By Following news that the Welsh housing minister Julie James AM has proposed that the notice period on Section 21 or no-fault eviction notices should be extended in Wales, the Residential Landlords Association (RLA) has released criticism in a recent statement.
The proposed changes relate to Sections 173 and 174 of the Renting Homes (Wales) Act 2016, known as the Welsh equivalent of Section 21. Under existing law, landlords are unable to repossess a property during the first six months of a tenancy. Following this, at present, landlords must also give two months’ notice, meaning a potential eight-month wait until they can repossess, provided they are successful.
New proposals to extend this notice period, from two months to six, would have the effect of rendering landlords unable to repossess for at least a year into a tenancy. Ms James explained that the proposals for extending no-fault notice were required, in order to improve security of tenure for all tenants.
Shift in policy
The Welsh Government’s proposals were announced when Welsh housing minister Julie James AM addressed the Shelter Cymru conference in Swansea last week. This followed First Minister Mark Drakeford having signed a pledge to end no-fault evictions being used by Welsh landlords back in April.
Such a move would bring Wales in-line with England, after the UK government announced that they intended to scrap Section 21 eviction notices in England. Critics of scrapping Section 21 altogether often warn that such a move could result in indefinite tenancies.
Proposals for scrapping no-fault eviction notices entirely seem to have been put on hold, in favour of focusing on notice period extension, as the Welsh Government admitted facing legislative timetable constraints. Ms James explained that they did not wish to delay the introduction of new occupation contracts any further.
Risk of damaging confidence
The RLA criticised the Welsh Government’s proposals for extending the notice period, warning that it would effectively create 12-month contracts by default.
Douglas Haig, RLA vice-chair and director for Wales, explained: “Creating a situation where a property cannot be repossessed within the first six months and then introducing a further six-month notice period could cause huge problems for landlords.”
Mr Haig explained: “They will be left powerless when it comes to problem tenants, who will be legally allowed to stay in the property for a year. If tenants are not paying rent, huge arrears could build up in this time. We will be warning the Government that this move could cause serious damage to landlord confidence and the availability of homes to rent in Wales, at a time when demand continues to increase.”
As a final request, Mr Haig added: “The Government needs to ensure that landlords with a genuine need to gain possession are able to do so.”
The Welsh Government announced plans for a consultation on its proposals in the coming months.
Absolutely barmy.
There is no way I would bother investing in Welsh rental property if they introduce this extra 6 month notice.
If I was a Welsh LL I would be selling up.
No way could I afford the business risk of a rent defaulting tenant being able to remain for a year.
Though not sure if S8 could still be used with all the obvious attendant costs for using S8 to obtain possession.
I am so glad I am not a Scottish or Welsh LL as I would be selling up.
It simply is unviable in these countries.
I don’t know how LL from these countries carry the business risk.
I certainly couldn’t afford to do so.
Absolutely ridiculous. As a landlord I could not afford the mortgage if my tenants defaulted on 12 months rent. I think I would sell up all my properties if this happened in England.
I’ve sold up already.
Most of my past tenants paid on time and kept the property in good condition. There would be no reason to ask tenants to leave unless they refused to pay rent or keep the property in reasonable condition.
If, however, a landlord gets a bad tenant – and there are a few of them out there that know how to play the game and are spiteful to boot – it will cause them problems both financially and emotionally.
I was a good landlord. I fixed everything within 24 hours of a report and made the effort to build a rapport with my tenants. If there were financial hitches their side they were happy to discuss with me so were resolved quickly.
The landlord owning a property opposite was not so lucky. The tenants had excellent references due to their previous landlord being blackmailed to give them as he wanted them out. Game players that ended up living rent-free for 9 months and left leaving the property stripped and vandalised. He had to sell up as he could no longer afford the mortgage or repairs. Worse, he started suffering ill-health through stress.
The pendulum is swinging way too far against the landlord. Time to get out unless you have deep pockets, a good legal team and a cast iron mental constitution.
Yep it certainly seems that for those LL with mortgages it is time to get out of the PRS.
The risks are now too much
I am surprised at the numbers of LL who are selling up.
This is imperceptible in the market but at some point it will become very noticeable that there are substantially fewer rental properties.
But of course by then it will be too late.
This is what had happened in Ireland.
After the Irish S24 version it took about 2 years of LL selling up for the Irish Govt to realise that many LL had gone resulting in a homelessness crisis.
It seems until the Govt has the reality of a far smaller PRS staring them in the face Govt will refuse to accept their bonkers policies have caused LL to leave.
Most LL can exit fairly comfortably.
The problem with this is that this leaves the tenants behind homeless.
They need LL to be LL.
Without them who will house the homeless tenants!?