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Mar
3

Landlord Law is Changing: What You Must Do Before 1st May 2026

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Property118

Landlord Law is Changing: What You Must Do Before 1st May 2026

Over the past few months, I have been speaking to landlords across the UK about the Renters Rights Act, which comes into force on 1st May 2026.

Most know it is happening. Many assume it is simply another regulatory adjustment to add to the long list of changes landlords have already navigated.

It is not.

This legislation reshapes the balance between landlord and tenant in a way that directly affects how you manage property, protect income and handle risk. It is less about headlines and more about how the detail plays out when something goes wrong.

In my work, I deal with those moments. Failed possession claims. Invalid notices. Escalating disputes. Rent Repayment Orders that could have been avoided.

Under the new Act, certain breaches may result in a Rent Repayment Order of up to 24 months’ rent. On a property generating £1,200 per month, that is £28,800.

In many cases, the issue will not stem from deliberate noncompliance. It will come from misunderstanding a procedural change. Relying on an outdated assumption. Believing an old rule still applies.

That is where the real financial risk sits.

From 1st May 2026, this legislation becomes enforceable. At that point, it is no longer about what you think applies. It is about whether your processes, documentation and portfolio structure align with the new legal position.

Why I Am Running This Webinar

This is precisely why I am hosting a live session titled:

Landlord Law Is Changing: What You Must Do Before 1st May 2026

This will not be theory or commentary on media headlines. It will be a practical breakdown of what is changing, where landlords are genuinely exposed, and what you should be reviewing now within your own portfolio.

We will look at:

  • How the changes affect possession and enforcement
  • Where Rent Repayment Order risk sits
  • What assumptions may no longer be safe
  • The practical steps to take before 1st May 2026

If you are serious about protecting your rental income and staying ahead of enforcement, this is time well spent.

You can register by clicking HERE

Once enforcement begins, correcting a mistake is always more expensive than preventing one.

The post Landlord Law is Changing: What You Must Do Before 1st May 2026 appeared first on Property118.

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Mar
3

Court digitalisation will improve access to justice claims government

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Property118

Court digitalisation will improve access to justice claims government

The government claim they will spend more than £50 million to digitise the county courts to handle the court backlog.

Deputy Prime Minister and Justice Secretary David Lammy spoke following a report by Sir Brian Leveson, who warned the justice system is in crisis.

The news comes as Landlord Action figures reveal that landlords are facing the longest court waiting times in 20 years.

Improve access to justice

Mr Lammy claimed the government is committed to structural reform of the court system and will help drive investment in the court system by investing more than £50 million to progress digitalisation of the court system

He said: “This investment is not just about big business. The investment is designed to improve access to justice by cutting complexity and cost, and making it easier to resolve common everyday civil problems, such as when a business is failing to pay a supplier for goods provided or a dispute between a landlord and tenant over the condition of a property.

“Over a million claims have now been issued on our existing digital services for making money claims and damages claims. Cases consistently progress three times quicker through their early stages using these modern, user-focused services.

“The government is working with the Online Procedure Rule Committee, to develop rules for online proceedings that are simple to use, accessible and fair, fit for the digital age.”

Government has not provided clarity

The government have previously claimed a digitised court system will help landlords. However, as previously reported by Property118, the National Residential Landlords (NRLA) has warned the government has not provided clarity on how the courts will be prepared for the digital possession process.

Ben Beadle, chief executive of the NRLA, said: “At Report Stage of the Renters’ Rights Act, the Housing Minister told the Commons that: “Court readiness is essential to the successful operation of the new system”. We agree with the Minister.

“However, the government has yet to define what it means by the courts being “ready”. Without that clarity, it is unclear what the planned digitisation of possession cases is intended to deliver or how success will be measured.

“More broadly, whilst the Master of the Rolls has indicated that the “first iteration” of the new digital platform to process possession cases is expected to be released in late Spring 2026, it remains unclear what this will look and feel like in practice for tenants and landlords, or the extent to which it will speed up the processing of legitimate possession claims.”

Figures by the Ministry of Justice reveal it took courts an average of more than eight months to process and enforce landlord claims last year.

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Mar
3

UK rents dip in February – led by London falls

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Property118

UK rents dip in February – led by London falls

Landlords are seeing rents level off as tenants take longer to commit and affordability pressures shape new deals, HomeLet says.

Its latest rental index shows average UK rents fell to £1,301 in February, a 0.1% month-on-month fall from £1,302 in January.

That leaves rents 2% higher than a year earlier, when the average stood at £1,275.

While the change is marginal, it interrupts a run of monthly rent rises.

Properties take longer to rent

The firm’s head of partnerships, Carrie Alliston, said: “We’re currently seeing a rental market that’s slowing in a different way; not through falling rents, but through properties taking longer to let.

“The average proportion of income spent on rent (30.9%) has only gone up by 0.1% since November last year, which shows that tenants are being more cautious about what they can afford and how sustainable higher rents really are.”

She added: “As we move closer to the Renters’ Rights Act, this shift in behaviour underlines the importance of prioritising suitability and stability over simply pushing for the highest possible rent.”

London rents continue falling

Outside London, HomeLet says rents increased by £2 over the past month to £1,120.

That’s a 0.02% rise since January and places rents 1.8% above their level in February last year.

In the capital, however, rents fell for a fourth consecutive month to £2,067.

That is 0.5% lower than January and 2% higher than 12 months ago.

Six regions recorded a decline compared with January, while six posted an increase, highlighting varied local conditions rather than a single national trend.

Northern Ireland’s rents are up 0.4% month-on-month and 5.1% annually; Scotland’s rents grew by 0.6% and 4.6% respectively while rents in Wales fell -1.1% compared to January and 3.1% annually.

The post UK rents dip in February – led by London falls appeared first on Property118.

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Mar
2

Property118 founder slams Shelter for causing landlord exodus

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Property118

Property118 founder slams Shelter for causing landlord exodus

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Property118 is publishing this analysis because the private rented sector is shrinking in plain sight, and the people who pay the price first are tenants.

Property118 has long argued that landlord confidence is not an abstract concept; it is the fuel that keeps rental supply flowing. Remove confidence and participation falls. When participation falls, supply tightens, rents rise, and choice disappears.

Against that backdrop, Property118’s founder has criticised Shelter for campaigning in a way that, in Property118’s view, has helped create the political conditions for a landlord exodus.

“Shelter has been highly effective at influencing policymakers,” he said. “The unintended consequence is that many landlords no longer see the sector as commercially sustainable. When landlords exit, the supply of rental housing falls. That inevitably drives rents higher and makes life harder for tenants.”

There is a second reason Property118 is setting this out in detail. Property118 articles appear in millions of Google search results each month. That reach exists because landlords, tenants, journalists, lenders and policymakers are all searching for clarity on what is happening to housing supply.

This is not about defending bad practice. Property118 has consistently supported professional standards and enforcement against rogues. This is about a widening gap between political messaging and commercial reality, and the damage that gap causes.

What the landlord exodus looks like in practice

“Landlord exodus” can sound like a slogan until you see how it plays out on the ground.

It is the portfolio landlord who sells one house each time a tenancy ends, not because they want to leave, but because keeping the property no longer meets their risk and return requirements.

It is the long-standing landlord who decides not to re-mortgage, because the next product comes with higher rates, stricter affordability, and a compliance burden that feels unending.

It is the landlord who would have bought again five years ago, but now chooses to de-lever, simplify, or step away entirely.

Property118 has covered this trend repeatedly. Recent examples include commentary on landlords exiting under regulatory pressure and still achieving strong sale prices, which often accelerates decision-making because the exit route appears commercially attractive. See: landlords exiting in under 28 days.

Property118 has also reported on broader indicators of declining confidence, including the interaction between rising costs, legislation and the practical strain of running rental homes to an ever-tightening standard. See: landlord confidence plummets amid soaring costs and new legislation.

The important point is this; most landlords do not exit dramatically, they exit incrementally. That matters because the sector can shrink for years before the political system admits what is happening. By the time the consequences become undeniable, rents have already reset higher and the loss of supply becomes hard to reverse.

Property118 is not alone in reporting the trend. The debate has reached Parliament, with peers raising explicit concerns about landlords “voting with their feet” during discussions linked to the Renters’ Rights Act. See: fears of landlord exodus raised in Lords debate.

Why John Lewis matters, and why it changed the argument overnight

For years, the default response to concerns about landlord exits has been to suggest that institutional capital will simply replace individual landlords. The theory is that build-to-rent will scale up and fill the gap.

Then came John Lewis.

The John Lewis Partnership announced a high-profile entry into build-to-rent, with ambitious plans that were widely interpreted as a sign of confidence in long-term rental housing. It carried the authority of a trusted national brand and the financial weight of an institution that plans in decades.

Property118 has now reported that John Lewis is exiting those build-to-rent ambitions, citing the commercial reality of higher borrowing and construction costs, and a changed market environment. See: John Lewis exits build-to-rent housing projects.

This matters because institutional investors do not leave the sector due to emotion. They leave when the numbers no longer work.

Property118’s view is straightforward. If a well-capitalised institution reassesses and retreats, it becomes far harder to dismiss the warnings coming from smaller landlords, letting agents and lenders.

“When a major institutional investor enters the sector with long-term ambitions and then withdraws after assessing the commercial realities, it reinforces what private landlords have been experiencing for years,” Property118’s founder said. “This is not about sentiment. It is about viability.”

Build-to-rent is still part of the housing mix. Property118 is not arguing otherwise. The question is whether it can scale fast enough, in enough places, and at the right price points, to offset supply lost through landlord exits.

John Lewis stepping back makes that question more urgent.

Shelter’s influence, and the problem with campaigning without supply accountability

Property118 is directly critical of Shelter for one central reason. In Property118’s view, Shelter has been a leading force in pushing a political narrative that frames landlords primarily as a problem to be constrained, rather than as participants who must remain willing to provide housing if supply is to hold up.

Shelter is a major national charity with significant financial resources, receiving income from donations and grants that runs into many millions of pounds each year. Its work includes campaigning, policy advocacy, and the provision of advice and support services. It does not, however, build or provide housing at scale.

Property118’s concern is not that Shelter campaigns, it is that the campaigning environment has become disconnected from supply accountability. The louder the pressure to constrain landlords becomes, the weaker the incentive becomes to stay in the sector and maintain rental homes.

Property118 has previously reported on Shelter’s public commentary around rising rents and the temporary accommodation crisis, alongside warnings from industry bodies about landlord exits. See: Shelter blames rising rents as NRLA warns of landlord exodus.

“Shelter’s objectives are framed around protecting tenants,” Property118’s founder said. “The difficulty is that policies which discourage landlords from providing housing ultimately reduce supply. The result is fewer homes and higher rents.”

Shelter, like other housing charities, argues that stronger regulation is necessary to improve standards and protect renters. That is an argument many people find compelling. The issue is what happens when regulation, tax and political messaging combine to reduce participation. Good intentions do not override market mechanics.

When supply contracts, tenants compete harder. When tenants compete harder, rents rise and choice falls. That is not ideology, it is the unavoidable consequence of a sector becoming less attractive to operate within.

Renters’ Rights Act uncertainty, and a government that admits it did not assess supply impact

The Renters’ Rights Act represents one of the most significant shifts in the private rented sector for a generation. It changes the practical balance of risk, enforcement, and certainty around possession and tenancy structures.

What is astonishing, and now firmly in the public domain, is that the government has admitted it did not carry out an impact assessment on how key elements of the Renters’ Rights Act might affect rental supply.

Property118 has reported this directly, including the written question that triggered the admission. See: government admits no impact assessment of Renters’ Rights Act on supply.

For Property118, this is not a procedural footnote. It is the heart of the problem.

If government does not model the impact on supply, it risks designing reforms that feel morally satisfying but deliver worse outcomes, especially for the renters they aim to protect.

Property118 has also reported on related issues around readiness and capacity, including claims about court preparedness, and the reality of extended waiting times. See: government claims courts will be ready for Renters’ Rights Act.

The sector’s need is not simply new rules. It is predictable enforcement, workable processes, and policy that understands how landlords make decisions. A stable market is built on clarity. If the rules feel uncertain, contested, or operationally unrealistic, participation declines.

Reform UK’s pledge to scrap the Renters’ Rights Act shows how politically fragile the framework has become

Legislation that reshapes a market should ideally settle into place and remain stable for years. The private rented sector relies on long-term commitments; mortgage terms, refurbishment cycles and portfolio planning all operate on multi-year horizons.

Instead, the Renters’ Rights Act is already politically contested, with Reform UK signalling an intention to repeal it.

Property118 has published commentary on this point and its implications for confidence and supply. See: Property118 analysis on Reform UK and the Renters’ Rights Act.

For Property118, the key issue is not which party is right. It is what this level of political volatility does to supply.

Landlords and institutional investors watch signals. If they believe the rules may change again, they delay investment, reduce exposure, or exit. That does not require a conspiracy, just rational decision-making.

In a market already short of homes, hesitation becomes a supply problem. Property118’s founder put it bluntly; “Housing investment depends on stability. When the legislative framework becomes uncertain or politically contested, landlords pause or withdraw. That inevitably tightens supply.”

The consequence tenants feel first: less choice, higher rents, and reduced mobility

It is tempting for campaigners to talk about landlords as though they are optional, but the housing system does not work that way.

Social housing is not expanding fast enough to meet need. Owner-occupation remains inaccessible for many. The private rented sector is the pressure valve, and it only functions when enough people are willing to provide homes to rent. When the pressure valve tightens, tenants feel it. Not in theory, but in daily life.

Viewings become competitive, tenants make rushed decisions, families accept compromises on location, size and condition. People stay put because moving is too hard, even when work, school or family life would benefit from flexibility.

Property118 has also explored the wider directional risks, including international policy reversals where governments tightened rules, triggered exits, then scrambled to reverse course. See: anti-landlord policy U-turns abroad spark warnings for the UK.

This is why Property118 keeps returning to the same point; tenant protection and supply are not competing objectives, they are linked. If the UK wants better standards, it must enforce against rogues and support professionalism. If it wants stable rents and better choice, it must also maintain conditions in which landlords and institutions remain willing to provide homes.

Property118’s position: stop pretending supply is automatic

Property118 is not asking for a return to the past, the sector has moved on, and standards have risen and must continue to rise.

Property118 is asking for a policy approach that accepts one basic truth; rental supply is not automatic. It is the product of commercial decisions made by individuals and institutions over many years. When those decisions turn negative, rental housing disappears. It may reappear later, but often at a higher rent level, or in a different ownership model, or not at all.

That is why Property118 believes Shelter must take responsibility for the consequences of campaigning that pushes policy in one direction without acknowledging supply effects.

“This is not about defending landlords,” Property118’s founder said. “It is about protecting tenants from the predictable consequences of shrinking supply. If we keep reducing participation, we will keep increasing rents and instability.”

Property118 will continue reporting on landlord exits, institutional investment shifts, and the real-world impacts of legislation as it lands.

For policymakers and campaigners, the challenge is not to win the argument, it is to avoid being surprised by the outcome.

For tenants, the priority is simple; more homes, more choice and more stability.

Property118’s warning is equally simple. If the UK continues to pursue housing reform without supply accountability, the landlord exodus will accelerate, and the people who will suffer first are the renters the reforms were meant to protect.

Why Property118 continues to publish this reporting

Property118 exists to report openly on developments affecting landlords, tenants, and the housing market. Property118 does not operate behind a paywall. Property118 does not restrict access to its reporting. Property118 remains free to read because access to accurate information protects landlords from costly mistakes and helps maintain confidence in the sector.

Property118 articles now appear in more than 3,000,000 Google search impressions each month. That reach exists because landlords, lenders, journalists and policymakers rely on Property118 as a primary source of commercially grounded reporting on the private rented sector.

Maintaining that independence requires ongoing support. Property118 receives no government funding and does not rely on political sponsorship. Its independence allows Property118 to publish evidence-led analysis without compromise.

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Mar
2

Green councillor calls for local rent control powers

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Property118

Green councillor calls for local rent control powers

A councillor has claimed rent controls must be introduced to stop renters from “being plunged into economic hardship.”

Green councillor Alex Mace put forward a motion to Worcester City Council calling for rent controls to be introduced in the city.

Cllr Mace said that while the Renters’ Rights Act will strengthen renters’ rights, it does not go far enough to tackle soaring rents.

People before profit

In a council meeting, Green councillors urged Worcester City Council to vote in favour of the motion, arguing that the government should devolve rent control powers to local authorities.

The Green councillors pointed to a growing number of local authorities and leaders calling for powers to introduce rent controls in the private rented sector, including the Mayor of London, Sadiq Khan and Bristol City Council. Mr Khan previously campaigned to introduce rent controls during his London mayoral campaign.

The councillors also pointed to the Scottish government introducing powers for councils to implement rent controls.

Green councillor Alex Mace claimed rent controls would put people before profit.

He said: “Worcester’s spiralling housing costs are central to the cost of living crisis in our city, with private renters being among the hardest hit. Without making renting more affordable, thousands of residents in the city will continue to face staggering costs, be plunged further into economic hardship and be priced out.

“Rent controls are far from a panacea, they will not fix the housing crisis alone or overnight. However, they are a necessary tool to transition to a housing system which puts people before profit.”

Do not support rent controls

Cllr Mace added that while the Renters’ Rights Act is an important piece of legislation, it does not tackle the affordability crisis, as rents can still be raised to market levels.

However, Liberal Democrat councillors voted against the motion, with councillor Jessie Jagger saying: “We will be voting against the motion as we do not support rent controls. We want to send a clear message to the market that this is not a policy we want to pursue.”

The motion was approved by Worcester City Council with an amendment requiring the council’s communities committee to first consider how the Renters’ Rights Act has impacted residents before writing to the Housing Secretary to request that the government allow local authorities to introduce controls on private sector rents.

The full council meeting can be seen by clicking here with the rent control motion starting at 1:05:58

The post Green councillor calls for local rent control powers appeared first on Property118.

View Full Article: Green councillor calls for local rent control powers

Feb
27

Government admits no impact assessment of Renters’ Rights Act on supply

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Property118

Government admits no impact assessment of Renters’ Rights Act on supply

The government admits it has not carried out an impact assessment on how the abolition of fixed-term tenancies will affect rental supply.

In a written question, Liberal Democrat MP Dr Roz Savage asked what assessment had been made of removing fixed-term tenancies under the Renters’ Rights Act, including the impact on certainty for landlords seeking to sell or recover possession and the potential effect on rental supply.

However, Housing Minister Matthew Pennycook claimed no such assessment has been carried out.

Abolition of fixed-term tenancies will cause chaos

Mr Pennycook pointed to the Renters’ Rights Act impact assessment, which claims the abolition of fixed-term tenancies and replacing them with periodic tenancies will “result in fewer voluntary household moves as tenants will no longer need to plan to move at the end of a fixed term period.”

The assessment looks at the English Housing Survey, which says approximately 6.3% of tenants who moved in the previous 12 months listed the end of the fixed term as the sole reason for moving.

The assessment claims: “These are voluntary moves from tenants that are solely due to the existence of fixed terms, this may be in situations where tenants are unable to commit to another term of at least 12 months.”

However, as previously reported by Property118, many industry experts have warned the abolition of fixed-term tenancies will cause chaos, particularly for the student rental market.

ARLA Propertymark regional executive for Cornwall, Sophie Lang, told Property118: “The student rental market runs in a very set cycle. We know when the term times are and when the year ends. It was very easy to have a fixed-term tenancy, which gave everyone peace of mind that they had their housing sorted.

“Removing fixed-term tenancies will cause uncertainty for landlords and tenants because it means that fixed-term tenancies are no longer there as a protection.”

A survey by agency software firm Alto reveals more than a third (34%) of agents predict the end of fixed-term contracts could devastate the student letting system.

Landlords selling

Dr Savage also asked whether the Renters’ Rights Act could affect the frequency of tenant displacement caused by landlords selling properties, and trends in repeated forced moves for compliant tenants.

Mr Pennycook again confirmed that no assessment had been carried out on this.

The Renters’ Rights Act impact assessment claims the reforms are expected to result in only a small number of landlords exiting the market.

The assessment said: “There is a risk that costs from the legislation may result in some landlords leaving the sector. This is difficult to estimate precisely, though we would expect it to be substantially mitigated by the additional cost per rented property being a very small fraction of average annual rent and asset value.

“The available evidence to date does not suggest that similar reforms to abolish section 21 in Scotland have negatively impacted supply, nor changes introduced by the 2019 Tenant Fees Act, despite concerns they would.”

However, a study by the Scottish Association of Landlords shows a reduction of 22,000 rental properties in Scotland in just one year due to government policies and anti-landlord rhetoric.

A survey by the National Residential Landlords Association (NRLA) found that 41% of landlords plan to sell properties within the next 12 months, compared to only 6% who intend to buy.

The post Government admits no impact assessment of Renters’ Rights Act on supply appeared first on Property118.

View Full Article: Government admits no impact assessment of Renters’ Rights Act on supply

Feb
27

Council plans tougher fines for landlords housing vulnerable tenants

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Property118

Council plans tougher fines for landlords housing vulnerable tenants

A council has been accused of setting a “worrying precedent” over plans to propose large fines for rule-breaking landlords housing vulnerable tenants, a story in The Telegraph claims.

Bristol City Council has proposed in a consultation that landlords who breach safety standards when housing vulnerable tenants would face a 20% premium added to the financial penalty, meaning landlords would be forced to pay £14,400.

The news comes after the Green-controlled council consultation is also asking renters to help decide how much it will fine landlords who breach rules under the Renters’ Rights Act.

Endless escalation of fines

According to The Telegraph, the council claims the definition of a vulnerable tenant will be non-exhaustive and will include young adults and children, people with drug or alcohol addictions, those whose first language is not English, asylum seekers, and people on a low income.

The council also plans to fine landlords an additional 10% if they charge rent above the level set by the Local Housing Allowance (LHA).

The Telegraph reports that under the council’s plans, a landlord who failed to fix a roof causing damp and mould by a specified deadline would face a £13,000 penalty. However, if they charged tenants above LHA rates, they would be required to pay £14,300.

However, industry experts have warned the council’s plans could create chaos for landlords and cause a lack of supply.

Paul Shamplina, founder of Landlord Action, told The Telegraph: “Landlords must comply with safety and licensing laws, but the penalty premium would create an endless escalation of fines.

“Measures like this could further reduce the supply of landlords willing to accommodate vulnerable tenants, particularly in cities such as Bristol, where homelessness levels are already high and social housing is in short supply. It sets a worrying precedent.”

Criminalise landlords unnecessarily

Sean Hooker, of dispute adjudicator Property Redress, said fining landlords was not the answer.

He told The Telegraph: “If penalties are seen as excessive, we are likely to see more appeals, leading to delay and additional cost for enforcement bodies.

“The purpose of these powers is to raise standards and ensure compliance, not to criminalise landlords unnecessarily.

“In many cases, working with a landlord and encouraging investment to upgrade a property will deliver a better outcome for tenants than simply imposing the maximum fine.”

Under the Renters’ Rights Act, councils now have the power to carry out surprise inspections, including entering premises where tenancy records are kept with or without a warrant.

Councils can also compel landlords, letting agents, and third parties (e.g., prop tech companies, banks, accountants, contractors) to provide documents and information related to housing compliance.

Councils will also be able to issue fines of up to £40,000, and the government has released new civil penalty tables. These include a £12,000 fine for operating a property in a selective licensing area without the correct licence.

Property118 has approached Bristol city council for comment.

The post Council plans tougher fines for landlords housing vulnerable tenants appeared first on Property118.

View Full Article: Council plans tougher fines for landlords housing vulnerable tenants

Feb
27

John Lewis exits Build-to-Rent housing projects

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Property118

John Lewis exits Build-to-Rent housing projects

John Lewis is shutting down its housebuilding arm and abandoning plans to deliver 1,000 rental homes across three sites.

The firm is blaming higher borrowing and construction costs since the venture was launched in 2020.

The employee-owned retailer said the decision also covers an exit from property management when four residential building contracts expire.

Resources will instead be redirected towards its core retail brands, John Lewis and Waitrose, as the partnership looks to simplify operations and reinforce its balance sheet.

BtR scheme ends

A spokesperson for the John Lewis Partnership said: “Our rental property ambition was based on a very different financial environment: one with more stable investment returns, lower borrowing costs and more affordable costs to build homes.

“Unfortunately, the current climate – higher interest rates, inflationary pressures and a more cautious property market – has meant the model no longer meets the Partnership’s investment criteria.”

Its move ends a £500m build-to-rent initiative spanning Bromley, Reading and West Ealing, where schemes had been designed to deliver large-scale rental housing.

John Lewis homes plans

The withdrawal follows several years of repositioning inside the partnership’s retail estate, including job reductions and store closures.

Five years ago, the partnership outlined proposals to build as many as 10,000 rental homes, targeting 40% of profits from non-retail activity by 2030.

Development pipelines included construction above Waitrose supermarkets and regeneration of underused land.

Planning consent had been secured in principle across the three current schemes.

However, the Bromley proposals ran into difficulty after affordable housing numbers fell short of early expectations.

Also, the Reading project drew objections from residents concerned about pressure on local infrastructure.

The post John Lewis exits Build-to-Rent housing projects appeared first on Property118.

View Full Article: John Lewis exits Build-to-Rent housing projects

Feb
26

Potentially Exempt Transfer insurance / Gift inter vivos policies

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Property118

Potentially Exempt Transfer insurance / Gift inter vivos policies

Potentially exempt transfer insurance (gift inter vivos policies), protect your family during the seven-year inheritance tax risk period following a gift.

Most landlords have some understanding of the seven-year rule for IHT purposes. What far fewer appreciate is the financial exposure their family faces during those seven years. This exposure is not theoretical. It arises automatically the moment a lifetime gift is made. It exists silently in the background, often unnoticed, until it suddenly matters. For families transferring property, company shares, or substantial capital, the consequences can be severe.

Fortunately, there is a straightforward and commercially rational solution. It is called Gift Inter Vivos insurance, more commonly described as Potentially Exempt Transfer insurance. Understanding how and why it works is essential for any landlord thinking about succession.

The legal foundation: what is a potentially exempt transfer?

A Potentially Exempt Transfer, or PET, is defined under the Inheritance Tax Act 1984. It arises when an individual makes a lifetime gift to another individual.

Typical landlord examples include:

  • Transferring a rental property to a child
  • Gifting shares in a property company or Family Investment Company
  • Gifting partnership interests
  • Transferring beneficial ownership of property
  • Making substantial cash gifts following refinancing
  • Gifting of positive Directors Loan Account balances

The transfer is immediately effective for legal and commercial purposes, however, its inheritance tax treatment remains conditional. If the donor survives seven years from the date of the gift, the transfer becomes fully exempt from inheritance tax. If the donor dies within seven years, inheritance tax becomes payable on a sliding scale. This is known as taper relief.

The inheritance tax exposure reduces over time as follows:

  • Years 0–3: 100% of the liability applies
  • Year 3–4: 80% applies
  • Year 4–5: 60% applies
  • Year 5–6: 40% applies
  • Year 6–7: 20% applies
  • After 7 years: no inheritance tax applies

The exposure declines gradually, it does not disappear immediately. That distinction is critical.

Who actually pays the inheritance tax?

Many landlords assume inheritance tax is always paid by the estate. This is not always correct. Where a PET becomes chargeable due to death within seven years, the primary liability falls on the recipient of the gift. This creates a potentially serious liquidity problem.

Consider a simple example:

A landlord gifts a £500,000 rental property to their daughter.

Three years later, the landlord dies.

Inheritance tax at 40% may become payable, subject to available nil rate band relief.

The daughter may face a tax bill of up to £200,000.

She now owns the property. But she may not have £200,000 in cash.

Her options may be limited:

  • Sell the property
  • Borrow against the property
  • Or use personal funds if available

None of these outcomes may reflect the original intention of the gift. The purpose of the gift may have been to preserve long-term family ownership, not to trigger forced disposal. This is the precise commercial problem that Potentially Exempt Transfer insurance solves.

The commercial purpose of potentially exempt transfer insurance

Potentially Exempt Transfer insurance exists to protect the integrity of lifetime gifts during the seven-year exposure period. It does not change tax law, nor does it reduce tax liability. Instead, it provides liquidity if inheritance tax becomes payable unexpectedly.

If the donor dies within seven years, the policy pays out a lump sum sufficient to cover the inheritance tax.

This ensures:

  • The gifted asset does not need to be sold
  • The recipient is not forced into financial hardship
  • The succession plan remains intact

If the donor survives seven years, no inheritance tax arises and the policy expires unused. This is not a failure. It means the risk has passed safely.

Why this is especially relevant following the death of a spouse

This insurance becomes particularly important after the first spouse dies.

Under UK inheritance tax law, transfers between spouses are exempt.

This means when the first spouse dies, the surviving spouse often inherits the entire estate without inheritance tax.

The survivor then faces an important decision. They may choose to retain everything until death, or they may choose to transfer assets during their lifetime. Many landlords choose the latter.

This decision is usually driven by sound commercial reasoning, not tax avoidance.

Typical motivations include:

  • Simplifying future estate administration
  • Reducing long-term inheritance tax exposure
  • Allowing children to assume ownership gradually
  • Protecting assets from future legislative change
  • Supporting refinancing or restructuring strategies
  • Ensuring continuity of property management

These lifetime gifts create PETs, the seven-year clock begins immediately, Potentially Exempt Transfer insurance protects that transition period. It allows the surviving spouse to act decisively, without exposing their children to financial risk.

How the insurance is structured in practice

Potentially Exempt Transfer insurance is normally arranged as a specialist decreasing term life insurance policy.

The policy runs for seven years.

The insured amount reduces over time in line with taper relief. This ensures the cover closely matches the actual tax exposure.

The policy is typically written in trust for the benefit of the gift recipient. This is critical.

Writing the policy in trust ensures the payout falls outside the donor’s estate and is immediately available to the beneficiary.

The funds can then be used to pay inheritance tax directly. This avoids delays, complications, or unintended tax consequences.

Real-world example relevant to landlords

Consider a landlord with a £2 million property portfolio.

Following the death of their spouse, they decide to gift £800,000 of property to their children. This may represent several rental properties or shares in a property company.

The potential inheritance tax exposure is £320,000.

The landlord takes out Potentially Exempt Transfer insurance for £320,000.

If they survive seven years, no tax arises and the insurance expires.

If they die within seven years, the insurance pays out.

The children retain the properties intact.

The succession plan succeeds.

Without insurance, the children might have been forced to sell property to pay tax.

The difference is profound.

Why this is particularly important for property investors

Property is inherently illiquid. Unlike cash or shares, it cannot be partially sold easily. Forced property sales often occur at suboptimal times. Market conditions may be unfavourable. Tenancies may complicate sales. Transaction costs reduce value.

Potentially Exempt Transfer insurance removes that forced-sale risk. It protects family ownership continuity.

For landlords who have spent decades building portfolios, this protection is invaluable.

Interaction with company structures and family investment companies

Many landlords now hold property through companies or Family Investment Companies.

Lifetime gifts often involve transferring shares rather than property directly. Shares transferred to individuals are normally PETs, so the seven-year inheritance tax exposure still applies.

Insurance protects the value of those shares during the transition period and ensures the corporate structure remains stable. It avoids disruption caused by unexpected inheritance tax liabilities.

Commercial rationale rather than tax avoidance

It is important to understand the true purpose of this insurance.

It does not create a tax advantage.

The tax liability exists because Parliament deliberately designed the PET regime with a seven-year conditional exemption.

Insurance simply protects against the timing risk inherent in that statutory framework. It provides certainty. It allows families to implement succession decisions confidently.

This aligns entirely with the intended operation of inheritance tax law.

Why awareness remains surprisingly low

Despite its usefulness, Potentially Exempt Transfer insurance remains underutilised.

Many landlords focus on tax reduction strategies. Fewer focus on protecting the outcomes of decisions already made, yet succession planning is not complete until the risk period has passed safely.

Insurance bridges that period. It converts uncertainty into certainty.

How much cover is needed and what does potentially exempt transfer insurance cost?

The amount of insurance required depends on the potential inheritance tax exposure created by the gift, not the value of the gift itself.

Inheritance tax is normally charged at 40% on the taxable value of the gift, after deducting any available nil rate band. This distinction is important because many landlords overestimate or underestimate the true exposure.

The correct calculation follows three steps.

First, determine the value of the gift at the date it was made.

Second, deduct any available nil rate band. As of the current tax year, the nil rate band is £325,000 per individual. Where the nil rate band was unused on the first spouse’s death, it can usually be transferred, creating a combined nil rate band of up to £650,000.

Third, apply the 40% inheritance tax rate to the remaining taxable amount.

For example:

  • Gift value: £800,000
  • Available nil rate band: £325,000
  • Taxable amount: £475,000
  • Potential inheritance tax exposure: £190,000

In this scenario, the appropriate starting insurance cover would normally be £190,000.

Because taper relief reduces the liability over seven years, the insurance policy is structured to reduce gradually during that period.

This ensures premiums remain proportionate to the declining risk.

Typical premium costs and what affects them

Premiums for Potentially Exempt Transfer insurance are generally modest relative to the risk being insured.

The cost depends primarily on four factors:

  • Age of the insured individual
  • Health and medical history
  • Amount of cover required
  • Length of the remaining seven-year exposure period

As a broad illustration, a healthy landlord aged 65 insuring a £200,000 inheritance tax exposure might expect annual premiums in the region of:

  • £1,000 to £2,500 per year

At younger ages, premiums can be significantly lower.

At older ages or where health conditions exist, premiums increase accordingly.

However, even where premiums are higher, the commercial logic often remains compelling.

Paying a relatively modest annual premium to protect hundreds of thousands of pounds of family wealth represents a rational risk management decision.

Why the policy is normally written in trust

Writing the policy in trust is not optional. It is essential to achieving the intended outcome.

If the policy were owned personally and paid into the estate, it could itself increase the inheritance tax liability.

Writing the policy in trust ensures:

  • The payout falls outside the estate
  • The funds are paid directly to the intended beneficiaries
  • The money is available immediately
  • Probate delays do not interfere with payment

This ensures inheritance tax can be settled promptly without forcing asset sales.

Most insurers provide standard trust documentation for this purpose.

Medical underwriting and practical considerations

Unlike whole-of-life inheritance tax insurance, Potentially Exempt Transfer insurance is temporary. The maximum term is normally seven years. This limited duration reduces underwriting risk for insurers and helps keep premiums reasonable.

Medical underwriting is still required.

This typically involves:

  • A health questionnaire
  • GP report if necessary
  • Occasionally a medical examination

Approval is usually straightforward for individuals in reasonable health.

Even where health conditions exist, cover is often still available, though premiums may increase.

When insurance may be particularly valuable

Potentially Exempt Transfer insurance becomes especially valuable where the gifted assets are illiquid or strategically important.

Examples include:

  • Rental properties intended to remain in family ownership
  • Shares in Family Investment Companies
  • Partnership interests
  • Properties with long-term tenants
  • Assets intended to provide future income for children

In these situations, forced sale would undermine the purpose of the original gift.

Insurance protects against that outcome.

Why this is fundamentally about protecting certainty

The seven-year rule creates a period of uncertainty.

No one can predict lifespan. That uncertainty cannot be eliminated.

It can, however, be managed.

Potentially Exempt Transfer insurance transforms an uncertain tax risk into a known and manageable cost.

It allows landlords to implement succession plans confidently.

It ensures their decisions achieve the intended outcome.

It protects both the financial and emotional objectives behind lifetime gifting.

Insurance providers

Royal London Insurance

LV

Legal & General

Aviva has a particularly helpful spreadsheet available for download here

Why regulated whole-of-market IFA advice is essential when arranging PET insurance

Potentially Exempt Transfer insurance is straightforward in principle, but the consequences of getting it wrong can be severe.

The amount insured must be correct. The policy must be structured correctly. The trust must be drafted correctly. The taper relief profile must be reflected accurately.

These are not administrative details. They determine whether the insurance actually delivers the protection intended.

This is why regulated, whole-of-market Independent Financial Adviser advice is essential.

A regulated IFA has a legal duty to act in your best interests. This duty is enforced by the Financial Conduct Authority. Advisers must assess your circumstances properly, recommend suitable products, and accept regulatory accountability for that advice.

This provides protection that cannot be replicated through direct-to-consumer purchases or restricted advisers.

Whole-of-market access is equally important.

Different insurers have different underwriting criteria, pricing models, and trust options. Premium differences between insurers can be substantial, particularly for older clients or those with medical conditions.

A whole-of-market IFA can approach multiple insurers and identify the most appropriate and cost-effective solution.

Just as importantly, they ensure the insurance aligns with your wider estate planning strategy.

Inheritance tax exposure does not exist in isolation. It interacts with:

  • Your available nil rate bands
  • Transferable nil rate band from a deceased spouse
  • Residence nil rate band eligibility
  • Existing lifetime gifts
  • Trust arrangements already in place
  • Corporate ownership structures

An experienced IFA will assess the entire position, not just the individual gift.

This prevents both over-insurance and under-insurance.

Over-insurance wastes money on unnecessary premiums. Under-insurance exposes your family to avoidable tax liabilities.

Both outcomes are undesirable.

Trust structuring is another critical area.

The policy must normally be written into an appropriate trust to ensure proceeds fall outside your estate and are available immediately to beneficiaries.

Incorrect trust structuring can undermine the effectiveness of the insurance.

A regulated adviser ensures this is done properly.

This professional oversight provides something more valuable than the policy itself. It provides confidence that your succession planning will work as intended.

For landlords who have spent decades building property portfolios, that certainty matters.

Insurance is the tool. Regulated advice ensures the tool is used correctly.

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The broader emotional and commercial reality

Succession planning is not purely technical. It is deeply personal.

It reflects decades of work, sacrifice, and commitment.

Landlords build portfolios to create security, independence, and opportunity for their families.

Potentially Exempt Transfer insurance ensures those intentions are not undermined by timing risk.

It protects continuity.

It protects certainty.

Most importantly, it protects the outcome.

Frequently asked questions

Can Potentially Exempt Transfer insurance be arranged on a ‘life of another’ basis?

Yes. This is both possible and common.

The recipient of the gift, for example your children, can take out the insurance policy on your life. This is known as a “life of another” policy.

In this arrangement:

  • The children own the policy
  • The children pay the premiums
  • The policy pays out to the children if the donor dies within seven years

This structure ensures the funds are available precisely where the inheritance tax liability arises.

It also ensures the policy proceeds do not form part of the donor’s estate.

This approach is often commercially sensible where the gift recipient wishes to protect the asset they have received, particularly where the asset is valuable or strategically important.

Is there an insurable interest when children insure a parent’s life?

Yes. UK insurance law recognises that recipients of a Potentially Exempt Transfer have a clear financial interest in the donor’s survival for at least seven years.

If the donor dies within that period, the recipient may become liable for inheritance tax.

This potential financial exposure creates a valid insurable interest.

Insurers routinely accept this basis for Gift Inter Vivos policies.

Who normally pays the premiums?

This can be structured in several ways.

  • The donor can pay the premiums
  • The recipient can pay the premiums
  • Premiums can be funded indirectly from gifted income or assets

Where the recipient pays the premiums directly, this ensures the protection is independent and avoids increasing the donor’s estate.

Are the insurance premiums themselves treated as gifts for inheritance tax purposes?

Yes, where the donor pays the premiums, they are normally treated as gifts for inheritance tax purposes.

However, in many cases they fall within one of the statutory exemptions.

These may include:

  • The £3,000 annual gift exemption
  • Regular gifts out of surplus income exemption

Where premiums qualify for these exemptions, they do not create additional inheritance tax exposure.

A regulated Independent Financial Adviser can help ensure premiums are structured efficiently within the available exemptions.

What happens if the donor becomes uninsurable after making a gift?

This is an important practical risk.

If insurance is not arranged at the time the gift is made, and the donor later develops health problems, insurance may become unavailable or prohibitively expensive.

This would leave the recipient exposed to inheritance tax risk for the remainder of the seven-year period.

For this reason, insurance should normally be considered at the same time the gift is made, while the donor remains insurable.

Does the policy need to be written in trust if arranged on a life of another basis?

Not necessarily.

If the recipient owns the policy directly, the proceeds are paid to them automatically and do not form part of the donor’s estate.

However, professional advice is still essential to ensure the ownership structure aligns with the wider estate plan.

What happens if the donor survives seven years?

The Potentially Exempt Transfer becomes fully exempt from inheritance tax.

The insurance is no longer needed and the policy expires.

This means the succession plan has completed successfully and the insurance has served its purpose by protecting the transition period.

Can the insurance cover multiple gifts made at different times?

Yes. Insurance can be structured to reflect multiple gifts.

This may involve:

  • A single policy covering multiple transfers, or
  • Separate policies aligned to the timing of each gift

This ensures each seven-year exposure period is properly protected.

Is Potentially Exempt Transfer insurance widely available in the UK?

Yes. Several major UK insurers offer Gift Inter Vivos policies.

These include Royal London, LV, Legal & General, and Aviva.

Policies are typically arranged through regulated Independent Financial Advisers with access to the whole market.

Is this type of insurance only relevant for very large estates?

No. It can be relevant wherever a significant lifetime gift has been made.

Even relatively modest property transfers can create inheritance tax exposures large enough to justify insurance.

The commercial decision depends on the potential tax liability, the donor’s age and health, and the importance of protecting the gifted asset.

The post Potentially Exempt Transfer insurance / Gift inter vivos policies appeared first on Property118.

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Feb
26

Why Landlords Are Taking Time to Plan Before They Act

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Property118

Why Landlords Are Taking Time to Plan Before They Act

More landlords than ever are stopping to take stock. The days of constant expansion are giving way to careful evaluation, because the cost of standing still has started to feel as risky as the cost of growth.

Legislation, regulation, and taxation now shape almost every decision. A single oversight can turn a profitable portfolio into a liability, and no landlord wants to watch years of effort slip through the cracks. The instinct for growth remains strong, we can’t help ourselves when we walk past an estate agent’s window, but the priority has shifted towards security and control.

Property still provides one of the most dependable foundations for long-term wealth, yet the real measure of success has become how safely that wealth is structured, protected, and passed on.

A New Kind of Professionalism

Today’s landlords see themselves as business owners, not speculators. They take pride in managing assets responsibly, providing good homes, and keeping ahead of regulation. That professionalism is being tested as compliance demands and risks multiply, and margins narrow.

Some are choosing to streamline. They are selling weaker performers first, reducing debt, and keeping the properties that deliver the best returns for effort and risk. Others are reorganising ownership to strengthen cash flow or prepare for succession. Behind every decision is the same motivation: to protect their position and preserve their legacy.

Hope now comes from clarity rather than optimism. Landlords want a plan that gives them freedom to choose their next step with confidence.

Why Joined-Up Thinking Matters

A rental property business no longer rewards guesswork. Accountants focus on tax, brokers on finance, lawyers on structure, yet no one joins those threads together. That is where confusion turns into frustration.

Property118 bridges those gaps. A consultation with Property118 gives landlords a single point of reference, transforming scattered information into a clear understanding of what truly matters. It begins with a discussion about objectives, family, and finance. We identify where exposure lies and where opportunities remain.

Curiosity drives the process. Many clients arrive wanting to test an idea or sense-check a plan. They leave with renewed trust in their own decisions and confidence that each move fits within the rules.

The Emotional Return on Planning

The feeling most often experienced by landlords who consult us is relief.

Relief that we understand them, the numbers finally make sense, that risks are contained, and that there is still a future for them in a business that’s still worth being proud of. For some landlords, the conversation rekindles ambition; for others, it brings peace of mind that retirement and passing on a legacy with minimal hassle can be approached on their terms.

It is also about belonging. Thousands of landlords use Property118 not because we promise shortcuts but because they value being part of a community that approaches property investment professionally, ethically, and intelligently.

Every consultation ends with a renewed sense of freedom. Decisions feel lighter, the next steps clearer, and the purpose of ownership sharper.

Our consultancy doesn’t only cover retirement, business continuity and legacy planning. It can also unlock the lifestyle you once dreamed about but forgot to implement.

⚖ Important Notice – Scope of Planning Support

Where our recommendations touch on areas requiring regulated input, we refer clients to appropriately authorised professionals for advice and execution.

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