October 27, 2025 • 25 mins
Host John Stepek and author of the Money Distilled newsletter is joined by Bloomberg reporter Helen Chandler-Wilde and Stuart Trow, author of “Young, Poor and Totally Screwed” to unpack one of the Labour government's key reforms; the Renters’ Rights Act.
The act, which has just received Royal Assent, aims to moderate rent increases, ban “no-fault” evictions, and end fixed-term tenancies. But without any meaningful supply side reforms, there are questions over how effective the new policy will be. Indeed, there are risks that it could do more harm than good, particularly to those already struggling to find accommodation, as tighter regulation and higher costs encourage more landlords to leave an already overly-tight market.
Read more: https://www.bloomberg.com/explainers/how-to-uk-landlord-new-renters-rights-bill?utm_source=website&utm_medium=share&utm_campaign=copy
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Hello, Meron talks Money listeners. Just before we get started
with today's episode and how things are changing for UK landlords,
I wanted to flag that we're hosting an event at
Bloomberg's European headquarters in London on Thursday, November twenty seventh.
Meron Talks the Budget. We're recording the show live in
front of an audience the morning after Rachel Reeves's UK Budget,
(00:28):
So join us for quas, songs and coffee and conversation.
Regular podcast guest Helen Thomas, the Blonde Money, who's one
of the smartest political commentators out there, certainly in my experience,
is going to be one of our guests, so you
won't want to miss it, So find a registration link
in the show notes. Welcome to Meron Talks Your Money,
(00:56):
the personal finance edition of Meron Talks Money, and these
bonus podcast we talk about the best strategies for making
the most of your money. I'm join Stepics, senior reporter
and Money Distilled author. Marton is currently still on holiday,
but fear not. Later this week will be bringing you
a conversation she had with the great Art Laugher economist,
author and the inventor of the Laugher curve. He's just
(01:17):
co authored a new book focused on revitalizing the UK economy,
so again you really won't want to miss that one.
Tune in later this week. But for this conversation, we're
focusing on the new rules of being a UK landlot.
So we're talking about the Renter's Right Spill, which was
introduced to Parliament last year and it's expected passing the
law before the end of this year. It represents the
(01:40):
most comprehensive overhaul of UK tendency rules in decades, where
it is proven to be quite controversial. So let's get
to watch change in how landlords will be affected with
my guest today as Helen Chandler Wilde, who's a Bloomberg
reporter who just published a really comprehensive take and all this.
And Stuart True, Bloomberg opinion columnist, host of Money and
(02:01):
Money on Switch Radio, an author of The Bluffers Gata Economics,
and he's also a landlock. So we've got first hand
experience today and now I'm going to start with you, Helen.
Can you talk us through the rentals rates built? Actually
is what the mean changes are.
Speaker 3 (02:19):
Sure, so it's pretty comprehensive and complex piece of legislation,
But one of the most important and most discussed things
is the end of no fault evictions. So basically that
means that once you've rented a property, your landlord can't
boot you out just because they want to have someone
else move in or something like that. The only reasons
that they can boot you out is if they themselves
(02:43):
want to move back into the property, if they want
to sell it, or if their family wants to move
back in. And another really massive change is the end
of fixed term tenancies. So at the moment, it's very
normal when you rent a property to rent on a
year long contract or a two year contract, but now
that will be ended. People do find those convenient, both
(03:03):
renters and landlords. So say, if you're moving and your
work has put you says you've got to move to
London for a year, you want to get a year tenancy,
but now it will just everyone will just be going
month to month, So basically your contract will last indefinitely,
but with a minimum at tenancy of twelve months at
the start, where the landlord can't ask you to leave
(03:25):
for any reason.
Speaker 2 (03:26):
And just to be cleveland that sort if that's rule
in month to month contracts, but that doesn't mean the
landlord can tell you leave the month exactly what the
month's notice does it because it's just detain and can
leave with a month's exactly.
Speaker 3 (03:40):
Yeah, the whole point of the bill is that it's
trying to shift power from landlords back onto tenants. So obviously,
anyone with who's read any slipper of news over the
last twenty years knows that houses are very expensive and
that is a massive problem in people's lives and the
intention of the bill is to try and help tenants.
So in London at the moment, if you want to
(04:01):
rent just one room in a sheard flat, the average
of that is one thousand pounds a month, and then
on top of that, obviously you have your counsel, tax,
all your bills and everything, so it's super expensive. And
on top of that, because of the housing shortages that
we have, landlords have a lot of power, so people
can be kicked out or their rent could be raised
on them with no notice, and you just don't really
have another option as a tenant. So they're trying to
(04:23):
address that by flipping the power over to the tenants
by saying that you can leave when it's convenient for you,
but the landlord can't kick you out. That's the intention
of the bill. However, I'm not entirely sure we can
discuss this if that is going to be the effect
of it, because lots of things we've seen throughout history.
Rent controls sound amazing, All those things sound amazing, but
(04:45):
when you're trying to manipulate and intervene in supply and
demand economics, you're probably not going to get the outcome
that you want.
Speaker 2 (04:54):
Because this is the other thing, isn't it If the
landlord changes the rent and you'd disagree with it as
it and you can take them to a tribunal. Is
that the story? And up until the tribunal decades up
the original.
Speaker 3 (05:08):
R yes and also land laws can only raise the
rent once a year from this time going forwards, and
so basically the rent increases can be looked at by
this tribunal system where they will be judged in accordance
with what rents are generally. And there's another change as
well that I didn't mention before about pricing, which is
that at present, when you go and in London. You
(05:30):
try and rent a flat and it's very stressful. You
go for a viewing, there's a million other people there,
and then afterwards it's more like what people might be
used to when they're buying somewhere where afters you get
into a bidding process, but you now do bids with
rents as well, so people will be bidding against each
other saying how much can I pay a month for this,
and so it will almost always go for above the
(05:52):
asking price, So that's now illegal as well. So you'll
basically just advertise the price of the flat and that's
the price you have to go for. Unfortunately, the problem
is that that hasn't addressed the fact that there's just
not enough supply for the demand that there is, so
land Words will still get loads of people wanting to
rent their place, so they will have to filter. If
(06:14):
you can't filter by price, you're going to filter buy
something else. This is an example for a friend of
mine who lived in Paris for many years, where they
have rent controls, she is extremely even harder than in
London to find a place to live. It's so hard
because the supply is effectively reduced and everyone is going
for these flats that are on the market. So the
(06:34):
filtering mechanism that the landlords use is they'll ask you
to supply your bank statements for years and years and
years into the past, because they basically want to find
the most reliable tenant that they can for their property,
who they can they're most sure will be able to
keep paying the rent and they won't default on them.
That unfortunately means that the richest people are still getting
(06:56):
the flats. It's just that you're basically giving rich people
a day on their rent. That is not what anyone
thought would happen when they introduce those policies. That is
not the intention of it, and that is like not
a good outcome for anyone except for the rich renters
who are now randomly getting a discount. So yeah, so
I'm just saying that that's another example of where what
(07:18):
you want to happen is not necessarily what will happen.
I completely understand it's so awful being a tenant because
there are so many people going after these flats and
so few flats. But if you're just trying to make
that transaction harder for people, it won't necessarily help anyone
(07:39):
in the long run. Or maybe it will help some people,
but they might be a minority. The fundamental issue is
we haven't built many flats, especially in London. The building
is just not happening.
Speaker 2 (07:49):
So yeah, have you currently inn?
Speaker 3 (07:53):
I actually own a flat which I bought a few
years ago, and I cannot tell you the difference in
my quality of life from getting out of the rental
market because I have had every form of crazy landlord
that there is. I've had damp issues. I had one
where admittedly we did scratch the lino a little bit
in the kitchen from moving the fridge, but it was
(08:15):
like two inches. She tried to charge us four grand
to fix that, which and the quote she gave us
was for replacing the flooring in the entire flat with
it had been liningo before. She wanted to replace it
with solid wood. And it's like we had to take
her to a tribunal target. That's just crazy, Like that's
not fair. So I have seen both sides of it,
(08:36):
and I'm very glad to be out of that now.
Speaker 2 (08:38):
Basically at this point, I'll.
Speaker 3 (08:44):
And that's not a dis against sture. I'm sure he's
a lovely, lovely landlord to be Cliff there are some
good ones.
Speaker 2 (08:52):
I do think this is a this is that she
hit a little because you're right. I mean, one of
the problems is that there is the economic issue, which
is don't like rent controls basically don't work. On the
other hand, there are so many horror stories on both sides,
like because landlords have awful tenants, but tenants have awful landlords.
(09:13):
I mean, I haven't rented for a long time, but
I remember even twenty years ago when I was renting,
it was an absolute minefield. It was Cowboysville. And to
be absolutely honest, in my experience, the worst people were
not actually the landlords. They were the people in between,
the sort of property agents. They kind of really dodgy, sleazy,
(09:34):
kind of like tenancy managers, things like that. And I
understand that that side of things has been tidy up
a little bit. But what what was your take on
this toure Because at the same time, you know, we
were talking about the end of Section twenty one tenancies here,
but so as I understand it, the idea the landlord
can't just kick you out even now you are what
(09:56):
is it a minimum is six months? There are sure
short old tenancies are right.
Speaker 1 (10:01):
Well, Under the old system, it was two months notice,
you know, so the once the fixed period the tenancy
had expired, the contract could be rolled over, so you
didn't have to have a new tenancy, which often agents
would insist on a new tenancy. You didn't actually have
to have that. You do what's called rolling over. Tenant
(10:22):
needs to give one month's notice, you'd need to give
two months notice. So that was the kind of old system.
And yeah, no, I mean, to be honest, I don't
really see too much problem with the ending of no
fault evictions per se, because I mean, basically, if we've
got a good tenant, we you know, we always say
to tenants moving in they're paying the rent and not
smashing the place up, we're happy for them to stay
(10:43):
as long as possible because we were committed to the
market in that sense. There are unintended consequences, you know,
such as ending fixed terms make it very difficult to
manage something like student accommodation where you kind of only
need it for a fixed term, and then if you
get one student who wants to stay, you know, but
(11:04):
that's not an area where we necessarily rent in any way.
But you know, these are that's an example of the
unintended consequences you get in terms of arbitration. You know,
I absolutely think that's a positive development as long as
it's resourced properly, because you know, one of the problems
is is that if tenants complaints aren't addressed, they effectively
(11:26):
become a story that confessed her. So you know, if
you've got a chance to put up or shut up,
you know, say, well the landlord did X, y Z,
and somebody who's in a position to know how the
market works, because they well, yeah, that's wrong. They shouldn't
be doing that and can make a ruling, that's great.
And likewise, if they're saying, look, this is frivolous, You've
you've not paid your rent for six months. You're just
(11:47):
sort of trying to that. You know that that's good
in terms of getting things out into the open. And
you know, there's a lot, there's a lot that I
wouldn't necessarily disagree with. What I'd say, though, is that
it you know, one of the fundamental problems that Helen
alluded to was that the kind of ship has sailed
in terms of whether being a landlord is a worthwhile
(12:11):
occupation anyway. You know, financially, you're not actually covering your
cost to capital. You know, even if you're all equity,
you've got an implied cost to capital, and you know
that has practical consequences. It means that when you have
to do any work to meet EPC regulations, or you know,
you're building new developments stuff like that, the easiest way
(12:32):
of funding that is by selling parts of your existing portfolio,
because that's the cheapest funding you're going to get. And
you know, from from my perspective as a landlord, that's
not what we're doing currently. But it means that as
properties become available, the best use of that capital that's
freed up is actually to pay down debt and then
exit the market, you know, because you can't justify reinvesting
(12:55):
capital to produce more capacity.
Speaker 2 (12:57):
This is sort of the cruct say, the issue at
the moment. It's like all of these regulations are being
introduced because of problems that arise from their not actually
being enough property where there needs to be. As I recall,
(13:32):
at least sort of landlord started to become public enemy
number one around about twenty fifteen, when George Osborne started
with the rules on getting rid of you could claim
mortgage interest payments against your your course of doing business,
and now you can't unless you incorporate. What was the
point of doing that, what was the goal basically, what
(13:56):
is the goal being behind trying to annihilate the amateur
landlord because that has been government policy for about a
decade now.
Speaker 1 (14:03):
Well, I think there are quite a few misconceptions about
how the property market actually works, and in particular, how
it affects people who can't access the owner occupied market.
So Helen was in a very fortunate position being able
to say, right, I don't like being a tenant. I'll
be a home owner instead, and that's great. And we're
(14:23):
seeing a lot of that from landlords. You know, landlord
sales have been absorbed, absorbed by first time buyers to
a certain extent, you know, so wealthier tenants are actually
probably it's wrong to say they're living their best lives
because rent is phenomenally expensive, but at least they've got
a reasonable amount of choice. That the crisis element comes
(14:43):
from the people displaced to small landlord's exit because small
landlords tend to occupy the cheaper end of the market.
I know, rents don't seem cheap, but relatively speaking, So
when you get displaced from that, you've got no place
to go. So that's why social in waiting lists over
a million. That's why I think the latest figure is
(15:04):
either one hundred and thirty two one hundred and thirty
four thousand families are in emergency accommodation, which is a
phenomenally expensive way of housing anybody. And you know, for
a further extreme is you know, obviously we've got tens
of thousands of people living on the streets, so it's
not for wealthier tenants that there's the problem. And in fact,
(15:25):
to be honest, the Rentes's Rights Bill will significantly strengthen
the situation for wealthy attendance, but it won't necessarily do
very much to address the emerging problem with people who
struggle to access the private rental market in the first place.
Speaker 3 (15:43):
And I think also on the historical point there you're
saying about those timelines after the financial crash, when interest
rates were effectively zero, property was actually a pretty attractive
investment because it was one place that you could still
get a return as property prices were going up and
everywhere else like you're chasing zero interest. So I kind
(16:05):
of have often wondered if that was like a compensatory
mechanism to force people to not pour so much of
their assets and wealth into the property market and like
look further returns elsewhere, because it was just like a
weird period of loads of distortions for wealth.
Speaker 1 (16:20):
Oh yeah, no, no, I mean extreme monetary easing brought
about all manner of misallocations of capital. But I think
one of the one of the other issues though, is that,
you know, the boom that preceded two thousand and eight
crash was largely driven by investors buying property of plan,
(16:42):
and that hasn't worked out very well because these are
the properties with the cleading issues. These are the properties
that built on slide planes. These are the properties that,
even for fairly benign reasons, appear to be unmortgagable and
hence unsaleable. So you know, to characterize vito let investing
is risk free is missing the point. You know, there
(17:03):
are hundreds of thousands, not millions, of properties in the
UK today that you can't raise a mortgage on that
you might have been able to do ten fifteen years ago.
Speaker 2 (17:12):
How much of this is London versus the rest of
the UK problem, I quite often look at house places,
and when you look at house spaces you kind of
realize that the real issue is mostly in the Southeast,
and that are parts of North England particularly that haven't
seen house places move since about two thousand in nominal
terms like alone real terms. So how much of this
(17:35):
is because all of the people who talk and write
about this stuff can of light live and within or
slightly without the M twenty five.
Speaker 3 (17:43):
I think that that was a reasonable argument to have
made a few years ago. But when I speaking to
people for the Peace, all of the landlords and stuff
I'm speaking to, they're saying that all the excitement now
zero excitement in London and Southeast. All the landlords are
looking at other areas because that is where you're still
getting a reasonable annual return on the investment of buying
(18:03):
the place compared to what the rent is, and also
where property prices are still going up. Because in London,
as you John her Britain about, property prices are just
not going up. And there are definitely like issues with
cowboy landlords everywhere. And a particular problem that we have
seen in regional places is where there have been these
(18:23):
massive growths of universities that puts a massive pressure on
the rental market because obviously then there's suddenly tens of
thousands of people who want to rent places and that
has pushed up rents in places and made it very difficult.
Like if you were living in Durham saying you want
to you're not a student and you want to rent somewhere,
you're competing against all of these people. Some students are
(18:46):
like international students with a lot of money, and that
obviously puts a lot of pressure on places.
Speaker 2 (18:52):
Is there any kind of solution to this? And always
stud you've letten a lot about the problem in like
them because at the moment, but he's built in the
anathing in London and presumably this just adds more reasons
not to do that, because basically the argument is that
you're not getting compensated with a yield or a return
(19:13):
that's conventioned it with the rescue you're taken, and more
regulation just increases the cost without you know, doing anything
about the kind of reton So, I mean, what is
the solution here, because you know, presumably it's not it's
not a deed regulation, is it? Is it planning rules?
Speaker 3 (19:30):
What is it?
Speaker 1 (19:31):
Well, it's a combination of things, but they you know,
basically investment has to pay at the end of the day.
Just working on a piece of the moment. The fundamental
issue is if your house owner or or you're looking
to buy a property at the moment, it's difficult to
see the sense of crisis in the market because you know,
there's plenty of supply around if you're looking to buy,
and if you're an owner, you know it takes taking
(19:54):
ever longer to sell because simply because there's a surplus
to start, you know. And the real problem is we
discus before, is that further down the value chain people
are finding it hard to access the private rental market.
So if you're if you're wealthy enough to be able
to rent, and then you know it's quite a high
hurdle to do that. Buy and large Renter's Rights Bill
(20:15):
will help you and although it's very expensive to do
so you can access the market. So people can't access
the market that are having the problem and are causing
a knock on cost for government and exchequer and all
the rest of it. And you know, and there's a
fundamental truism and I know people will argue against it,
but it's difficult to get away from it. You can't
have subsidized housing without the subsidy, and you know, the
(20:39):
way London has chosen to do that is to insist
that up to thirty five percent of the new development
is in mark for affordable housing. But the housing associations
that generally take that on board haven't got the finance
to even take up their share of that, which has
resulted in I don't know the exact number, but certainly thousands,
(20:59):
if not tens of thousands of completed new properties that
are standing empty simply because the housing association can't take
their you know, their mandated chair and the developers can't
free up enough capital to be able to move on
develop something else. So you know, so that's a fundamental problem.
But then also construction costs have gone through the roof,
you know, sort of if you've got to remediate for
(21:22):
environmental standards, which is great and you know, there's no
reason why that shouldn't be done, but one of the
anomalies is there's there's a very easy arbitrage. If you're
a landlord looking to sidestep the EPC regulations, well, you
simply sell your property because there are no EPC requirements
for owner occupied property, So you know it's worth your
(21:42):
flat is literally worth more in the owner occupied sector
than it is as a rental investment.
Speaker 2 (21:50):
Well, yes, that's I suppose if we bring it back
to the perstal finance say the things. I mean, I
think there's an obvious answer that that's what. But there's
no a good team to become a falster tame landlord.
Speaker 1 (22:06):
No, not really. I mean, you know, there's strategic reasons
why people might want to do that. If they were
if they wanted to say they were moving abroad to work,
they might want to keep a toe hold in the
UK market, So having renting out their property that you
know that can work. But in general as an investment,
you're not going to realize the returns. And you know,
(22:28):
I'm clearly the financial aspect is one thing, but also
you know, I'm very conscious of the landlord. The atmosphere
has been made extremely toxic.
Speaker 3 (22:37):
One last point I'd like to make is just in general,
when you're looking at policy announcements at the moment, I
would just be very very cautious about believing things as
they're written down, because one problem is that we just
don't have capacity in loads of public services, so things
like when they say, oh, don't worry, if you want
to return to your property, you can just give the
(22:58):
tenant notice and they will leave. That's actually very complicated
by the fact that there can be like in some places,
like a year long delayed to get bailiffs. So on paper,
sure that is the law, but in practice that may
not be the law. So and that happens just like
across the board with all policies at the moment that
absolutely basically nowhere is actually following the letter of the
(23:19):
law of what we're meant to be doing, because there's
just capacity issues everywhere.
Speaker 2 (23:23):
Yeah, it feels as if well you're read, there's this
also this gap between does the question if the regulations
will be right even if they were as advertised, But yeah,
there's the whole backlog everywhere. And I guess one of
the points people have been making is that economically rational thing,
if not the kind of moral thing for any tenant
(23:44):
to do, would always be to challenge any raise in
rent because it's going to take so long a clear
the backlock that they could still be paying their original
rent at the time they actually want to leave. First
time buyers any implications for them.
Speaker 3 (24:00):
I'm not sure, but it could be slightly preferable if
they're because often the places that are rented are those
smaller properties which first time buyer might also want to buy.
The problem is what their rental journey will have looked
like by the time they say for their deposit. If
this inadvertently makes it more difficult and more expensive, will
that make it harder to save for your deposit in
(24:21):
the first place. Who knows. We'll have to wait and see.
Speaker 2 (24:23):
Does it anything else either? You want to idently you
think we haven't covered.
Speaker 3 (24:27):
Well, we didn't get time to talk about EPCs and
the environmental certificates, but the rules and those are also
being tightened up, which is quite tricky in the UK
because we have a lot of old buildings and they
can be hard to make energy efficient. So that is
also a bit of a question. But you could read
my piece if you want to know more.
Speaker 2 (24:48):
I think yes, yeah, another expense. Yeah, well look, thanks
very much, but with you really appleased that you're coming
in who share your expertise to do? Thank you, Thanks John,
Thank you for listening to this week's Merton Talks Your Money.
(25:09):
If you like our show, rate review and subscriber if
you listen to podcasts, and also be sure to follow
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sw and I'm joined Underscore Steppeck. What are you guys
on Twitter?
Speaker 3 (25:23):
I am h on the Score, Chandler Wild with now
hyphen and I'm.
Speaker 1 (25:28):
At Benchman UK.
Speaker 2 (25:31):
This episode was produced by Summer, Sadi and Moses and
questions and comments on this show and all the shows
are always welcome. Our show email is Bren Money at
bloombird dot net and don't forget to check the show
notes for your early morning breakfast slot Thursday November twenty seventh,
where we'll be taking apart of the budget
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Hello, Meron talks Money listeners. Just before we get started
with today's episode and how things are changing for UK landlords,
I wanted to flag that we're hosting an event at
Bloomberg's European headquarters in London on Thursday, November twenty seventh.
Meron Talks the Budget. We're recording the show live in
front of an audience the morning after Rachel Reeves's UK Budget,
(00:28):
So join us for quas, songs and coffee and conversation.
Regular podcast guest Helen Thomas, the Blonde Money, who's one
of the smartest political commentators out there, certainly in my experience,
is going to be one of our guests, so you
won't want to miss it, So find a registration link
in the show notes. Welcome to Meron Talks Your Money,
(00:56):
the personal finance edition of Meron Talks Money, and these
bonus podcast we talk about the best strategies for making
the most of your money. I'm join Stepics, senior reporter
and Money Distilled author. Marton is currently still on holiday,
but fear not. Later this week will be bringing you
a conversation she had with the great Art Laugher economist,
author and the inventor of the Laugher curve. He's just
(01:17):
co authored a new book focused on revitalizing the UK economy,
so again you really won't want to miss that one.
Tune in later this week. But for this conversation, we're
focusing on the new rules of being a UK landlot.
So we're talking about the Renter's Right Spill, which was
introduced to Parliament last year and it's expected passing the
law before the end of this year. It represents the
(01:40):
most comprehensive overhaul of UK tendency rules in decades, where
it is proven to be quite controversial. So let's get
to watch change in how landlords will be affected with
my guest today as Helen Chandler Wilde, who's a Bloomberg
reporter who just published a really comprehensive take and all this.
And Stuart True, Bloomberg opinion columnist, host of Money and
(02:01):
Money on Switch Radio, an author of The Bluffers Gata Economics,
and he's also a landlock. So we've got first hand
experience today and now I'm going to start with you, Helen.
Can you talk us through the rentals rates built? Actually
is what the mean changes are.
Speaker 3 (02:19):
Sure, so it's pretty comprehensive and complex piece of legislation,
But one of the most important and most discussed things
is the end of no fault evictions. So basically that
means that once you've rented a property, your landlord can't
boot you out just because they want to have someone
else move in or something like that. The only reasons
that they can boot you out is if they themselves
(02:43):
want to move back into the property, if they want
to sell it, or if their family wants to move
back in. And another really massive change is the end
of fixed term tenancies. So at the moment, it's very
normal when you rent a property to rent on a
year long contract or a two year contract, but now
that will be ended. People do find those convenient, both
(03:03):
renters and landlords. So say, if you're moving and your
work has put you says you've got to move to
London for a year, you want to get a year tenancy,
but now it will just everyone will just be going
month to month, So basically your contract will last indefinitely,
but with a minimum at tenancy of twelve months at
the start, where the landlord can't ask you to leave
(03:25):
for any reason.
Speaker 2 (03:26):
And just to be cleveland that sort if that's rule
in month to month contracts, but that doesn't mean the
landlord can tell you leave the month exactly what the
month's notice does it because it's just detain and can
leave with a month's exactly.
Speaker 3 (03:40):
Yeah, the whole point of the bill is that it's
trying to shift power from landlords back onto tenants. So obviously,
anyone with who's read any slipper of news over the
last twenty years knows that houses are very expensive and
that is a massive problem in people's lives and the
intention of the bill is to try and help tenants.
So in London at the moment, if you want to
(04:01):
rent just one room in a sheard flat, the average
of that is one thousand pounds a month, and then
on top of that, obviously you have your counsel, tax,
all your bills and everything, so it's super expensive. And
on top of that, because of the housing shortages that
we have, landlords have a lot of power, so people
can be kicked out or their rent could be raised
on them with no notice, and you just don't really
have another option as a tenant. So they're trying to
(04:23):
address that by flipping the power over to the tenants
by saying that you can leave when it's convenient for you,
but the landlord can't kick you out. That's the intention
of the bill. However, I'm not entirely sure we can
discuss this if that is going to be the effect
of it, because lots of things we've seen throughout history.
Rent controls sound amazing, All those things sound amazing, but
(04:45):
when you're trying to manipulate and intervene in supply and
demand economics, you're probably not going to get the outcome
that you want.
Speaker 2 (04:54):
Because this is the other thing, isn't it If the
landlord changes the rent and you'd disagree with it as
it and you can take them to a tribunal. Is
that the story? And up until the tribunal decades up
the original.
Speaker 3 (05:08):
R yes and also land laws can only raise the
rent once a year from this time going forwards, and
so basically the rent increases can be looked at by
this tribunal system where they will be judged in accordance
with what rents are generally. And there's another change as
well that I didn't mention before about pricing, which is
that at present, when you go and in London. You
(05:30):
try and rent a flat and it's very stressful. You
go for a viewing, there's a million other people there,
and then afterwards it's more like what people might be
used to when they're buying somewhere where afters you get
into a bidding process, but you now do bids with
rents as well, so people will be bidding against each
other saying how much can I pay a month for this,
and so it will almost always go for above the
(05:52):
asking price, So that's now illegal as well. So you'll
basically just advertise the price of the flat and that's
the price you have to go for. Unfortunately, the problem
is that that hasn't addressed the fact that there's just
not enough supply for the demand that there is, so
land Words will still get loads of people wanting to
rent their place, so they will have to filter. If
(06:14):
you can't filter by price, you're going to filter buy
something else. This is an example for a friend of
mine who lived in Paris for many years, where they
have rent controls, she is extremely even harder than in
London to find a place to live. It's so hard
because the supply is effectively reduced and everyone is going
for these flats that are on the market. So the
(06:34):
filtering mechanism that the landlords use is they'll ask you
to supply your bank statements for years and years and
years into the past, because they basically want to find
the most reliable tenant that they can for their property,
who they can they're most sure will be able to
keep paying the rent and they won't default on them.
That unfortunately means that the richest people are still getting
(06:56):
the flats. It's just that you're basically giving rich people
a day on their rent. That is not what anyone
thought would happen when they introduce those policies. That is
not the intention of it, and that is like not
a good outcome for anyone except for the rich renters
who are now randomly getting a discount. So yeah, so
I'm just saying that that's another example of where what
(07:18):
you want to happen is not necessarily what will happen.
I completely understand it's so awful being a tenant because
there are so many people going after these flats and
so few flats. But if you're just trying to make
that transaction harder for people, it won't necessarily help anyone
(07:39):
in the long run. Or maybe it will help some people,
but they might be a minority. The fundamental issue is
we haven't built many flats, especially in London. The building
is just not happening.
Speaker 2 (07:49):
So yeah, have you currently inn?
Speaker 3 (07:53):
I actually own a flat which I bought a few
years ago, and I cannot tell you the difference in
my quality of life from getting out of the rental
market because I have had every form of crazy landlord
that there is. I've had damp issues. I had one
where admittedly we did scratch the lino a little bit
in the kitchen from moving the fridge, but it was
(08:15):
like two inches. She tried to charge us four grand
to fix that, which and the quote she gave us
was for replacing the flooring in the entire flat with
it had been liningo before. She wanted to replace it
with solid wood. And it's like we had to take
her to a tribunal target. That's just crazy, Like that's
not fair. So I have seen both sides of it,
(08:36):
and I'm very glad to be out of that now.
Speaker 2 (08:38):
Basically at this point, I'll.
Speaker 3 (08:44):
And that's not a dis against sture. I'm sure he's
a lovely, lovely landlord to be Cliff there are some
good ones.
Speaker 2 (08:52):
I do think this is a this is that she
hit a little because you're right. I mean, one of
the problems is that there is the economic issue, which
is don't like rent controls basically don't work. On the
other hand, there are so many horror stories on both sides,
like because landlords have awful tenants, but tenants have awful landlords.
(09:13):
I mean, I haven't rented for a long time, but
I remember even twenty years ago when I was renting,
it was an absolute minefield. It was Cowboysville. And to
be absolutely honest, in my experience, the worst people were
not actually the landlords. They were the people in between,
the sort of property agents. They kind of really dodgy, sleazy,
(09:34):
kind of like tenancy managers, things like that. And I
understand that that side of things has been tidy up
a little bit. But what what was your take on
this toure Because at the same time, you know, we
were talking about the end of Section twenty one tenancies here,
but so as I understand it, the idea the landlord
can't just kick you out even now you are what
(09:56):
is it a minimum is six months? There are sure
short old tenancies are right.
Speaker 1 (10:01):
Well, Under the old system, it was two months notice,
you know, so the once the fixed period the tenancy
had expired, the contract could be rolled over, so you
didn't have to have a new tenancy, which often agents
would insist on a new tenancy. You didn't actually have
to have that. You do what's called rolling over. Tenant
(10:22):
needs to give one month's notice, you'd need to give
two months notice. So that was the kind of old system.
And yeah, no, I mean, to be honest, I don't
really see too much problem with the ending of no
fault evictions per se, because I mean, basically, if we've
got a good tenant, we you know, we always say
to tenants moving in they're paying the rent and not
smashing the place up, we're happy for them to stay
(10:43):
as long as possible because we were committed to the
market in that sense. There are unintended consequences, you know,
such as ending fixed terms make it very difficult to
manage something like student accommodation where you kind of only
need it for a fixed term, and then if you
get one student who wants to stay, you know, but
(11:04):
that's not an area where we necessarily rent in any way.
But you know, these are that's an example of the
unintended consequences you get in terms of arbitration. You know,
I absolutely think that's a positive development as long as
it's resourced properly, because you know, one of the problems
is is that if tenants complaints aren't addressed, they effectively
(11:26):
become a story that confessed her. So you know, if
you've got a chance to put up or shut up,
you know, say, well the landlord did X, y Z,
and somebody who's in a position to know how the
market works, because they well, yeah, that's wrong. They shouldn't
be doing that and can make a ruling, that's great.
And likewise, if they're saying, look, this is frivolous, You've
you've not paid your rent for six months. You're just
(11:47):
sort of trying to that. You know that that's good
in terms of getting things out into the open. And
you know, there's a lot, there's a lot that I
wouldn't necessarily disagree with. What I'd say, though, is that
it you know, one of the fundamental problems that Helen
alluded to was that the kind of ship has sailed
in terms of whether being a landlord is a worthwhile
(12:11):
occupation anyway. You know, financially, you're not actually covering your
cost to capital. You know, even if you're all equity,
you've got an implied cost to capital, and you know
that has practical consequences. It means that when you have
to do any work to meet EPC regulations, or you know,
you're building new developments stuff like that, the easiest way
(12:32):
of funding that is by selling parts of your existing portfolio,
because that's the cheapest funding you're going to get. And
you know, from from my perspective as a landlord, that's
not what we're doing currently. But it means that as
properties become available, the best use of that capital that's
freed up is actually to pay down debt and then
exit the market, you know, because you can't justify reinvesting
(12:55):
capital to produce more capacity.
Speaker 2 (12:57):
This is sort of the cruct say, the issue at
the moment. It's like all of these regulations are being
introduced because of problems that arise from their not actually
being enough property where there needs to be. As I recall,
(13:32):
at least sort of landlord started to become public enemy
number one around about twenty fifteen, when George Osborne started
with the rules on getting rid of you could claim
mortgage interest payments against your your course of doing business,
and now you can't unless you incorporate. What was the
point of doing that, what was the goal basically, what
(13:56):
is the goal being behind trying to annihilate the amateur
landlord because that has been government policy for about a
decade now.
Speaker 1 (14:03):
Well, I think there are quite a few misconceptions about
how the property market actually works, and in particular, how
it affects people who can't access the owner occupied market.
So Helen was in a very fortunate position being able
to say, right, I don't like being a tenant. I'll
be a home owner instead, and that's great. And we're
(14:23):
seeing a lot of that from landlords. You know, landlord
sales have been absorbed, absorbed by first time buyers to
a certain extent, you know, so wealthier tenants are actually
probably it's wrong to say they're living their best lives
because rent is phenomenally expensive, but at least they've got
a reasonable amount of choice. That the crisis element comes
(14:43):
from the people displaced to small landlord's exit because small
landlords tend to occupy the cheaper end of the market.
I know, rents don't seem cheap, but relatively speaking, So
when you get displaced from that, you've got no place
to go. So that's why social in waiting lists over
a million. That's why I think the latest figure is
(15:04):
either one hundred and thirty two one hundred and thirty
four thousand families are in emergency accommodation, which is a
phenomenally expensive way of housing anybody. And you know, for
a further extreme is you know, obviously we've got tens
of thousands of people living on the streets, so it's
not for wealthier tenants that there's the problem. And in fact,
(15:25):
to be honest, the Rentes's Rights Bill will significantly strengthen
the situation for wealthy attendance, but it won't necessarily do
very much to address the emerging problem with people who
struggle to access the private rental market in the first place.
Speaker 3 (15:43):
And I think also on the historical point there you're
saying about those timelines after the financial crash, when interest
rates were effectively zero, property was actually a pretty attractive
investment because it was one place that you could still
get a return as property prices were going up and
everywhere else like you're chasing zero interest. So I kind
(16:05):
of have often wondered if that was like a compensatory
mechanism to force people to not pour so much of
their assets and wealth into the property market and like
look further returns elsewhere, because it was just like a
weird period of loads of distortions for wealth.
Speaker 1 (16:20):
Oh yeah, no, no, I mean extreme monetary easing brought
about all manner of misallocations of capital. But I think
one of the one of the other issues though, is that,
you know, the boom that preceded two thousand and eight
crash was largely driven by investors buying property of plan,
(16:42):
and that hasn't worked out very well because these are
the properties with the cleading issues. These are the properties
that built on slide planes. These are the properties that,
even for fairly benign reasons, appear to be unmortgagable and
hence unsaleable. So you know, to characterize vito let investing
is risk free is missing the point. You know, there
(17:03):
are hundreds of thousands, not millions, of properties in the
UK today that you can't raise a mortgage on that
you might have been able to do ten fifteen years ago.
Speaker 2 (17:12):
How much of this is London versus the rest of
the UK problem, I quite often look at house places,
and when you look at house spaces you kind of
realize that the real issue is mostly in the Southeast,
and that are parts of North England particularly that haven't
seen house places move since about two thousand in nominal
terms like alone real terms. So how much of this
(17:35):
is because all of the people who talk and write
about this stuff can of light live and within or
slightly without the M twenty five.
Speaker 3 (17:43):
I think that that was a reasonable argument to have
made a few years ago. But when I speaking to
people for the Peace, all of the landlords and stuff
I'm speaking to, they're saying that all the excitement now
zero excitement in London and Southeast. All the landlords are
looking at other areas because that is where you're still
getting a reasonable annual return on the investment of buying
(18:03):
the place compared to what the rent is, and also
where property prices are still going up. Because in London,
as you John her Britain about, property prices are just
not going up. And there are definitely like issues with
cowboy landlords everywhere. And a particular problem that we have
seen in regional places is where there have been these
(18:23):
massive growths of universities that puts a massive pressure on
the rental market because obviously then there's suddenly tens of
thousands of people who want to rent places and that
has pushed up rents in places and made it very difficult.
Like if you were living in Durham saying you want
to you're not a student and you want to rent somewhere,
you're competing against all of these people. Some students are
(18:46):
like international students with a lot of money, and that
obviously puts a lot of pressure on places.
Speaker 2 (18:52):
Is there any kind of solution to this? And always
stud you've letten a lot about the problem in like
them because at the moment, but he's built in the
anathing in London and presumably this just adds more reasons
not to do that, because basically the argument is that
you're not getting compensated with a yield or a return
(19:13):
that's conventioned it with the rescue you're taken, and more
regulation just increases the cost without you know, doing anything
about the kind of reton So, I mean, what is
the solution here, because you know, presumably it's not it's
not a deed regulation, is it? Is it planning rules?
Speaker 3 (19:30):
What is it?
Speaker 1 (19:31):
Well, it's a combination of things, but they you know,
basically investment has to pay at the end of the day.
Just working on a piece of the moment. The fundamental
issue is if your house owner or or you're looking
to buy a property at the moment, it's difficult to
see the sense of crisis in the market because you know,
there's plenty of supply around if you're looking to buy,
and if you're an owner, you know it takes taking
(19:54):
ever longer to sell because simply because there's a surplus
to start, you know. And the real problem is we
discus before, is that further down the value chain people
are finding it hard to access the private rental market.
So if you're if you're wealthy enough to be able
to rent, and then you know it's quite a high
hurdle to do that. Buy and large Renter's Rights Bill
(20:15):
will help you and although it's very expensive to do
so you can access the market. So people can't access
the market that are having the problem and are causing
a knock on cost for government and exchequer and all
the rest of it. And you know, and there's a
fundamental truism and I know people will argue against it,
but it's difficult to get away from it. You can't
have subsidized housing without the subsidy, and you know, the
(20:39):
way London has chosen to do that is to insist
that up to thirty five percent of the new development
is in mark for affordable housing. But the housing associations
that generally take that on board haven't got the finance
to even take up their share of that, which has
resulted in I don't know the exact number, but certainly thousands,
(20:59):
if not tens of thousands of completed new properties that
are standing empty simply because the housing association can't take
their you know, their mandated chair and the developers can't
free up enough capital to be able to move on
develop something else. So you know, so that's a fundamental problem.
But then also construction costs have gone through the roof,
you know, sort of if you've got to remediate for
(21:22):
environmental standards, which is great and you know, there's no
reason why that shouldn't be done, but one of the
anomalies is there's there's a very easy arbitrage. If you're
a landlord looking to sidestep the EPC regulations, well, you
simply sell your property because there are no EPC requirements
for owner occupied property, So you know it's worth your
(21:42):
flat is literally worth more in the owner occupied sector
than it is as a rental investment.
Speaker 2 (21:50):
Well, yes, that's I suppose if we bring it back
to the perstal finance say the things. I mean, I
think there's an obvious answer that that's what. But there's
no a good team to become a falster tame landlord.
Speaker 1 (22:06):
No, not really. I mean, you know, there's strategic reasons
why people might want to do that. If they were
if they wanted to say they were moving abroad to work,
they might want to keep a toe hold in the
UK market, So having renting out their property that you
know that can work. But in general as an investment,
you're not going to realize the returns. And you know,
(22:28):
I'm clearly the financial aspect is one thing, but also
you know, I'm very conscious of the landlord. The atmosphere
has been made extremely toxic.
Speaker 3 (22:37):
One last point I'd like to make is just in general,
when you're looking at policy announcements at the moment, I
would just be very very cautious about believing things as
they're written down, because one problem is that we just
don't have capacity in loads of public services, so things
like when they say, oh, don't worry, if you want
to return to your property, you can just give the
(22:58):
tenant notice and they will leave. That's actually very complicated
by the fact that there can be like in some places,
like a year long delayed to get bailiffs. So on paper,
sure that is the law, but in practice that may
not be the law. So and that happens just like
across the board with all policies at the moment that
absolutely basically nowhere is actually following the letter of the
(23:19):
law of what we're meant to be doing, because there's
just capacity issues everywhere.
Speaker 2 (23:23):
Yeah, it feels as if well you're read, there's this
also this gap between does the question if the regulations
will be right even if they were as advertised, But yeah,
there's the whole backlog everywhere. And I guess one of
the points people have been making is that economically rational thing,
if not the kind of moral thing for any tenant
(23:44):
to do, would always be to challenge any raise in
rent because it's going to take so long a clear
the backlock that they could still be paying their original
rent at the time they actually want to leave. First
time buyers any implications for them.
Speaker 3 (24:00):
I'm not sure, but it could be slightly preferable if
they're because often the places that are rented are those
smaller properties which first time buyer might also want to buy.
The problem is what their rental journey will have looked
like by the time they say for their deposit. If
this inadvertently makes it more difficult and more expensive, will
that make it harder to save for your deposit in
(24:21):
the first place. Who knows. We'll have to wait and see.
Speaker 2 (24:23):
Does it anything else either? You want to idently you
think we haven't covered.
Speaker 3 (24:27):
Well, we didn't get time to talk about EPCs and
the environmental certificates, but the rules and those are also
being tightened up, which is quite tricky in the UK
because we have a lot of old buildings and they
can be hard to make energy efficient. So that is
also a bit of a question. But you could read
my piece if you want to know more.
Speaker 2 (24:48):
I think yes, yeah, another expense. Yeah, well look, thanks
very much, but with you really appleased that you're coming
in who share your expertise to do? Thank you, Thanks John,
Thank you for listening to this week's Merton Talks Your Money.
(25:09):
If you like our show, rate review and subscriber if
you listen to podcasts, and also be sure to follow
me and Meren on x slash Twitter. Merton's at merin
sw and I'm joined Underscore Steppeck. What are you guys
on Twitter?
Speaker 3 (25:23):
I am h on the Score, Chandler Wild with now
hyphen and I'm.
Speaker 1 (25:28):
At Benchman UK.
Speaker 2 (25:31):
This episode was produced by Summer, Sadi and Moses and
questions and comments on this show and all the shows
are always welcome. Our show email is Bren Money at
bloombird dot net and don't forget to check the show
notes for your early morning breakfast slot Thursday November twenty seventh,
where we'll be taking apart of the budget
Host
Merryn Somerset Webb
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