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Government deliver ‘new deal’ for renters

Back in November 21 we reviewed the potential implications of the reversion back to standard procedures for Section 21 and Section 8 notices following the pandemic.

We commented at the time that no one wanted to see Section 21 notices used to simply drive-up no-fault evictions and coming round the corner was the proposed Government white paper on the banning of no fault evictions.

At the time a Government spokesman commented,

We remain committed to delivering a fairer private rented sector – this includes ending the practice of no-fault evictions.”

We will continue to engage constructively with stakeholders across the sector as we develop proposals.”

At Open Property Group we hoped that this delay would allow for the Government to produce a set of proposals that provided reforms that work for both tenant and landlord.

The Government white paper is now with us and its time to see if the opportunity has been grasped, the waiting is over….

Presented to Parliament by the Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations, the Secretary of State commented that,

Everyone has a right to a decent home. No one should be condemned to live in properties that are inadequately heated, unsafe, or unhealthy. Yet more than 2.8 million of our fellow citizens are paying to live in homes that are not fit for the 21st Century. Tackling this is critical to our mission to level up the country”.

It’s a bold and challenging statement, the question is do the proposals facilitate this and allow the necessary moves to take place that will provide the stable/honest and trustworthy market we are looking for? A market where renters do not have to live in substandard homes, are powerless to do anything about it and have the threat of sudden eviction hanging over them.

Renters Reform Bill

So, what is the Renters Reform Bill and would it deliver that support?

The Bill looks to provide a fairer marketplace for renters, to give scope to improve conditions and give them more rights under law. The purpose of the Bill is to give tenants more protection with the focus being on:

  • A ban on Section 21 ‘no fault’ evictions, this protects tenants from dishonest landlords while strengthening landlords’ legitimate grounds for taking back their property.
  • A single system of periodic tenancies so tenants can move more easily if their circumstances change or leave poor quality homes without rent liability.
  • A doubling of rent increase notice periods so tenants have longer to challenge if unjustified.
  • Outlawing 'blanket bans' by landlords or agents on renting to people receiving benefits or families with children.
  • Landlords can't “unreasonably refuse” tenants having a pet in the home.
  • The extension of the Decent Homes Standard giving all renters the legal right to a safe and warm home.
  • Creation of a Private Renters’ Ombudsman to settle disputes between private renters and landlords at low cost and without going to court.
  • A property portal to help landlords understand their obligations and provide information to tenants/

Like the NRLA (National Residential Landlords Association) Open Property Group, support most of these initiatives.

For too long our sector has been dogged by the images and negative press created by rogue landlords charging excessive rents for substandard properties, any action taken to improve the standards for renters, whilst also protecting landlords must be a good thing.

It’s good for the landlords who want a trouble-free rent period and the renter who wants the confidence of knowing they are legally supported if things go wrong.

As with any new legislation there is always some potential negative implications.

What can landlords expect?

But what if the landlord genuinely needs the property back, not because the tenant is at fault?

In these situations, landlords will have to revert upon Section 8 and prove to the courts they need the property back. The question is, will this deter the smaller landlords from carrying on? Landlords will know that there are times when you need to raise equity, sell underperforming assets, or raise retirement funds, therefore stronger grounds for Section 8 are paramount.

Worried about how they remove tenants, smaller landlords could look to exit the sector, ultimately pushing more rental properties onto the ‘For Sale’ market, or moving rental properties into the hands of larger organisations, reducing the number of private landlords and creating monopolies in the market. Only time will tell.

We do have to remember that this is currently only a white paper. So, what comes next? At Open Property Group we will continue to monitor feedback from the industry and try and judge which way the winds of change are blowing.

Paul Shamplina of Landlord action commented

The whole point of the White Paper for The Renters Reform Bill is so that tenants live in safer homes, as it’s stated that 21% of properties in the PRS, fall below the Decent Homes Standard, as well as offering tenants greater security. Let’s remember these are proposals and they have to go through parliament to become a law, at present the Government have got bigger problems. I still have my reservations on the provisions that have to be in place, before Section 21 is being abolished. Landlords need confidence in the Court System to gain possession of their properties back. Furthermore, we have to see how the Periodic Tenancies work especially with Student lets. I do say to landlords do not panic, landlords are adaptable and resolute, the devil is in the detail. Our stake holders here at Hamilton Fraser are always engaging with Government, advising on what is happening on the ground.

We support any initiative that improves our sector, for landlords and tenants, this white paper marks a real step change in the way the Government wants to see our market operate, and we welcome it.

Will it all pass into law? Inevitably not, there are some ambitious plans in these proposals, some of which will possibly fall by the wayside.

What is important, and we support completely, is the desire to implement change, the objective of improving and transitioning to a fairer tenancy system for both tenant and landlord. Something we in the industry all want to see.

Published on 6th July 2022

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