The Abolition of Section 21: What It Means for Landlords

With a new UK government, the first thing that Labour is talking about, and we know it’s happening is that they are going to abolish Section 21. The Conservative government before them talked about it, but it’s absolutely happening with Labour. 

We are going to hear more about this, so subscribe and get the latest information and alerts because we will be talking more about the abolition of Section 21 and how you can protect yourself from this.

The Impact on Evicting Problem Tenants

In simple terms, a freehold property means you own the building and the land it sits on outright. You’re in full control and can make changes to the property as you see fit (subject to planning laws).

On the other hand, a leasehold property means you own the building for a set number of years, but not the land it sits on. The land remains under the ownership of the freeholder (landlord), and you essentially have a long-term rental agreement with them.

Why Understanding the Difference Matters

So when Section 21 is abolished, we will still be able to evict problem tenants. But the reason that Section 21 is getting abolished, and I’m not giving a view on this, I’m just saying, is that they feel that landlords are using it as an excuse to get rid of people, or as revenge eviction. Many of us landlords know that’s not true, right? Because we actually use it to make it easier to remove tenants without assigning blame. We don’t want tenants to leave with blame. Unfortunately, in the future, the tenant is going to have to leave with blame, and the person that is going to hurt is the tenant.

But listen, for you as a landlord, you will still be able to evict a tenant. We just need to lobby the government to make them strengthen the court system. As long as the court system is still in place, we will still be able to evict antisocial tenants if we’re looking to sell our property or if we’re looking to back-to-brick refurbish our property and the tenant can’t stay in place.

Understanding the Proposed French-Style Hardship Test

There is something else and it’s really scary that they’re talking about it at the moment. It’s a French-style hardship test where if we, as landlords, try to make a tenant who’s not paying the rent leave, we might be in a situation right where we’ve got tenants in our property who have a hardship test, and we have to keep them in our property.

Now, I am going to assume that they would at least get housing benefit paid directly to the landlord, but we don’t know that that’s the case. Okay. What I’m going to say to you landlords, listen up here. If you have the sort of tenants that you’re having to evict because they’re not paying the rent, and I don’t mean the odd missed rent, I’m talking about serial offenders, then that’s down to you recruiting the wrong type of tenant. So you as a landlord are going to have to change how you do this, and we need to reference people. We need to know that they’ve paid their rent on time when they’ve been living in the building. This is really important because we are not registered charities. We are landlords. Our job is to provide safe and warm homes for people to live in. That’s what we do.

EPC Requirements: Preparing for 2030

Here comes my next point: EPCs. Now, EPCs to a C. That rule was in place, and then the Conservative government took it away. Labour is very likely in the next few months to bring that back so that we have to have an EPC with a C by 2030. In some instances, that’s not going to be possible, right? And there have to be some caveats around that, and we don’t know what they are now. But what I am going to say to you is if you are a landlord and you are refurbishing properties and you are not EPC to a C now, you’re crazy because it was always going to be a temporary reprieve.

Again, one of the things us landlords can do is potentially get rid of the stock that is not going to meet a C by 2030. And we do have time to do this, by the way.
 

Capital Gains Tax Changes: What Landlords Should Expect

The next thing is that I’m going to talk about Capital Gains Tax. I’m only going to talk about it briefly, but they are threatening to make you pay your tax rate for capital gains, which would be 20%, 40%, or 45% depending on what level of taxpayer you are. That’s at the moment, by the way. So if that happens, that is going to punish landlords even harder.

How Title Split Can Help You Navigate These Changes

We at Title Split are experts at helping landlords to split up their portfolios. Whether you own a freehold or a leasehold property, title splitting can unlock incredible financial gains. Imagine boosting your capital by 25-35% and increasing your cash flow by 60%—all through the strategic power of title splitting. Understanding how to leverage this approach is essential for maximising your property’s potential. Don’t miss out on this opportunity to transform your investments. Join our FREE Title Split webinar to discover how to get started and start profiting from your property today! We also have clients looking to buy those portfolios. So if you are looking to buy a portfolio, you’re going to get it right in the first place. And if you’re looking to sell a portfolio, also come and have both of you come talk to Title Split, or use our website to find more information. We’re going to be around to help landlords. But let me tell you now, things are changing. They are going to get more difficult. But this is still a lucrative strategy if we do things the right way.