If you wish to let a property to a single tenant but avoid all the new rules, you could rent it to a company, not an individual. The Renters Rights Act doesn't apply to corporate tenants. You could also let it to a local authority or housing association and avoid the act.
The rules were tightened up in Wales back at the end of 2022, it's actually not quite as bad as the "Renters Rights Bill" but it's not too dissimilar. The upshot is that landlords are now extremely risk averse. The minimum term is 12 months, so guess what they're asking for 12 months in advance otherwise it's a hard no. They're also asking for UK based guarantors who own their homes to be added to the contract, doing enhanced reference checks, credit checks etc. In practise what this means is that there are large numbers of people who are now excluded from the market, rents have also shot up. So for Labour to be saying we want less discrimination, what they've actually done is introduce more. Landlord's can't face ruinous costs and risk, be taxed to high heaven and then say sure I'll take on the single mum with 4 kids and an ASBO, who I'll never be able to evict. It doesn't work like that.
I can only see this backfiring overall. Whilst the majority of the bill is made with good intention, there's been no thought as to how it work in practise. It will further constrain supply as smaller landlords get squeezed out given the risk of increased bureaucracy and overhead costs. How the courts (which are already backdated by at least 11 months for S21 claims) will manage is anyone's guess.
I have got very strict, I check tenants out and if there’s no previous landlord ref ,the application goes in the bin, the usual excuse is ,I’ve been living with my parents,,It goes in the bin, ,I know most of the local landlords and we help each other with new tenants,and I had somebody apply moving from Bristol,it went in the bin, I only rent to locals so all these new rules will just make it harder for tenants I had 30 people apply for my last 3 bedroom house so it’s easy to pick out the best new tenant, it’s not all about the money ,I’ve had people offer me 3 months advance cash, ,they seem surprised when I tell them no thanks, pick the right person , and then there’s no agrow,
Very interesting, i operate in a similar manner. Very strict and cautious about who my successful tenant is. I think the need to be strict and hold out for the right tenant will only get stronger!
1. If a Tenant moves in, and then wants to move out again in a short period. It would likely suggest the property is of a poor standard or they are unhappy with the landlord 2. If a Tenant is not paying. You are cutting corners by not doing checks. Plus you have insurance to cover this inc legal costs. 3. Decent homes standard - brilliant. We should as landlords be taking this seriously. The Landlords that cannot afford keeping a buy to let and maintaining it should sell the property.
Good insights. Here are my thoughts: 1. Or they could change their mind about where they want to live or the amount of money they want to pay for rent. 2. Trying to get that money out of insurance companies could prove challenging. In most instances you should get a good tenant if do the right checks - but there will be unlucky times too. 3. Agree with this one.
A sensible and well balanced assessment. In my view making the rules so lobsided towards tenants will ultimately result in many that would be considered a decent proposition under current rules, will suddenly find themselves classed as too risky. Small time landlords are much more likely to have the time and resources to properly manage every bit of the rental process as only a few properties. Rather than the corporate sector where they are juggling a large number of units and may face staffing, admin issues and budget constraints which commonly affect reaction times.
Thanks, and really interesting point of view! The advantage of smaller landlords is the time and energy to be able to combat changes like this, where as the advantage of larger corporate companies / landlords, is having the funds to combat these negative changes. Ultimately we all lose unfortunately
@@JustinWilkins Yes agree completely with all losing. Of the corporate Landlords I know they often resort to claiming on insurance for anything sizable which in turn delays response time significantly, so guess we'll all have to adapt to these proposals. Cheers
Hi Justin, I totally agree. I am a responsible Landlady, I gradually worked my EPC grade-C up from an F. I invested in solar panels and got help from my LA. "Awabs Law" is so important, abt time. I was an accidental Landlady back in 2010 and have always made a profit.
I used to pay rent of £477. The landlord served a rent increase to £708.85. I only took the property as covid prevented me from staying in his HMO. There was a bucket for a toilet. And i learned after 18 months that there was no EICR or EPC, but yhere was a gas certificate. I challenged at the tribunal and they reduced the rent yo £370. The tribunal is free ... There was no cost to either of us... However it took 4 months for them to decide and i continued paying £477 as required by law. The landlord would not reimburse the difference.
Thanks for sharing. Interesting to hear the tribunal is free - I wonder if that will change if they have an increase in cases. But for the time being thats good to hear it comes at no cost to the tenant or landlord. I think its fair to say the landlord in the example above should be penalised, having no EICR or EPC is not acceptable and they are very fair requests for basic health and safety. Should landlords be able to serve rent increases - yes. Should they have to do this inline with market rate, and have to keep the property up to a fit and healthy standard - also yes.
Haha, well the pragmatist in me feels that there should be some sort of "dwelling consensus" whereby tribunals can assess the habitability and true market value of every dwelling in the UK. And I think after that we should dispose of the terms "landlord/tenant"...because it can implicitly create a relationship that will descend into conflict...and by conflict I mean money not being exchanged as it should (i.e. not paying rent for 3 months is conflict, withholding tenancy deposit, even via the DPS is conflict). And instead everyone will be called Custodians of Dwellings...to ensure that compliance and spending occurs to ensure all dwellings are legally habitable. Anyway...if you think landlords are being disemboweled, then you should try living as a separated parent (a father) where the mother has social housing. It's truly brutal.
great info - can you escape most of whats in store by having a rolling contratc - and must you do anything to keep a rolling contact ie notify the tennant?
So the landlord has to give a rolling contract, but the tenant gets a minimum of 12 months. After the first 12 months it’s not clear whether a new 12 months is started or if it then goes onto a rolling contract.
You mentioned the exiting of existing landlords would be good for new investors? Out of interest why? Why do you think anyone new would want to invest? It seems to me with interest rates where they are there is not much profit anymore, and most savings accounts can beat the return, before we start to cinsider the s&p 500. I have a single btl and im planning on getting out because the interest cost and the additional risks are not worth the profit, which is close to nill if you own a third of a property, as is standard. Im just keen to ensure im not missing a trick.
Good for new investors because there will be more housing / investments available for new investors to purchase. Being a landlord with 1 or 2 properties barely makes sense anymore which is a shame - the government have squeezed it too much. Being a landlord with 10+ properties still makes a lot of sense because there is strength in numbers, but not everyone has the means or the hunger to purchase that many properties.
@@JustinWilkins Thank you for your reply. Sorry if this reads like I am trying to make a gotch point, I promise I am trying to understand the situation better to make informed decisions. I am still confused, whilst I appreciate interest can be offset via a ltd company arrangement, the facts remain at 7% interest rates, (per year) an investment property needs to yield £7000 per £100k invested in rent to make a profit on the cost of the mortgage. Perhaps in some areas this is just about possible, but we can expect a paltry £1-2k per year once letting agents and upkeep are paid for. £2k profit on an £100k investment does not seem to be competitive in my understanding. With appreciation of your point of the strength in numbers, I am confused why having several risky investments that yield less than a savings account is in any way superior to having one or two?
The day the government will sensibly pass(benefit tenants)the tenants rent directly to the landlord things would pan out a lot better! Because of absurd systems like this they’ll definitely remain an element of discrimination going forward.
They just need to make improvements for both the tenant AND the landlord. They need realise that landlords earning more money would benefit the industry, because there would be more money to reinvest into properties and provide better quality homes. Granted some landlords would be greedy, so maintaining regulations and high standards should be in place.
Justin - I have a question if you could answer I currently have 1 residential property which I live in. It is worth 275k and I owe 208k I want to buy a second residential property for 368k and change my current property into a buy to let which can achieve £1300 a month What is the best way to go about this? I was thinking of switching my current property to a buy to let. Leaving the equity that I have in it and basically getting my new residential mortgage on a 90% LTV (10% deposit) approx £37k Is there a better way to do this?
You think 12 months offers renters security, demonstrates how detached you are from the other side of the marketer. The long term outcome of these rules are a deterrent average Jo trying to be a landlord on a shoe string. Ultimately houses are for living in they’re not investment. Lots of house will be come available for first time buyers. This is a good thing.
Properties won't go to first time buyers - look up Lloyds Bank and John Lewis who are investing profits into property. Lloyds Bank have a target of buying 50,000 properties for buy-to-let over the next 10 years (2 years in they are currently on track). Do you think Lloyds Bank will make a good landlord? Every property and tenant will be 1 of 50,000.
There are lots of houses available for first time buyers at the moment. Those people who can qualify will be buying them, but generally those that rent are the ones who don't have the deposit, don't have the credit rating, or income, or perhaps who don't want to settle in 1 particular area. The new rules state that tenants have a 12 month minimum term and then the only reasons they can be evicted would be for the landlord or a family member to move in, or for the landlord to sell the house. In other words they can't be evicted so the landlord can put another tenant in. So in practise this could be a very long time and up to the tenant's discretion. You say you don't want amateur landlords in the market, well guess what they're generally the ones who aren't looking for a massive profit, and most probably go via a letting agent who has the professionalism and have the repairman contacts. If you prefer to go via a big corporate then good luck to you. No doubt they'll have a blacklist and if you ever find your name added onto it then you won't be able to rent ANY of their properties. Guess what, I'm sure it will get better - the big corporates will probably share their lists to all the others. Soon you'll be camping out in the Council offices reminiscing about the good ol days where you had some humanity in the system. Careful what you wish for.
Usually accidental landlords have it worse - own properties in own name, so face higher taxes, plus they usually only have 1 or 2 properties. A portfolio of 1 or 2 properties is hard to make profitable as it’s very exposed to new changes and costs.
Destroying landlords its the wrong approach, not all people in this country are willing to sacrifice time be disciplined to build the money to buy a house, so landlords serve them people who want to live now. It’s impossible to get a decent enough pension if your on a salary or self employed worker I thought a brilliant way was work hard get property. Guess we need to level up 🤝
Completely agree! It seems the only way to beat it is to become bigger stronger richer. A lot of these changes affect part time or accidental landlords harder!
If you wish to let a property to a single tenant but avoid all the new rules, you could rent it to a company, not an individual. The Renters Rights Act doesn't apply to corporate tenants. You could also let it to a local authority or housing association and avoid the act.
May be in breach of the mortgage terms
Agreed! The only thing to check is mortgage terms. And whether they will change the rights to include corporate lets is yet to be seen 🤷🏻♂️
Good to know Jason.
I'm OK I have no mortgage ❤ love the suggestion! You can also charge vat then as well if needed.
@@1ForTheShieldz Residential rental income is always VAT exempt so you can't charge VAT on it.
The rules were tightened up in Wales back at the end of 2022, it's actually not quite as bad as the "Renters Rights Bill" but it's not too dissimilar. The upshot is that landlords are now extremely risk averse. The minimum term is 12 months, so guess what they're asking for 12 months in advance otherwise it's a hard no. They're also asking for UK based guarantors who own their homes to be added to the contract, doing enhanced reference checks, credit checks etc.
In practise what this means is that there are large numbers of people who are now excluded from the market, rents have also shot up. So for Labour to be saying we want less discrimination, what they've actually done is introduce more. Landlord's can't face ruinous costs and risk, be taxed to high heaven and then say sure I'll take on the single mum with 4 kids and an ASBO, who I'll never be able to evict. It doesn't work like that.
Agreed! There needs to be some common sense applied to this bill urgently!
Some tenants don't open windows and don't put the heating on. This causes mould. To make this the landlords fault is wrong.
Agreed! One of my biggest hates
Yes. Agreed.
And dry washing in the house at winter. Or in a flat.
Same here!
I can only see this backfiring overall. Whilst the majority of the bill is made with good intention, there's been no thought as to how it work in practise. It will further constrain supply as smaller landlords get squeezed out given the risk of increased bureaucracy and overhead costs.
How the courts (which are already backdated by at least 11 months for S21 claims) will manage is anyone's guess.
I have got very strict, I check tenants out and if there’s no previous landlord ref ,the application goes in the bin, the usual excuse is ,I’ve been living with my parents,,It goes in the bin, ,I know most of the local landlords and we help each other with new tenants,and I had somebody apply moving from Bristol,it went in the bin, I only rent to locals so all these new rules will just make it harder for tenants I had 30 people apply for my last 3 bedroom house so it’s easy to pick out the best new tenant, it’s not all about the money ,I’ve had people offer me 3 months advance cash, ,they seem surprised when I tell them no thanks, pick the right person , and then there’s no agrow,
Very interesting, i operate in a similar manner. Very strict and cautious about who my successful tenant is. I think the need to be strict and hold out for the right tenant will only get stronger!
1. If a Tenant moves in, and then wants to move out again in a short period. It would likely suggest the property is of a poor standard or they are unhappy with the landlord
2. If a Tenant is not paying. You are cutting corners by not doing checks. Plus you have insurance to cover this inc legal costs.
3. Decent homes standard - brilliant. We should as landlords be taking this seriously. The Landlords that cannot afford keeping a buy to let and maintaining it should sell the property.
Good insights. Here are my thoughts:
1. Or they could change their mind about where they want to live or the amount of money they want to pay for rent.
2. Trying to get that money out of insurance companies could prove challenging. In most instances you should get a good tenant if do the right checks - but there will be unlucky times too.
3. Agree with this one.
I only rent my properties in london with a combine income of £100k+ to avoid issues with lower income earners.
Smart decision! I can imagine that removes a lot of the risk
A sensible and well balanced assessment. In my view making the rules so lobsided towards
tenants will ultimately result in many that would be considered a decent proposition under current rules, will suddenly find themselves classed as too risky. Small time landlords are much more likely to have the time and resources to properly manage every bit of the rental process as only a few properties. Rather than the corporate sector where they are juggling a large number of units and may face staffing, admin issues and budget constraints which commonly affect reaction times.
Thanks, and really interesting point of view! The advantage of smaller landlords is the time and energy to be able to combat changes like this, where as the advantage of larger corporate companies / landlords, is having the funds to combat these negative changes. Ultimately we all lose unfortunately
@@JustinWilkins Yes agree completely with all losing. Of the corporate Landlords I know they often resort to claiming on insurance for anything sizable which in turn delays response time significantly, so guess we'll all have to adapt to these proposals. Cheers
Hi Justin, I totally agree. I am a responsible Landlady, I gradually worked my EPC grade-C up from an F. I invested in solar panels and got help from my LA. "Awabs Law" is so important, abt time. I was an accidental Landlady back in 2010 and have always made a profit.
That’s great to hear! Media paints us all as greedy and not caring - which really isn’t the case!
I used to pay rent of £477. The landlord served a rent increase to £708.85.
I only took the property as covid prevented me from staying in his HMO.
There was a bucket for a toilet. And i learned after 18 months that there was no EICR or EPC, but yhere was a gas certificate.
I challenged at the tribunal and they reduced the rent yo £370.
The tribunal is free ... There was no cost to either of us...
However it took 4 months for them to decide and i continued paying £477 as required by law. The landlord would not reimburse the difference.
Thanks for sharing. Interesting to hear the tribunal is free - I wonder if that will change if they have an increase in cases. But for the time being thats good to hear it comes at no cost to the tenant or landlord.
I think its fair to say the landlord in the example above should be penalised, having no EICR or EPC is not acceptable and they are very fair requests for basic health and safety. Should landlords be able to serve rent increases - yes. Should they have to do this inline with market rate, and have to keep the property up to a fit and healthy standard - also yes.
Haha, well the pragmatist in me feels that there should be some sort of "dwelling consensus" whereby tribunals can assess the habitability and true market value of every dwelling in the UK.
And I think after that we should dispose of the terms "landlord/tenant"...because it can implicitly create a relationship that will descend into conflict...and by conflict I mean money not being exchanged as it should (i.e. not paying rent for 3 months is conflict, withholding tenancy deposit, even via the DPS is conflict). And instead everyone will be called Custodians of Dwellings...to ensure that compliance and spending occurs to ensure all dwellings are legally habitable.
Anyway...if you think landlords are being disemboweled, then you should try living as a separated parent (a father) where the mother has social housing. It's truly brutal.
Disempowered🤦 not disemboweled...
great info - can you escape most of whats in store by having a rolling contratc - and must you do anything to keep a rolling contact ie notify the tennant?
So the landlord has to give a rolling contract, but the tenant gets a minimum of 12 months. After the first 12 months it’s not clear whether a new 12 months is started or if it then goes onto a rolling contract.
You mentioned the exiting of existing landlords would be good for new investors?
Out of interest why? Why do you think anyone new would want to invest? It seems to me with interest rates where they are there is not much profit anymore, and most savings accounts can beat the return, before we start to cinsider the s&p 500.
I have a single btl and im planning on getting out because the interest cost and the additional risks are not worth the profit, which is close to nill if you own a third of a property, as is standard.
Im just keen to ensure im not missing a trick.
Good for new investors because there will be more housing / investments available for new investors to purchase.
Being a landlord with 1 or 2 properties barely makes sense anymore which is a shame - the government have squeezed it too much. Being a landlord with 10+ properties still makes a lot of sense because there is strength in numbers, but not everyone has the means or the hunger to purchase that many properties.
@@JustinWilkins Thank you for your reply.
Sorry if this reads like I am trying to make a gotch point, I promise I am trying to understand the situation better to make informed decisions.
I am still confused, whilst I appreciate interest can be offset via a ltd company arrangement, the facts remain at 7% interest rates, (per year) an investment property needs to yield £7000 per £100k invested in rent to make a profit on the cost of the mortgage.
Perhaps in some areas this is just about possible, but we can expect a paltry £1-2k per year once letting agents and upkeep are paid for. £2k profit on an £100k investment does not seem to be competitive in my understanding.
With appreciation of your point of the strength in numbers, I am confused why having several risky investments that yield less than a savings account is in any way superior to having one or two?
perhaps for first-time buyers
The day the government will sensibly pass(benefit tenants)the tenants rent directly to the landlord things would pan out a lot better!
Because of absurd systems like this they’ll definitely remain an element of discrimination going forward.
They just need to make improvements for both the tenant AND the landlord. They need realise that landlords earning more money would benefit the industry, because there would be more money to reinvest into properties and provide better quality homes. Granted some landlords would be greedy, so maintaining regulations and high standards should be in place.
2:34 or they are in breach of any of the the section 8 grounds.
Why should landlords not be able to discriminate?
Landlords should be allowed choice when it comes to choosing a tenant, but not to discriminate against a certain profile of person.
Justin - I have a question if you could answer
I currently have 1 residential property which I live in. It is worth 275k and I owe 208k
I want to buy a second residential property for 368k and change my current property into a buy to let which can achieve £1300 a month
What is the best way to go about this?
I was thinking of switching my current property to a buy to let. Leaving the equity that I have in it and basically getting my new residential mortgage on a 90% LTV (10% deposit) approx £37k
Is there a better way to do this?
You make the same money buying gold with only 10% of the investment compared to property in the uk.
Without any hassle or stress.
Gold 😂
You think 12 months offers renters security, demonstrates how detached you are from the other side of the marketer.
The long term outcome of these rules are a deterrent average Jo trying to be a landlord on a shoe string. Ultimately houses are for living in they’re not investment. Lots of house will be come available for first time buyers. This is a good thing.
Properties won't go to first time buyers - look up Lloyds Bank and John Lewis who are investing profits into property. Lloyds Bank have a target of buying 50,000 properties for buy-to-let over the next 10 years (2 years in they are currently on track). Do you think Lloyds Bank will make a good landlord? Every property and tenant will be 1 of 50,000.
There are lots of houses available for first time buyers at the moment. Those people who can qualify will be buying them, but generally those that rent are the ones who don't have the deposit, don't have the credit rating, or income, or perhaps who don't want to settle in 1 particular area. The new rules state that tenants have a 12 month minimum term and then the only reasons they can be evicted would be for the landlord or a family member to move in, or for the landlord to sell the house. In other words they can't be evicted so the landlord can put another tenant in. So in practise this could be a very long time and up to the tenant's discretion.
You say you don't want amateur landlords in the market, well guess what they're generally the ones who aren't looking for a massive profit, and most probably go via a letting agent who has the professionalism and have the repairman contacts. If you prefer to go via a big corporate then good luck to you. No doubt they'll have a blacklist and if you ever find your name added onto it then you won't be able to rent ANY of their properties. Guess what, I'm sure it will get better - the big corporates will probably share their lists to all the others. Soon you'll be camping out in the Council offices reminiscing about the good ol days where you had some humanity in the system. Careful what you wish for.
Reflect on the pros? What pros?
Basically the only ones I could think of - it’s a pro that there isn’t rent control
Why is this even worse for accidental landlords?
Usually accidental landlords have it worse - own properties in own name, so face higher taxes, plus they usually only have 1 or 2 properties. A portfolio of 1 or 2 properties is hard to make profitable as it’s very exposed to new changes and costs.
Hard enough being a landlord without stupid small legal issues which are irrelevant.
I do agree with this!
Letting agents will loose lots of momeybfrom renewing contracts too.
Yes very good point
It's all over for small fry landlords sell up now before the house prices crash
😂😂
Destroying landlords its the wrong approach, not all people in this country are willing to sacrifice time be disciplined to build the money to buy a house, so landlords serve them people who want to live now. It’s impossible to get a decent enough pension if your on a salary or self employed worker I thought a brilliant way was work hard get property. Guess we need to level up 🤝
Completely agree! It seems the only way to beat it is to become bigger stronger richer. A lot of these changes affect part time or accidental landlords harder!
There will be less rentals and thus higher rents
It all just seems very backwards, and will only make conditions / rents worse for tenants in my opinion
Come on fellow landlords let’s get on with it and stop winging
Good mindset. Just got to crack on and deal with it!
Wrong 😑 approach LieBour …..long term they’ll drive more landlords out and rents right up ⬆️
Completely backwards approach by the government!
Gold investment is 4 times better than investment than property
This is comedy gold
First
Let’s go 💪