As restrictions have eased and we have been able to meet and see more of our friends the topic of the housing market often crops up.
Wanting to know how the sales and letting markets are is normally the first question, and before not too long talk turns to being a landlord. What keeps cropping up is a general consensus that being a landlord at the moment is quite onerous and who on earth would want to buy a property and let it out currently?
Well, it all depends on your viewpoint I tell people. On the one hand yes, the last year has been very tough for landlords and the constant new legislation over the last few years has been a lot for landlords to deal with but….
The last year cannot be counted as a normal year. No-one in our lifetime has ever had to deal with a pandemic and the effects on the rental market like we have had to. And fingers crossed this is not a situation that is going to be repeated and therefore has to be looked upon as an exception not the rule. Furthermore, people also have to bear in mind that there are always two sides to every story.
While it has been hard for landlords, tenants have suffered too. A lot of tenants work in the industries ravaged by Covid – such as hospitality, retail and leisure – and have ended up being furloughed for an extended time or worse have lost their job. This has created untold pressure and stress for them and the vast majority of tenants who have found themselves in this difficult situation have spoken to their landlords and sorted something out.
But of course, in this day and age of 24/7 news and the society we live in reporting on the majority of tenants who have sorted things out is not news. Instead the focus has been on those who have not dealt with the situation properly and the landlords who have found themselves unable to do anything because of government legislation.
This is probably the crux of the situation. Government legislation over the last year has been very one sided for landlords. To have a non-paying tenant is bad enough, but to then have a non-paying tenant who does not have an open dialogue with a landlord, does not get help via Universal Credit and who is protected by legislation has almost been the final nail in the coffin for landlords.
It’s usually at this point that someone will point out that vulnerable tenants, and those in need, have to be protected and get help and that is absolutely right - they do. The issue is that there needs to be the correct balance between landlord and tenant legislation.
If you think about it, there should never be an arrears situation. If a tenant is unable to pay the rent because they lose their job or have been furloughed then all they needed to do was apply for Universal Credit to help support them and pay their rent. Yet tenants did not do this. Why? Because the way the government dealt with releasing the information to the public.
I am no William Shakespeare but even I could have told the government how they needed to word the legislation and press releases. Suddenly “Rent free“ and “Rent holiday” were banded around and combined with the tone of the press releases the wrong situation was created.
This has had a profound effect on some landlords who have decided enough is enough and are leaving the rental market. And I can understand why, yet despite this, I still think being a landlord now is better than before.
Never before has a landlord had to be so professional. Legislation over the last few years concerning electrical safety, smoke alarms, carbon monoxide alarms, etc now mean that landlords are more professional and their properties safer than they have ever been. Landlords nowadays are a far cry from the type that existed 20 years ago. So why would you not want to be landlord in this day and age?
Demand for rental properties still remains high with a large number of tenants meaning properties are being rented out. The ban on evictions has come to an end and property prices continue to grow making bricks and mortar one of the best investments.
But what about the forthcoming ban on Section 21 notices? Surely it is going to be harder to get rid of bad tenants people ask me? Again, I put this down to bad communication and wording from the Government. It will not become impossible for landlords to remove bad tenants. If it was it would spell the end of the private rented sector as we know it and even I do not believe that is what this or any future Government wants.
The new legislation is looking to remove landlords using the threat of eviction if they felt a tenant was being difficult or asking for too many repairs i.e. the no fault reason.
If a landlord needs to move back into the property or sell it they will still be able to. But what if someone is being difficult and making too many demands people ask me? ‘Simple’ is my reply. If you make sure your property is clean, modern and you invest in your rental property every few years to make sure it is the best it can be, why would a tenant become difficult? It all comes back to landlords being the most professional they have ever been.
And it for these reasons that I firmly believe it is still a good idea to be a landlord. So, if you wish to expand your portfolio or are looking for some advice regarding the lettings market then please do not hesitate to contact me on 020 8958 118.
Written by Richard Wolff, Lettings Manager, Benjamin Stevens Estate Agents.