As a buy-to-let landlord with over twenty-five years of experience in buying, selling and letting property, the Renters Rights Bill is the most moronic, ill-thought-out piece of housing legislation in history.
Coming into effect today, it’s claimed the legislation will protect renters. In fact, it’s led to an exodus of private landlords, a reduction in rental properties, and tenants facing the highest rents in history.
How bringing in legislation that reduces supply, increases rents, and seemingly ignores the basic principles of supply and demand, protects renters is beyond my comprehension.
But like so many pieces of legislation from this economically illiterate government, it puts virtue and vote-winning over real- world consequences.
This bill is also the final nail in the coffin for many private landlords who have been demonised, taxed, over-regulated, and fleeced for years.
Granted, Labour did not hammer in the first nail - it was in 2015 when George Osborne’s toolbox taxed landlords into oblivion by removing mortgage interest relief, meaning tax is paid on the entire rent received, minus a small allowance and expenses, rather than profit.
Since then, landlords have been seen as cash cows with millions in the bank, rather than the small investors who most are.
Over 80 per cent of landlords own under four properties. Nearly half own only one, many becoming ‘accidental’ landlords due to temporarily relocating for work or a relationship.
They’ve faced even more tax, more regulation, higher stamp duty, endless certifications, limited tenancy deposit amounts, selective licensing, and sky- high buy to let mortgage fees.
However, for many, the Renters' Rights Bill is simply the final straw.
The consequences of this legislation lay bare this Government's utter stupidity, as every problem it claims to solve is actually made worse overall.
For instance, the bill stops fixed-term tenancies - all tenancies are now on ‘rolling’ contracts instead. Barring a couple of exceptions, it’s solely up to a tenant when a tenancy ends, rather than a landlord being able to end the tenancy when the fixed term finishes.
As a landlord, let me explain how Labour just took a blowtorch to the rental market | Getty Images
Paying multiple months of rent in advance of a new tenancy is also banned. This also has adverse consequences. A couple of years ago, I rented one of my flats to a couple who, on paper, weren’t great financial prospects; He owned a small business, she worked in retail and was a part-time student.
But I liked them, so we made it work by my accepting their offer to pay three months' rent up front, thereby reducing the amount they’d be credit- checked for.
I wouldn’t be allowed to take that risk now; in fact, I’ve just rented the same flat for more money to a couple who are high earners with perfect credit, as I won’t be taking any risks going forward. I know countless other landlords who feel the same way.
This bill has simply had to make landlords and letting agents more ruthless and risk-averse. How does this help tenants who don’t have perfect credit?
The legislation also increases the time period during which an eviction notice can be served to tenants who don’t pay their rent, increasing this from two to three months of arrears.
Again, this just means many landlords are simply charging more rent to cover themselves, as well as being far more selective with tenants to reduce their risk, meaning tenants who aren’t in a grade-A financial situation suffer.
These are all real-world consequences. Is the Government aware of this and just doesn’t care? Or worse, so ideologically captured by the Left of its party, it genuinely has no idea of the effects of its policies?
It’s now estimated that a third of landlords have left, or are planning to leave the market, directly as a consequence of this bill.
Estate agency Savills estimates the UK has lost 200,000 rental properties in the last 12 months, as Landlords have simply had enough.
And what does a lack of supply mean? More demand and higher prices. That’s the reason the ONS reported the UK now has the highest rents in history.
How on earth can the government claim they’re ‘protecting renters’ when they’re now left with paying more for fewer homes available?
This, of course, is all basic economics, yet sadly, we’re now at a stage where this appears to be beyond the grasp of a government that would seemingly find an abacus too complicated.
What’s even more barmy is the latest idea Rachel Reeves has reportedly had of implementing a year-long rent freeze to help with the ‘cost of living’ crisis.
Although now denied, if this happened, it demonstrates a chancellor gazumping herself with her lack of understanding of economic consequences.
If she doesn’t realise this would simply lead to even higher rents for new tenancies to start with, we really are doomed. Rent controls have never worked well. Why would they now?
And let's not forget this is a chancellor unable to even follow the rules landlords are now subject to. Although her letting agent admitted liability, her not obtaining the appropriate selective licence for the property she herself rents out was a staggering lack of oversight, and a double standard many decent landlords would have found infuriating.
The hypocrisy gets even worse when you consider the number of Labour councils that are themselves utterly dreadful social housing landlords.
Many are renting out properties which fall well below basic housing standards, riddled with damp and mould, with delays in repairs, and unlawful evictions so rife, they’ve been regularly reprimanded by the Housing Ombudsman.
Labour- run Lambeth council, once presided over by Housing Secretary Steve Reed, was described by the Housing Ombudsman as suffering from “maladministration and mistreatment of council tenants”.
Shouldn’t Labour literally get its own houses in order before going after private landlords just trying to make a living?
Cluelessness, economic illiteracy, a complete lack of foresight into the consequences of their policies, and utter hypocrisy seem to be the thread running through many aspects of this government’s time in office, and the Renters' Rights Bill demonstrates this perfectly.
How did our once great nation end up with such utter incompetence?
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