May 2023 - RENTERS' REFORM BILL DELAYED
The government has back-tracked on its decision to publish the long-awaited Renters Reform Bill this week. It has been reported that “procedural issues” have been blamed for the delay in introducing the Bill to Parliament.
Michael Gove had previously confirmed to the National Residential Landlord Association that the long-awaited Renters' Reform Bill would be introduced to Parliament following the King's Coronation, week commencing 8 May 2023, promising the biggest shake-up in the private rented sector for over 30 years. This has now been delayed.
The Renters' Reform Bill proposals were outlined in its ‘A Fairer Private Rented Sector’ white paper, released in June 2022. It is not yet law but here's an overview of what's expected to be introduced subject to Parliamentary discussions on the Bill.
The White Paper: An overview
Periodic tenancies to become standard –
All tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy for a set period will be moved onto a single system of periodic tenancies.
Tenants will need to provide two months’ notice when leaving a tenancy, to "ensure landlords can recoup the costs of finding a tenant and avoid lengthy void periods" and tenants will not be tied in to new long term agreements.
Landlords will still be able to evict a tenant with reasonable circumstances, such as serious rent arrears, anti-social behaviour or the need to sell their property which will all be defined in law.
Section 21 "no fault" evictions likely to be abolished -
Section 21 will therefore be abolished, so that landlords will only be able to evict a tenant in ‘reasonable circumstances’.
The government will, however, also reform the grounds of possession under section 8 so that they are "comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property".
A new mandatory ground for repeated serious arrears, making eviction mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at hearing.
A new ground will be introduced for landlords who wish to sell their property and allow landlords and their family members to move into a rental property.
Notice periods for rent increases to be doubled -
In a move to combat the cost of living crisis, rent increases will be limited to once per year and the minimum notice landlords must provide of any change in rent will be increased to two months.
Minimum housing standards to be introduced -
Minimum housing standards for the private rented sector (PRS) will be introduced by widening the application of the Decent Homes Standard, which currently only applies to the social housing sector.
Tenants given more rights to keep pets in properties -
The government will legislate to ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision. At the same time, the government will amend the Tenant Fees Act 2019 to include pet insurance as a permitted payment. This means landlords will be able to require pet insurance, so that any damage to their property is covered.
Bans on renting to families with children or those on benefits may be outlawed
A new Ombudsman covering all private landlords -
A single government-approved ombudsman covering all private landlords who rent out property in England - regardless of whether they use a letting agent - will be introduced and membership will be mandatory.
A new property portal for private landlords and tenants -
A new digital Property Portal will be introduced to "provide a single ‘front door’ to help landlords understand, and demonstrate compliance with their legal requirements". This should help address the problem of where some private landlords let sub-standard properties without using professional Agents and without complying with legislation designed to protect tenants.
The government says that "too often tenants find out too late that they are renting a substandard property from landlords who wilfully fail to comply, and councils don’t know who to track down when serious issues arise". It notes that the portal will also "support good landlords to demonstrate regulatory compliance and to attract prospective tenants".
The Property Portal will "dramatically increase local councils’ ability to enforce against criminal landlords". The government plans to incorporate some of the functionality of the existing Database of Rogue Landlords.
Industry Comment -
The letting Agents Professional body (ARLA Propertymark) and the NRLA have both stressed to the Government that it needs to reform the courts BEFORE Section 21 powers are removed to tackle the lengthy waits for possession cases to the processed. The Courts must be able to cope with possession hearings adequately when required.
Propertymark has long called for a specialist housing court. Landlords need confidence that they can regain possession after issuing a Section 8 and the capacity of the courts is the biggest obstacle to this at present.
“We are also concerned the UK Government does not fully appreciate the extent to which an unreformed courts system could undermine its tenancy reforms.”
Whilst giving tenants a fairer deal, the government needs to ensure that good responsible landlords are not discouraged by this Bill. A higher supply of good-quality rental property, as well as property to buy, must be encouraged to help everyone and to overcome the housing shortage.
With ever-changing rental legislation and the need to comply with over 150 Regulations it is more important than ever that Landlords employ the services of a professional Letting Agent to manage their property and look after their tenants.