Elderly man
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Labour's proposed reforms to end no-fault evictions aim to provide tenants with greater security and stability. However, landlords across the UK warn that the changes, combined with fears of increased taxes and rising costs, are driving them out of the rental market. Among those impacted is 75-year-old Alan Shields, a landlord who recently evicted his 90-year-old tenant of 18 years and sold his Hampshire property.

An Accidental Landlord's Journey

Alan Shields entered the buy-to-let market in 2002 under unexpected circumstances. "I became a landlord almost by accident," he explained. His neighbour was struggling to sell a bungalow, and Shields saw an opportunity to invest.

Initially, he planned to split the purchase with a business partner who already owned several rental properties, but the deal fell through. Shields ultimately bought the property outright for £164,000, investing a further £20,000 in renovations.

The property became a long-term investment, with a steady tenant who had lived there for nearly two decades. However, changes in government policy have forced Shields to rethink his position as a landlord.

The Eviction of a 90-Year-Old Tenant

After years of reliable rental payments but little property upkeep from the tenant, Shields and his wife decided to evict their tenant under Section 21 of the Housing Act 1988, which allows landlords to terminate a tenancy without providing a specific reason. Shields cited concerns over Labour's commitment to abolish Section 21 as a driving factor behind his decision.

"We looked at what Michael Gove was proposing when he was Secretary of State for Levelling Up, Housing and Communities, but we thought we would wait and see what happens with the election," Shields told The Telegraph. "However, the elimination of Section 21 worried us the most."

Although issuing the notice was difficult, Shields emphasised that he and his wife assisted their elderly tenant in finding alternative accommodation nearby.

Rising Taxes and Regulatory Burdens

Shields's concerns weren't limited to changes in eviction laws. The potential for increased capital gains tax under Labour's reforms also influenced his decision to sell the property. He had purchased the home for £164,000 and sold it for £425,000, resulting in a significant gain that would be subject to taxation.

"Speculation varied, but some expected capital gains tax rates to go as high as 45%," Shields noted. "Although Rachel Reeves didn't ultimately raise the tax on rental properties in the October Budget, the uncertainty made it feel not worth the effort anymore."

Shields's decision reflects a broader trend among UK landlords. According to the English Private Landlord Survey, nearly one-third of landlords are planning to sell some or all of their properties. Rising costs, reduced tax breaks, and increased regulation are pushing many out of the sector.

The Impact on Tenants

While landlords are exiting the market, the ripple effect is being felt most acutely by tenants. Data from the National Residential Landlords Association (NRLA) shows that the number of households in the private rental sector at risk of homelessness due to landlords selling up has risen significantly.

Between April and June 2024, over 7,000 households in England sought council assistance to prevent homelessness—a sharp increase from 5,400 households during the same period in 2023.

Ben Beadle, chief executive of the NRLA, highlighted the consequences for renters: "Right across the country, it is tenants who are suffering as landlords decide to sell up. No amount of changing the rules about when landlords can sell will address the chronic shortage of homes to meet demand."

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