Hi. This is Tom Soane and you’ve probably all seen that the queen has given a speech. This was on May the 11th 2021. So I just wanted to give you all a bit of a summary of what sort of things the queen has said, which might affect anybody in the who’s a landlord or property investor and so on.
So let’s dive right into it. You know what the first thing that I noticed that is that there’s definitely going to be a huge priority set by the government on the private rented sector and part of that is that you can all see how the government are putting loads of plans in place to help people, be able to buy the property or buy their own property. But you can also see that there’s a lot of focus on the rented sector as well, trying to improve the standard of living for tenants trying to get rid of dodgy landlords, dodgy property investors that are really cutting corners and not doing things properly.
So yeah, while the government are going to help people buy their own home, they’re definitely going to enhance the rights of renters as well. Which to me and you as landlords and property investors, you could take that positively or you could take that negatively, you know, the positive side. It’s going to improve our ability to provide the tenants with good homes and safe homes.
It’s going to give us definite rules to follow so that we know exactly what we need to do in order to stay compliant and stay within legislation. But at the same time, if we know all of those things, then we can make sure that it’s profitable. If there’s any gray areas around legislation, we can’t account for that and we can’t forecast for it.
If the government starts bringing in loads of stuff, that’s going to cost us landlords more and more and more money, okay? That’s a bad thing. But if we know that it’s going to happen, then we can forecast for it and we can adjust our own finances for it.
So all of this is going to be called or they’re calling this the renter’s Reform Bill and actually that started a couple of years ago, but it was delayed because of COVID-19 annoyingly. But part of that, for an example, is that we’re going to probably see the end of the section 21 notices or the section 21 eviction process.
To counter that because I think a lot of landlords are going to be affected by section 21, just counter that, there’s going to be a strengthening of the section 8 eviction process. Now section 21 was a notice that you could give to the tenant for any reason. If you wanted to take back that property for whatever reason that you decided, then you could do that using a section 21. Then a Section 8, notice is a much more aggressive notice which was for rent arrears, and antisocial behavior and things like that.
But so now we’re going to see the end of the section 21 notice or the section 21 eviction process and hopefully we’ll see more more grounds that we can use the section 8 eviction process for, because I do think there are people in the world that have a rental property that might just decide that they need to sell that property. And if they can’t do that, because section 21 is gone and they have to go through this whole other process then I think that could be quite damaging.
However, think about the goal here, the goal is to provide tenants with a safe and reliable home where they can raise their families and if you think about it from that perspective, if you’ve got a landlord that letter tenant move into a home, raise their family and then tells them that they want to. They’ve got to get out because they want to sell it. That’s difficult for a tenant to come to cope with.
So you kind of got two sides battling and there are definite activists and groups that are fighting for the tenants. And there are definite activists and groups that are fighting for the landlord’s.
Me personally I kind of see both sides if I look at this purely from a property investor landlord perspective. I’m thinking ugh a bit more risk, bit more difficulty, few more pieces of legislation, a few more processes to follow. Difficult for me, I would be forced to reflect that in the financial element of the investment because it has to be profitable. Otherwise there’s no point in me, investing in property if it’s not profitable.
So that’s from the landlord property investor side. But from a tenant’s perspective, I also agree, we have to give, we’ve got a responsibility to give tenants a safe and secure home that they can live in and raise their families and they can call it home and their kids can go to the local schools and they can get to know the local neighbors and they can live there without worry that their landlords going to kick him out for any reason any time.
So I do agree with that and I think we as landlords whether this build comes into force or section 21’s are removed or whatever legislation happens. I think that if we set ourselves that target of number one, we have to be profitable and number two, we have to provide a reliable safe home for tenants. If we stick to those things then surely we can’t go too far wrong.
Anyway, as part of this reform, if you like I think that they’re going to introduce the concept of something called lifetime deposits, and I love this idea. However, I think there’s going to be some real teething issues, effectively, what a lifetime deposit is is a deposit that can transfer from property to property. Now, I assume that if there are deductions to be made from a deposit. Then the tenant will only have to top it up for the next property.
So if you’ve got a thousand pounds as a deposit on one property and then you move out to the next, but the first property has a 200 pounds deduction. You then only have to top up your next deposit to 200 pounds. That’s kind of the way it sits in my head. Now, there’s going to be a lot of differences from area to area, property to property, but this is what I mean, there’s going to be some teething issues.
I think the part of the lifetime deposit that they really need to get right is the disputes. It’s a very gray area at the moment and you get some landlords that just charge the 10 or whatever the hell they want for whatever they want to do to the property. And there are some tenants that don’t really know how to fight it.
So I think the dispute process needs to be fair. Definitely fair. Landlords and part of that is that landlords need to know categorically what they can charge for and what they can’t charge for. And if they are able to charge for something, how can they charge for that, for an example. If the tenant’s been in the property for three years and then when they leave that needs a new carpet, well, the tenant can’t be 100% responsible for the carpet because a carpet’s life is only 10 years for an example. Anyway, all of these things need to be clear and categoric so that a landlord can forecast the finances of that.
Part of the part of all of this reform as well is going to be around building safety, and this is going to be a huge one. I think this is probably going to be the area that landlords and property investors are going to have to really pay attention to the most. You have to pay attention to all of it but this is the one I think is going to be hit the hardest.
So the building safety bill is probably going to see us have a new governing body dedicated to building safety and there are going to be substantial reforms to building safety regulation, and we’ve already seen a load of that already and in my webinar the other day, which is my landlord legal update. We went through things like HHSRS, cladding and all those wonderful things. Tons and tons of legislation already in place around Building Safety. Well, there’s going to be a hell of a lot more as well.
So watch this space. I’ll try and keep you as posted and updated as I can. If you want, it’s probably a better thing actually if you subscribe for my webinars. Because that’s when I give you an up-to-date detailed analysis of all the legislation that’s affecting us as landlords, if you want to do that, by the way, just comment below here or send me a message, maybe or an email, Tom@Pinkstreet.CO.UK.
But yeah, so there’s lots of massive reforms I think that are going to come to play around building safety and building safety legislation. Because look, there’s loads of people right now. You might not be or your tenants might not be. But there’s loads of people around the country that are living in unsuitable, unsafe properties and I think that’s what’s going to get hit really hard and I agree with that. And I think if you’re a landlord watching this right now, then get ahead of this, get in front of this and have a look at your property. Are you, are you able to say categorically that it is one hundred percent safe and secure for your tenants.
If you have an element of doubt in your mind, speak to your letting agent or do, you know what actually give me a shout. I’ll put my team onto it and we will show you a HHSRS checklist, we’ll show you a property compliance checklist, a health checklist week. It’s like an MOT for your property to make sure that you’re legal, compliant, your tenant’s safe, you’ve covered all of the things that you need to do.
So if you want me to do that or you want me to send my team on to doing that, then let me know just email again, comment or whatever.
Anyway, the point I’m trying to get to is that we, as landlords need to make sure that those properties are definitely safe. Definitely secure because that is an area where the government are going to hit hard.
Another thing as well, by the way, if you’ve got a leasehold property, then I think the ground rents system is going to go. It’s a bit of an old-fashioned system anyway, but it’s going to get abolished. I do believe.
Now quick warning. I think that there are going to be other ways that freeholders are going to want to make that profit back up because ground rents a good profit for a lot of freeholders. And, you know, quite rightly as well. That’s what they’ve invested in you, only invest money to make profit, you don’t do it as a favor to anybody, but the point of this is to get rid of the really silly, ground rent clauses. I’ve seen some terrible clauses in my time.
The government are also going to modernize the planning system so that people can build more homes much easier. I don’t know if anybody tried to get planning for anything, let me know, a comment below if you’ve tried in any way, at any time to get planning permission what a pain. It’s ridiculous. You have to go through so many processes and go through so much red tape. It’s just so difficult to get through.
So personally this is a piece of good news. I think that if they improve the planning system and make it easier to get planning consent to build homes, then not only is that really good news for investors and developers.
I definitely will be taking advantage of that, but it’s also good news for people that want to buy property and rent property and get into their own home. Because there’s, you know, if you start doing things like increasing investors and developers ability to build homes, then you’re going to see more projects where people are building to rent and building to sell.
You’ll see more affordable, housing, more, social housing, and all of that must be a good thing because look let’s face it, anything that you can provide to investors that generate a profit for them is going to be good and as long as that in turn provides a good thing for tenants and homebuyers and all of that sort of stuff than that is a positive thing to. As long as it all stays non greedy, all clear, everybody knows exactly what they’ve got to do and when they’ve got to do it then I think this is a good thing.
So that’s roughly what I was taking from the Queen’s speech in terms of property investing, property developing, landlording, and from the the private rented sector. I think there’s going to be a lot of changes coming up over the next few years.
So again, comment below or send me an email Tom@Pinkstreet.CO.UK and I’ll send you invites to all of my webinars. My workshops and all of those things. So that we can try and keep you posted as best I can. They’re all free so you might as well take advantage of it.
Alright. I hope that helps and try to remember that your property is not your baby, it’s not your passion, it’s not your life, it’s not your dream, it’s not your financial freedom, it’s not anything. What your property is is a vehicle which is designed solely to make profit without you and provide you with a bit of security for your future but there’s no point making profit from property if you’ve got no time or energy or sanity to use it.
So I hope that helps. My name is Tom Soane and this is the Anonymous Landlord.