Serious landlords won't shut the door on the government's latest rental reforms
“Safe, warm and in a state of good repair.” Surely these are the most basic standards you demand for the home your family lives in. It’s remarkable then, that in 2022 these are the words chosen by the Housing Secretary to describe the bare minimum conditions each of us should be able to expect of UK rental property. Yet, this is the reality of what still exists across some areas of the British rental system.
Important improvements have been made to the industry over the last decade. Section 24, stamp duty levies, tighter rules and sweeping regulations have promoted corporate ownership of rental property, and professionalised the rental market. Unpopular though they’ve been, these rules have removed bad actors in their thousands and helped raise the expectations tenants have the right to have, about the places they want to live and call their homes.
But, while their numbers may be smaller than at any other time in history, rogue landlords persist. Successive governments, while not getting everything spot on, have been right to continually seek ways to identify these individuals and drive them out of the market.
The new ‘levelling up’ reforms announced in recent days by Mr Gove to bring private rental standards better in line with those demanded of councils and housing associations take these changes one step further.
As a platform exclusively created for and used by landlords in the UK property market, we see day after day that the vast majority of UK landlords are good ones: they care about the conditions of their properties and the lives of their tenants. They see their role as a landlord, as one of responsibility.
We stand behind these new standards and celebrate the inclusion of them into our sector because they will force the minority of those not doing so, up to the standards already upheld by the majority.
Not only that, we urge landlords and others in the buy-to-let market to join us and promote the rules and regulations that matter to increase transparency, accountability and security in the industry. Who better to support an ever more professional and well regulated buy-to-let industry than the participants within it?
It’s wrong to cast these reforms as a tactic to drive the ‘last remaining’ private landlords out of business.
First, and if not too audaciously: this is a Conservative government with a huge majority. When one in four Tory MPs is a landlord, we can continue with some certainty that this is not a Parliament about to vapourise our industry.
Second, these reforms will injure only those landlords who prefer not to treat their investment properties like the business concerns they are.
Investing in a property and allowing people to live in it is a form of business and should be treated like a commercial pursuit. Limited company landlords, whose numbers are rising exponentially, are likely to feel the least impact from these reforms. Instead, many of the new measures have simply been constructed to bring outliers in line with this most professional segment of the landlord community. The idea of a landlord register, for instance, is nothing new to limited company landlords: Companies House is a publicly accessible ledger on which every company set up to invest in property can be found and examined. Transparency and accountability are bywords by which professional landlords aim to live.
Some limited company landlords may feel the least strain on their pocket from these reforms too. By virtue of creating greater profitability, limited companies generate more cash for landlords to make the necessary upgrades to achieve minimum (or over) quality requirements. Likewise, limited company landlords typically already maximise cost and tax efficiencies like deducting mortgage interest that stand to mitigate the increased cost implications of further regulation.
Like professionalisation of the wild west stock market of the 80s, tightening up rules on how to be a landlord might be painful at the time but create a future framework of longevity and security for all.
Now more than ever, as millions of Brits transition from life under the grey cloud of Covid into an uncertain era of high living costs, the only participants in the PRS must be those individuals who understand the regulatory obligations to keep their tenants safe, and do their utmost to do so.
GetGround enables landlords and property investors, based anywhere in the world, to more effectively manage their UK residential investments: facilitating the creation, structuring and future management of buy-to-let companies online. Find out more about us here.
The GetGround Team
Legal note: For information purposes only, none of the information set out here constitutes legal, tax, investment, financial, or other advice. All reasonable efforts have been made to ensure that this information is accurate and up to date; however it is not a comprehensive statement of the matters discussed and should not be relied on as such. GetGround always recommends that you take independent advice.
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