Page 10 - Bridging & Commercial Magazine Issue 5
P. 10

 The cut          Francesca Carlesi Co-founder and CEO at Molo Finance It’s a waiting game to know its eventual impact. It’s right that the tenant-landlord relationship should be mutually beneficial— with the former being a good income earner for landlords and the latter providing tenants with a stable, quality and safe home. Protecting tenants’ rights is good for long-term economic health, especially as ‘generation rent’ expands. Lenders also benefit from this as, ultimately, money backing buy-to-let mortgages originates from renters. That said, many landlords are wary, particularly smaller players who’ve really felt the impact of the last few years of change. If supply of quality rental accommodation falls due to red tape, then rents could increase—not a good outcome for prospective tenants either. It will boil down to the government’s ability to reassure both landlords and lenders that strengthening the grounds within Section 8 and improving efficiency of court processes will cover landlords’ right to repossess their property in recognised instances of need. Gareth Tucker Mortgage adviser at Pure Commercial Finance While the new guidelines are not yet known, the government’s proposal to remove assured shorthold tenancies (ASTs) means that it’s likely that assured tenancies will soon be the only option available to landlords. The potential impact includes possible court cases relating to reasons for evictions, longer eviction notice periods and extended late rent payment deadlines. It’s safe to say that lenders will surely be watching this particular scenario with interest, and some may even decide that the buy-to-let market is no longer something they wish to get involved in; it will almost certainly make landlords more nervous about letting their property out to low-income tenants or those who rely on government support to pay their rent. The abolition of Section 21 is clearly designed to offer more security for renters, but will almost certainly make landlords less confident when looking for a new tenant. This may result in higher bonds and increased rents, making it harder for the more vulnerable to obtain a decent rental property. Only time will tell who will benefit most from the new proposals. David Cox Chief executive officer at ARLA Propertymark \[It\] could be devastating for the private rented sector and landlords operating within it. The effects of the tenant fees’ ban are just starting to be felt, and the government suggests introducing more new legislation which could deter landlords from operating in the market. Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has no choice but to take action and evict tenants from a property. Until we have greater clarity on the changes planned for Section 8, the abolition of Section 21 will only increase pressure on the sector and discourage new landlords from investing in buy-to- let properties. This comes at a time when demand is dramatically outpacing supply and rent costs are rising.     8  Bridging & Commercial 

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