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Leaders Romans Group Highlights the Crucial Social Role of Landlords in Preventing Homelessness and Calls for Landlords Reform Bill

December 1, 2023 PR Officer

Leaders Romans Group (LRG) is raising awareness about landlords’ vital role in preventing homelessness and advocating for a Landlords Reform Bill to safeguard their landlords’ position. The group emphasises that pushing landlords to the limit could lead to serious negative consequences for the housing sector and the individuals it serves.

The concept of the amateur or small-scale landlord emerged in the 1990s as a response to the depletion of the rental market caused by the shortage of council houses. Incentivised by the Right to Buy policy, individuals began investing in properties to help address the shortage and create a supply within the private rented sector. This grassroots movement played a pivotal role in alleviating housing challenges faced by many.

Allison Thompson, National Lettings Managing Director, Leaders Romans Group said, “Over the years, numerous changes, including regulatory measures and alterations to mortgage relief, have significantly impacted the position of landlords, leading to some considering selling their properties. These changes have inadvertently affected the private rented sector’s capacity to provide homes and support to those in need.”

As homelessness rates continue to rise, evidenced by Prince William’s recent initiative, Homewards, the potential for an even greater increase in homelessness looms if more landlords are compelled to exit the market. Homelessness has a devastating impact on individuals and families and places immense strain on local authorities and charities struggling to manage the crisis.

In a recent survey conducted by LRG, landlords called for a comprehensive Landlords Reform Bill that addresses their concerns and ensures that they are not disproportionately penalised. This Bill would recognise landlords’ essential role in preventing homelessness and provide the necessary safeguards to encourage continued participation in the rental market. The Bill could include dedicated housing courts to speed up the legal process, a repeal of Section 24, and an increase of social housing stock.

Allison goes further to say, “A repeal of Section 24 is needed, as Section 24 removes a landlord’s right to deduct the majority of their finance costs, including mortgage interest and arrangement fees, from their rental income before calculating their tax liability. It is putting up costs, which puts up rents, which contributes to hardship and homelessness.”

“Over 29,000 landlords signed a recent petition calling on the Government to reverse Section 24, but the government confirmed they would continue to set mortgage interest relief against rental income only at the basic rate of tax. Due to substantially increased costs (not only of property finance, but of energy and building materials) this change is much needed.”

In support of the call for a Landlords Reform Bill, numerous landlords highlighted the urgent need for reform in LRG’s survey:

Graham Clarke of Gosport, commented, “The Government do not seem to understand that the changes they’ve made mean that there will be much less choice for renters. Similarly, the blunt knife of interest rate increases is also driving landlords out of the market. Very short-sighted by both the Government and the Bank of England.”

Another landlord said, “In the future, landlords will take a greater risk when entering into an AST with a ‘new’ tenant. As a result of the added risk, increased costs and increased compliance, many landlords will leave the PRS, reducing availability. This is detrimental to tenants.   There will be a further decrease in the number of rental properties and an increase in the number of applicants considered too risky to be offered a tenancy.”

Another said, “More landlords will sell up, so less rental properties available and at higher rents for tenants.”

LRG believes that a Landlords Reform Bill is necessary to protect landlords and safeguard the broader housing ecosystem. By acknowledging the critical role played by landlords in preventing homelessness, policymakers can work towards sustainable solutions that benefit both tenants and property owners.