Originally published at: What Does the Renters’ Rights Bill Mean for Landlords?
The new Renters’ Rights Bill is Labour’s version of the Conservatives’ Renters (Reform) Bill, which was scrapped following Rishi Sunak’s surprise call for an election. This new bill aims to “fundamentally reform the private rental sector” and improve the quality of housing in it. It also seeks to “balance the playing field” between landlords and…
Does that include Awabs Law and the Decent Homes Standard?
Hi David,
These are proposed policies that have not yet come into effect – and may never do so.
Should these policies come into effect for the private rented sector, our tenancy agreements will be promptly updated to adhere to the new rules and regulations.
My point was really that those two things, (if they become law) are more a factor of ongoing management than tenancy creation. Telling Rent Now users that they neednt worry about any regulatory changes in the bill could be misleading.
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One important thing this Bill means for landlords is that they must learn to be sensible. For instance: On another blog, I came upon a case where the landlord, having upped his tenant’s rent by £700 a month, displayed his own mortgage-payment cost as justification. Eh? What makes this fool landlord imagine that his tenant must pay his mortgage costs, or be evicted?
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I agree in principle that rents are set by the market, not by the individual circumstances of landlords. However, its likely that this landlord was faced with a choice of evict and sell up asap or increase the rent to cover costs that he could not cover any other way. £700 is a massive monthly increase, so I can only assume that the tenant was previously benefitting from an unsustainably low rent.
As to whether the rent should “pay his mortgage”, the answer is that any business that operates from premises theyve bought must set their pricing to cover all their business costs including any borrowing. Whilst larger businesses, like Tesco can absorb sudden large increases by increasing their prices incrementally over time, smaller businesses cannot and if no-one is willing to buy at the price they set, they fold.
I’m sorry, but it does not seem to me that yours is an enlightening analogy: ‘a business’ is a kinetic entity, often with substantive variables. Landlording is almost static, needing to be concerned only with the cost of mortgages. His mortgage is the landlord’s burden. It is not an ethical expectation that it can be made the tenant’s burden. A law of the land is just when it sactions such ugly, exploitative landlord expetations. Such landlords are best kicked off the rental housing market.
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, so I can only assume that the tenant was previously benefitting from an unsustainably low rent.
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I can assume quite other things! 
“only the cost of the mortgage”??? No repairs then? no upgrading? No registration payments tp L/A? Agents costs? Elec and gas Certs? Epc ? Only Static . Cuckoo. Cuckoo. is the land you are in .
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I do wonder why you have listed the things you list. Nothing on that list is a variable, let alone an unpredictable one. Perhaps you would like to see those things become the burden of the tenant too? Or is it that you threw in some red herrings in the hope that they will make it seem as if you have something sensible to say?
I am a joiner I can send you a chip to balance up the chip you have on your other . shoulder. Often people with nothing are against those with something. But I am sure this does not apply to you… First time posting ignorance on this subject that has been discussed in other blogs… But I do love all your big words in your 2nd post
Its absolutely a business, with similar “substantive variables” to any other business. Its also far from passive with 160+ laws and regulations governing it and has a very wide range of costs other than mortgages, including maintenance, compliance licensing, advertising, insurance, legal costs etc. All the costs associated with a business in fact.
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The proposed Renters Rights bill includes a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict tenants in order to move in or sell the property.
With a normal tenancy, the landlord should receive the full rental amount until the tenant (individual or family) leaves, so can service the mortgage for this duration.
However, I have an HMO. Assume I have 4 long -term (over 12 month) tenants, and one leaves and a new tenant starts in January
Shortly afterwards, I find that I need to sell the property for whatever reason.
I’d need to wait until January the following year before giving notice to any of the tenants, as if any were to leave as a result of me serving them notice any earlier I couldn’t replace them without re-starting the 12 month protected period clock.
But if any of them were to serve me 2 months’ notice as they wanted to leave for their own reasons – a common occurrence with HMOs - then I’d have to continue paying the mortgage for the remainder of the year with a reduced rental income not covering it.
While the 12 month protected period would work for a standard tenancy, HMO landlords may find that during the most recent tenant’s 12 month protected period they have other tenants serving notice, and no way to make up the shortfall.
Have I misunderstood the Government’s proposed Renters Rights bill?
What about existing tenancy agreements?
What if you only want to rent for a set period of time, is that not possibly under the proposed new rules? Could you rent for say 6 or 12 months?
I do not believe you have misunderstood. That said, winding down a HMO is never going to be straightforward, as tenants are likely to always be at different stages of their tenancy, and just because you have given them notice to leave, does not mean they will, so the risk has always be present to be stuck with a shortfall of rental incomes when the property is not fully occupied.
Whilst the new rules will make the risk greater, the risk has always been there, and this is certainly something I considered when investing in my HMO.
All of these additional complications, just serve to persude me that the rental business is becoming more about ‘make hay whilst the sun shines’, and this does mean im liklely to need to be more aggressive in the short term to increase rents to bank profit whilst I can, as the risk of loss-making years on individual properties is always round the corner.
Nope. tenant could serve two months notice immediately on moving in, or they can live there forever, or until you decide to evict for eligible grounds.
If you do internet serach or ‘Renters rights bill gov’. likely the newly published guide will show. have a read, It wont allow me to to post the link.
I don’t see much about the problem of tenants refusing access for maintenance, which is one of the most common problems. They can even make accusations of harrasement because there has been “too much” maintenance, as if landlords do it for fun. Why has this not been addressed.
The market rate rent increase is going to leave everyone unhappy. Landlords are not really going to increase rents by more than the market amount as the tenants will go somewhere cheaper and they won’t be able to rent it for more than the market rent. The main problem for tenants is paying a market rent where rents are increasing a lot which they can’t afford. The German system of rents in line with inflation would help tenants, but leaves open the danger of Rachmanism to get rid of tenants if rents are a long way below market rents.
I think there is an issue with these measures being combined with the up to 40% tax on interest which doesn’t apply to any other business or commercial renters. I am not sure landlords can be squeezed from both sides. Would prefer not to have the tax on interest and genuine control of rent increases