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How can the Government fix Buy-To-Let?

View profile for Gina Peters
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How can the Government fix Buy-To-Let?

With Gove’s recent announcement that Section 21 notices will be “outlawed” before the next general election, and rumours the election date will be brought forward, many in the buy-to-let market are frustrated with the lack of support provided for landlords, with virtually no resolutions announced.

Gina Peters, Head of Landlord & Tenant at Dutton Gregory Solicitors, has previously discussed the lack of support for landlords, and if the Government is not careful, we could risk seeing a mass sell up of rental properties, causing a drastic shortage in the market. The imposing threat of Section 21 being abolished has sent the buy-to-let market into a frenzy, with a surge in landlords serving no-fault eviction notices and selling up, before the abolishment comes into effect.

Many have questioned the Government’s commitment to the abolishment, due to it being continually delayed. The National Residential Landlords Association has also supported the notion that the ban could not be enacted until the court system had been improved, as it would cause increased delays and backlog of served Section 21 notices in a judicial system that is already under enormous pressure and where long delays are the norm

Gina Peters, Head of Landlord & Tenant at Dutton Gregory Solicitors, said: “The Government's actions and lack of solutions in the last year has quite frankly left the rental industry in limbo that has led to landlords simply getting out. There are many things that should be announced that can help buy-to-let landlords and provide peace of mind, however Michael Gove has yet to provide any resolutions.

“We have seen some stability more recently in the market, which is positive, potentially due to the delays Gove had implemented with Section 21, and the various readings of it needing to go through Parliament, though more likely due to the steadying and lowering of interest rates. However, with his recent announcement and the fact he wants to prevent landlords from abusing the notice, it will incite more action to exit the lettings market.

“What the government does not seem to grasp, possibly being swayed by constant lobbying from tenant supporting charities and organisations, is how outrageous it is for a landlord to use a mechanism that enables them to get their property back. The majority of landlords do not abuse Section 21, and only use it where appropriate. The whole point of buy-to-let is to get a return on investment so landlords want a tenant in their property. Removing the ability for landlords to use the notice will have an adverse effect.  Landlords will simply fear they have very little authority over their property, therefore making them less likely to stay in the buy-to-let market.

“With the upcoming Spring Budget, the Government can do many things to put buy-to-let landlords at ease. First, they should reintroduce a reduction on Stamp Duty on second properties purchased to let out, to make it more viable for landlords to have bigger property portfolios. Secondly, to bring back some sort of mortgage relief. With the younger generation unable to afford to buy a property, we need to make it easier for landlords to stay in the buy-to-let market as their importance in this key area of the economy has increased enormously.

“To tackle the exceeding demand of rental properties, the Government also needs to incentivise getting out of the rental market and provide first time buyers with something similar to Help To Buy. If there wasn’t such a demand, then we wouldn’t be in the current housing crisis we are facing, and the pending abolishment of Section 21 wouldn’t have  such a big impact.”

Gina Peters, Head of the Landlord and Tenant department at Dutton Gregory, has specialised in residential landlord and tenant law for 22 years. She has advised clients through the Landlord and Tenant Act 1985, the Housing Act 1988 and 1996, and the Deregulation Act 2015 – and now the 2023 Renters Reform Bill. Gina is also the author of the award-nominated book: ‘Lettings Law for Property Professionals: Your Legal Questions Answered’, which provides a firm basis and reference for many regularly asked about legal topics.

Hampshire-headquartered Dutton Gregory Solicitors is a full-service national legal firm for private and corporate clients. The multi-award-winning practice has offices in Bournemouth, Chandler’s Ford, Poole, Liverpool, London, Winchester, and Woking.