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The rental sector shake-up: What it means for property investors

The rental sector shake-up: What it means for property investors

Recent calls to reform the rental sector have brought about the possibility of significant changes for property investors. While the government is still working out the details, the proposed reforms could impact how landlords manage their investments. In this blog post, Fabrik Property Group explores the potential ramifications of the proposed reforms and what it means for property investors.

Rental reform announcement

On 17 May 2023, the UK government introduced the Renters’ (Reform) Bill to Parliament, which aims to shake up the rental sector and provide more security for tenants. The Bill will abolish Section 21 ‘no fault’ evictions, empowering renters to challenge poor landlords without fear of losing their home. This means that landlords will have to provide a valid reason for eviction, and renters will have the opportunity to appeal if they feel they have been unfairly evicted.

However, the Bill is not just about protecting renters. It also aims to provide protection for the 2 million landlords in the UK by making it easier for them to recover their properties when needed. Notice periods will be reduced for tenants who are irresponsible, giving landlords more control over their properties.

The government has already made progress in increasing protections for tenants, including introducing Banning Orders and shielding tenants from excessive deposits and fees. The Renters’ (Reform) Bill will strengthen powers to evict anti-social tenants and will be introduced alongside reformed court processes and a new Ombudsman.

To help landlords and tenants navigate the rental market, a new digital Property Portal will be launched to help landlords understand their obligations and assist tenants when signing a new tenancy agreement.

Overall, the Renters’ (Reform) Bill is a step towards creating a fairer rental sector for all involved.

What is a no-fault eviction?

A no-fault eviction is a type of eviction that allows a landlord to evict a tenant without providing a specific reason. In the UK, this is done using a Section 21 notice, which informs the tenant that their tenancy will end after a certain date. Tenants have two months after receiving the notice to leave the property before their landlord can start the process via the court system in order to evict them.

However, rental reforms announced by the UK government will soon make this type of eviction a thing of the past. The Reform proposes that landlords can only evict tenants in certain circumstances, such as when they wish to offload the asset or to house a close family member. However, after three months, landlords will be able to put the property back on the lettings market.

This change is significant for property investors who may have previously relied on no-fault evictions to end tenancies quickly and easily. Landlords will now have to provide a valid reason for eviction and potentially wait for longer periods of time before repossessing their property. As a result, property investors may need to adjust their investment strategies and consider other options for managing their rental properties.

One potential solution is to opt for fully managed properties, where a professional property management company takes care of everything from finding and vetting tenants to dealing with repairs and maintenance. This can provide investors with more peace of mind and ensure that their rental properties comply with the new regulations.

How this affects property investors

The announcement of the rental sector shake-up has understandably left property investors concerned about the potential impact on their investments. Ben Beadle, chief executive of the National Residential Landlords Association, told BBC News that “more detail is needed if the bill is going to work as intended.”

One of the biggest concerns for landlords is the proposed ban on no-fault evictions. Landlords need assurance that they can repossess their properties quickly if they need to. The government has pledged to ensure that landlords can still recover their properties from anti-social tenants and those failing to pay rent.

Overall, while the rental sector shake-up may be aimed at improving conditions for tenants, however, property investors need to be assured that their investments are still protected.

Are fully managed properties the solution?

Investing in property can be lucrative, but navigating changes in rules and regulations across the rental market can also be challenging. A fully managed property could be the answer for investors looking for a straightforward way to invest in Buy-to-Let assets.

At Fabrik Property Group, we offer a range of fully managed properties that take the stress out of the rental market. Fully managed properties mean investors have a professional in place to source tenants and conduct relevant searches and keep on top of regulatory changes.

One of the benefits of investing in fully managed properties is rental assurance. With this, investors are paid whether their property is tenanted or not, giving you peace of mind during periods of downtime. This can be especially important in uncertain economic times or when unforeseen circumstances, like a pandemic, arise.

For renters and investors alike, Build to Rent properties provide a pipeline of high-quality and energy-efficient properties to the rental market. In addition, as these properties are often professionally managed, tenants benefit from speedy repairs, access to on-site amenities, and a higher standard of living overall.

The post The rental sector shake-up: What it means for property investors appeared first on Fabrik Invest.

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