In Focus (2024 Qtr 2): Tenancy, leasehold & and freehold reform

The second quarterly consultation of 2024 gathered responses from over 800 landlords who let residential properties across England & Wales. The fieldwork was undertaken from June 16th – July 4th, 2024.

In addition to landlord confidence, Quarter 2 asked landlords about the following topics:

• Tenancy sign-up
• Possessions
• Leasehold & freehold reform
• Party manifestos and rental reform

Landlords were asked about how they manage their compliance documents at the start of the tenancy. 

Most landlords surveyed say they provide documentation either before the tenant signs the agreement or on the day the agreement is signed. Only a small portion wait until the day the tenant moves in. 

In terms of method of service, there was an even split between those who serve hard paper copies and those who opt to send digital copies of relevant documents. Older landlords tend to favour paper copies whilst younger landlords prefer electronic options. 

With the main parties committed to the abolition of Section 21 in England, the NRLA dug deeper to prepare up-to-date evidence to policy makers.

The top three reasons landlords served a Section 21 notice were due to rent arrears, property damage and anti-social behaviour. 

Landlords who had served a notice reported on the time taken to receive a possession order. 

• For both Section 8 and Section 21 claims, the biggest grouping of landlords stated it took more than 3 months to progress to the granting of possession orders following notice expiry. 
• Just 4% received a possession order in less than one month. 

Over half of landlords surveyed had a leasehold property in their portfolio compared to one in three landlords who own the freehold for a leasehold property which is let. 

The Leasehold & Freehold Act did not abolish ground rent, focussing instead on making service charges more transparent and accountable for leaseholders. Most leaseholders report paying service charges like building insurance and management fees. 

• When asked about service charges, over one in ten landlords report paying more than £3000 per annum.
• Over one in five landlords say this amount increases each year. 
• In contrast, over half of surveyed freeholders surveyed report charging less than £250 annually in service charges, with most absent of mechanisms for regular increases. 

Quarter 2 coincided with the release of party manifestos ahead of the general election. Landlords were asked for their initial reactions and concerns they had for policies related to the PRS. Comments were analysed through a natural language-based AI platform. Key features of the comments and concerns of landlords which emerged included:

• Concerns over the loss of S21.
• General anti-landlord rhetoric from manifestos.
• Scepticism of manifesto promises.
• Fear of rent controls.