Bournecoast Property Agents, a leading property agency in Bournemouth, has expressed grave concerns over the potential consequences of the proposed Renters Rights Bill and possible Capital Gains Tax (CGT) increases for landlords. With the property industry already facing significant pressures, these changes threaten to destabilise the market, potentially harming the very tenants the Renters Rights Bill aims to protect.
Des Simmons, Managing Director of Bournecoast Property Agents, issued a stark warning:
"The Renters Rights Bill, as it stands, would crucify the property industry. With seemingly no real formal impact assessment conducted, it is poorly thought out with key components missing and significant consequences not being considered. We are already seeing landlords retreating from the sector, and any further tax burdens or rigid regulations will only accelerate this exodus. The end result will be fewer homes available for renters, rising costs and the complete opposite of what these reforms are trying to achieve."
He added: “The huge financial risk landlords take when investing in property should be taken into consideration, usually involving large sums of money. The new proposals offer very little protection for landlords to manage these risks or effectively manage their investments. The removal of fixed-term tenancies and additional restrictions leave landlords vulnerable, making it increasingly difficult for them to secure their financial interests in a market that already demands significant upfront investment and operational costs.”
Another key area of concern is the failure to address the short-term let market, which is vital for providing temporary accommodation. The current proposals include grounds for possession specific to the student let market but exclude other more general short-term lets, despite their importance. For example, at present, there is a perfectly suitable Ground 8 specifically for holiday accommodation, which allows landlords to regain possession after a short term let if the property has been used for commercial holiday letting in the past 12 months and the tenant has been given notice in advance of the tenancy that possession will be required for the same purpose again in the future. This prevents long term landlords from abusing this ground to get possession of their property without reason from a long term tenant. The proposal to repeal this ground is puzzling, as it works so well in its current format and offers a solution to the thousands of tenants who only require accommodation for a temporary period. Repealing Ground 8 would leave these tenants in need of temporary accommodation without options, while landlords with properties available for specific periods, such as winter lets, would have no legal recourse to manage their tenancies effectively.
The absence of an official impact assessment is why key areas of the letting industry have been missed and the Renters Right Bill has the risk of being extremely damaging. Industry bodies such as Propertymark are also cautioning that these changes could lead to unintended consequences, including rent hikes, a shrinking rental market and a reduction in property standards.
With housing shortages already a national issue, the introduction of policies that drive landlords out of the market will worsen the crisis. Bournecoast Property Agents urges the government to reconsider the current format of the bill and the proposed tax increases, inviting a more thought through proposal to ensure any new policies serve the best interests of both tenants and landlords.