Be a guest of Mark Smith (Barrister-At-Law) – Swindon

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies at the pin Swindon Meeting property networking event Wednesday 24th April 2019.

The event will start at 6:00pm until 9:00pm and will be free for guests of Mark Smith that have not previously attended a pin meeting.

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Section 21 to be banned in the UK

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The Government has announced its intention to scrap
Section 21 notices for eviction in an effort to offer tenants more long-term
security.

At the moment, Section 21 notices enable landlords to
evict tenants without a reason at the end of their fixed-term tenancy. However,
under the government’s new plans, landlords would be required to provide
‘concrete, evidenced reason already specified in law’ in order to bring
tenancies to an end. In order to support this, the government also announced
plans to make reforms for Section 8, with a consultation launching shortly.

I can’t say I’m surprised by this move, as the
government has come under increasing pressure to make this move for some
time.  However, I will be surprised, and
somewhat concerned, if they do completely abolish Section 21 rather than
diluting it, which I had presumed they would do.

Either way, this is going to be game-changing for the
PRS. By removing the ability to evict with Section, I predict:-

• Any prospective landlords will think twice about embarking on
  the world of buy-to-let, therefore limiting future supply growth, certainly in
  the short-term
• Some existing landlords, particularly those accidental landlords
  who may have previously been victim to difficult tenants, will exit the market,
  thus compounding the housing shortage crisis
• We may see a surge in landlords serving section 21’s in the near
  future if they are not confident about their current tenants.

As I have said for many years,
the vast majority of landlords only evict tenants as a last resort. No landlord
wants to go through the hassle or expense of having to evict a tenant, but
sometimes needs must, which is why the term ‘no-fault’ is moot and infuriates
me.

By the government’s own admission, 90% of tenancies
are ended by the tenant. Of those the tenancies ended by the
landlord, we know that the majority are ended because of rent arrears, as
in 56% of cases surveyed by Landlord Action.

The reason many landlords use
Section 21 to gain possession rather than Section 8, is because it is typically
quicker.  Landlords have little faith in
the current court system and few anticipate being able to pursue rent arrears
without a lengthy process, so most take the decision to forfeit recovering lost
rent and just to get their property back as soon as possible so they can
re-let.  Section 8 also comes with the
added risk that tenants can counter-claim, therefore delaying the process
further.

The government has said Court
processes will be expedited so landlords are able to swiftly and smoothly
regain their property in the rare event of tenants falling into rent arrears.
However, in truth, no-one really knows how ‘rare’ rent arrears cases are
because most landlords are writing them off via use of Section 21.

In my view, if Section 8 is going
to have to be relied on more heavily, it must be “fit for purpose� and any changes
and their application need to be carefully considered.  Clearly, if a landlord is going to need strong
grounds for possession, there are going to be a lot more court hearings. So, my
question is ‘are there going to be a lot more judges to handle this increased
workload?’.  On a positive note, it will
give much greater accuracy as to why tenants are evicted and may help pave the
way for future reforms to support both landlords and tenants.

I do fully understand the argument that unscrupulous landlords
should not be able to kick good tenants out without reason and that families to
have greater security and be able to put down roots.  However, I also feel strongly that the proposal
needs careful considered before removing the use of Section 21 altogether.

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How Labour would fix the “housing crisis�

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Housing Policy:

Labour’s housing minister, South Yorkshire MP John Healey
says “We can fix this�, and as housing minister for the last year under Gordon
Browns’ government, he says he’s keen to pick up where he left off.

In an interview with James Millar for PolitcisHome, THEHouse magazine for Parliament, Mr Healey says he’d
start his next tenure with a new definition of affordable housing.

A rare ‘animal’ in Jeremy Corbyn’s shadow cabinet, Mr Healey’s
been in government and actually held some responsibility, and his ambition is
to become the next secretary of state for housing under a Labour government.

He claims that as prime minister, Jeremy Corby would be very well placed to take action on voter concerns about housing issues, because it’s close to his heart and he’s been “banging on about it for longer than most.�

Of his leader in charge, Mr Healey says:

“If you look at Jeremy Corbyn’s speeches from the very
moment he was elected to the House of Commons, housing has for nearly 40 years been
his top domestic priority.

“He’s made this commitment that he would create as prime
minister a fully-fledged housing department. That’s why I’m not shadow housing
minister; I’m shadow secretary of state for housing.

“Another good indication is our plan for ending rough
sleeping that we’ve said we’d do in five years – the course of a parliament. At
the moment there is a rough sleeping working group within government which is
chaired by the most junior minister in the MHCLG. The task force we’d set up
would be led by the PM, Jeremy Corbyn.�

“The rise in homelessness is the most visible manifestation
of the housing crisis,� says Mr Healey, claiming that the Blair governments all
but wiped out the problem 20 years ago. Mr Healey claims he now knows the
answers, given his past experience and his full support from the top:

“The root causes lie in a failure to build enough low-cost
homes, a failure to step in to give better rights for private renters – the
biggest single cause of homelessness now is the end of, or eviction from, a private
tenancy…â€�

He doesn’t explain how he would square this with private
landlords who are stuck with non-paying tenants, running up massive rent arrears?

The Labour party, says Mr Healey, has a range of bold and
radical policies to be introduced in Westminster. There’s the pledge to build a
million more low-cost homes, and a “new definition of what affordable will be�.

“Affordable�, he explains, under Labour, will be linked to
income not the market. Mortgage costs, he proposes, will be linked to around one-third
of average local incomes, varying from location to location, with the “discount�
locked in for future buyers. This discount “is there for future first-time
buyers not just first first-time buyers.�

The party also intends to “cap private rents in line with
average local incomesâ€�,  and it is
proposing indefinite leases that would appear to “tilt the balance in the
private rental market away from landlords and in favour of those in need of a
home.�

“For private renters it’s hard to think of any market that is failing so systematically where you’ve got so many people paying such a big part of their income for what is often unsatisfactory and substandard accommodation. There’s no reason why in England we can’t have a rental market that works well for landlords and works well for renters as well,� says Mr Healey.

He thinks it’s those renters that fuelled Labour’s 2017 election result, giving the opposition a healthy lead in the polls on the issue, and sees housing as a major battleground topic if there’s an election in 2019.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How Labour would fix the “housing crisisâ€� | LandlordZONE.

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