Section 21 Abolition Will Reduce Housing Supply
A law firm says the Renters Reform Bill is driving buy to let investors to quit because of their fears over Section 21 abolition.
Bishop & Sewell LLP says it’s seen a significant rise in enquiries from landlords seeking to sell.
Charlie Davidson, senior associate with Bishop & Sewell’s Residential Property team, says: “The proposed Bill promises to be the biggest shake up to the private rental sector for a generation, bringing in new laws to protect renters from no fault evictions to ensure a better deal for renters.
“However, the Section 21 abolition are causing landlords particular concern, as they will face additional obstacles to removing tenants when they come to selling the property.”
Davidson continues: “Many landlords oppose the Bill and, when coupled with the impact of higher mortgage costs and soaring energy bills, buy to let landlords in particular are considering exiting the market in their droves.
“This could inadvertently reduce the supply of rental properties and increase costs for renters, which is far from the Government’s intention.
“Meanwhile, mortgage lenders prefer it if landlords can readily regain possession of their properties, so any reforms that reduce landlords’ flexibility and freedom to recover capital could dampen their willingness to lend.
“It’s fair to say the buy to let market faces some significant challenges, including proposed renter reforms, the Building Safety Act and rising mortgage and energy costs.
“The danger is that the very reforms designed to help renters end up squeezing out investors from the buy to let market, with all the potential for disruption to supply and rents that could bring.”