnd in hand. As big economies are leading the way, everybody else will follow. BTW, UK economy and Uk currency is weaker than USD. You can compare the rate of inflation for the last 10 or so years to confirm that.
The watchtool attached has been predicting rate cuts with high accuracy.
I’d argue that isn’t correct. There is plenty of flexibility in the current base rate to avoid QE. QE has been historically used when base rate is too low & hence, to avoid it going negative, QE is used as an alternative monetary policy to boost the supply of money, and hence boost demand.
It is not a waste of time to suggest amendments to a bill at the committee stage when the detailed wording is discussed. During the (abortive) passage of the Renters Reform Bill I made representations via my MP, which actually elicited a letter from Michael Gove, and my name appears as a footnote to the committee report - I believe I may have been instrumental in getting the landlord’s intention to sell made a mandatory ground for possession and this has carried forward to the new bill.
Don’t rely on anyone else to do this. Individual representations do count.
From the Parliament website:-
Do you have relevant expertise and experience or a special interest in the Renters’ Rights Bill, which is currently passing through Parliament? If so, you can submit your views in writing to the House of Commons Public Bill Committee which is going to consider this Bill. https://www.parliament.uk/business/news/2024/october/renters-rights-bill-call-for-evidence/
