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Residential Management Team
Guy Coggrave, Managing Director, GSC Grays, believes the introduction into Parliament of The Renters (Reform) Bill, which is set to change the current private residential rental system, offers landlords the opportunity to review their portfolio and consider if their properties and business objectives fit with the governments proposed legislation. For many, this may be an opportune moment to look at restructuring their portfolios or consider alternative investment opportunities.
The changes are not expected to come into force until 2024 and the intervening time gives landlords time to seek professional advice to understand the likely impact of the Bill which will abolish a landlord’s right to impose a no-fault eviction, see changes to the term, rent, and rent review process, and will introduce a two-tier system of fines and criminal offences for the main areas of landlord compliance.
The Bill will be implemented when it receives Royal Assent and will have two stages with the government expected to provide at least six months’ notice of the first implementation date after which all new tenancies will be periodic and governed by the new rules. When the second implementation date is set, all existing tenancies will also be governed by the new rules.
Guy Coggrave said: “Landlords should be reviewing their portfolios and making sure under the proposed legislation that their properties can comply, deliver a reasonable return on investment, and still meet their objectives. For some now may be a sensible time to restructure or exit portfolios making the most of the current relatively low capital gains tax position, which many well-informed commentators believe is likely to increase, particularly if we have a change of government. Being equipped with the correct professional advice will give landlords the opportunity to review the value of their property and consider other options such as restructuring their portfolios or investing elsewhere such as in commercial property. For those remaining in the sector, having the right management systems and advice will be essential”.
It is important to note that while this is still a white paper, the Government says it stands firm on their commitment to push this through to legislation. “The Government have a manifesto commitment to abolish section 21, (which allows landlords the right to impose no-fault evictions) and we will do so as soon as parliamentary time allows.” Felicity Buchan, Under-Secretary for Levelling Up, Housing and Communities (20th February 2023).
With a general election expected in 2024, that time could be fast approaching.