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One of the biggest points of discussion in buy-to-let and UK expat and foreign national landlord circles in recent months has been the Renter’s Rights Bill. This bill has been identified as a priority for the Labour government in this parliament and it promises huge changes for all landlords, including UK expat and foreign national investors.
Stuart Marshall, CEO of Liquid Expat Mortgages, examines how the UK expat and foreign national landlords can utilise the Renter’s Rights Bill to ensure stability and longevity with their investments in the UK’s private rented sector.
What is the Renter’s Rights Bill?
The Renter’s Rights Bill is a bill intended to reform the rental sector, introducing new safeguards for tenants, increasing fairness and improving processes for landlords. ‘Rental reform is nothing new for landlords’ says Stuart Marshall. ‘And many of our UK expat and foreign national investor clients will have seen – and dealt with – many changes over the years. However, the main headline change that the Renter’s Rights Bill looks to enforce is the removal of Section 21, or ‘no-fault’ evictions, which are one common way that landlords evict tenants. There has been alarm around this with some landlords criticising the bill for making it more difficult to legitimately evict tenants. However, there is little mention of the Renter’s Rights Bill’s strengthening of Section 8 evictions for landlords, under which landlords will be granted a bigger scope for reasons to evict and a streamlined court process. This does a lot to offset the potential negative impact of the removal of no-fault evictions and provide security for both tenants and landlords in the sector.
Other key points include:
- A move to a simpler tenancy structure where all assured tenancies are periodic, providing security for tenants and empowering them to challenge poor practice.
- Improve protections against backdoor evictions by allowing tenants to appeal excessive above-market rents intended to force them out.
- Empower a new Private Rented Sector Landlord Ombudsman to provide quick, fair, and impartial resolutions to tenant-landlord disputes.
For a more detailed look at the key points of the bill, visit the government website.
Analysis.
One obvious thing to note is that despite so much of the discussion centring around the removal of Section 21 evictions, most tenants choose to leave their rented properties themselves according to the most recent English Housing Survey. The same survey reports that the average tenancy lasts 4.3 years and most tenants choose to end this tenancy themselves because of a change in their housing requirements. So, it’s likely that in most cases, Section 21 won’t be needed anyway.
More generally, despite a lot of talk and fearmongering, the prospects for the sector remain very good. For the landlords who aren’t up to the challenge of providing quality rentals in a competitive market, it’s likely that they will leave the sector, deepening the supply/demand imbalance which has been pushing up average rents over recent history. This means that for those UK expat and foreign national landlords who do continue to manage a rental property, it will continue to be a very profitable venture – with the added bonus of increased stability and confidence for both tenants and landlords.
‘Conversations around the Renter’s Rights Bill should be reframed to centre on how landlords can work within the sector to make it an appealing environment for tenants, which should feed into longer tenancies, fewer disputes, and better confidence in the rental market more generally’ says Stuart. ‘According to the English Housing Survey, some landlords are not meeting the standards expected from them, with around 10% of rented homes qualifying as dangerous or suffering from damp. But it’s clear that these landlords are in the minority and encouraging them to leave the sector will only improve overall perceptions of landlords, as well as increasing tenant confidence and satisfaction.’
UK Expat and Foreign National Landlords Shouldn’t Fear the Renter’s Rights Bill.
‘Like any news or reform, there are always going to be headlines focusing on the worst-case or horror scenarios. After all, measured headlines don’t draw too many eyes! But while it’s true that the Renter’s Rights Bill will be a big change for both tenants and landlords, for those who are letting a property legally and safely with good intentions, there is nothing to fear. Compliance standards may be more demanding but it’s also true that good landlords will be able to reference their records of good compliance to attract better tenants, and in greater numbers.’
‘More than ever, it’s important for UK expat and foreign national investors to have the best infrastructure possible supporting them. Expert UK expat and foreign national mortgage brokers will be able to help guide these investors towards properties which are most likely to meet compliance standards with minimal renovation. They can also help them to utilise the excellent range of mortgage products to get the best deals and maximise the profitability of their investments. There is so much to be positive about: from longer tenancies, to competitive mortgage rates, sky-high tenant demand, and growing rental yields. Further, landlords have adapted to all sorts of legislation changes from the introduction of HHSRS, Right to Rent checks, GDPR compliance, minimum EPC requirements, and all the post-Covid changes in the market. UK expat and foreign national landlords exhibit a remarkable ability to adapt and navigate an ever-changing landscape and continue to provide quality rental properties within the UK’s rental market.’
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Haslingden, Rossendale
BB4 5HU
Phone: 0161 871 1216
www.liquidexpatmortgages.com
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Disclaimer:
The content of this article is provided for informational and illustrative purposes only and is not intended as financial, legal, or tax advice. Liquid Expat Mortgages is authorised and regulated by the Financial Conduct Authority (FCA) to provide mortgage and protection advice. However, the FCA does not regulate certain investment mortgage contracts, and any views expressed herein may include unconventional or contrarian perspectives that do not necessarily reflect standard industry practices or regulatory guidance. Your home or property may be repossessed if you fail to keep up repayments on a mortgage or any other debt secured against it. We are not authorised to provide legal or tax advice, and we strongly recommend consulting a qualified professional for personalised guidance tailored to your circumstances before making any financial decisions.
