This month The Renters Reform Bill was brought to Parliament. The government now needs to pass this bill into law – something that is pledged to take place before the next General Election in late 2024.
Government says The Renters (Reform) Bill will improve the system for the 11 million private renters and 2.3 million landlords in England.
The Bill promises to:
- Abolish section 21 ‘no fault’ evictions and move to assured, periodic tenancies, abolishing fixed-term tenancies. This means tenants will need to give two months’ notice if they wish to leave but will not have 6-month or 12-month rent liabilities as under fixed-term tenancies. Government may amend this so that landlords can retain fixed-term contracts in the student sector.
- Introduce more comprehensive possession grounds so landlords can still recover their property (including where they wish to sell their property or move in close family) and to make it easier to repossess properties in cases of anti-social behaviour and repeat rent arrears;
- Provide stronger protections against backdoor eviction by ensuring tenants are able to appeal excessively above-market rents which are purely designed to force them out. As now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed.;
- Introduce a new Private Rented Sector Ombudsman that which will provide fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system;
- Create a Privately Rented Property Portal to help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement.
- Give tenants the right to request a pet in the property, which the landlord must consider and cannot unreasonably refuse. To support this, landlords will be able to require pet insurance to cover any damage to their property.
Further reforms promised are:
- Apply the Decent Homes Standard to the private rented sector
- Make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children –
- Strengthen local councils’ enforcement powers and introduce a new requirement for councils to report on enforcement activity – to help target criminal landlords.
This Bill is now on its passage through Parliament and, as previously stated, is expected to come into force by the next General Election.
Views vary on the effectiveness of the Bill.
Thanet council’s deputy leader Cllr Helen Whitehead, who is also in charge of housing for the district, says despite the fanfare the removal of no fault evictions has just been replaced with strengthening of other powers.
She said: “The universal headlines are occupied by the abolition of Section 21 evictions, otherwise known as “no fault” evictions, where landlords are not required to give a reason as to why they are ending the tenancy.
“However, whilst removing Section 21, the government has also strengthened/expanded other grounds for eviction, to allow for eviction if the landlord is intending to live in the property, sell the property, or if behaviour is being exhibited that is “capable of causing” an ASB issue.
“Bluntly, Section 21 disappearing doesn’t warrant the significance that has been attached to this move, as the strengthening of powers in other areas to a large degree simply produces similar powers under a different name, and monitoring the legitimacy of given grounds is going to be an ongoing challenge.”
However, she says there are elements of the Bill that are welcome – such as a responsibility on landlords to not “unreasonably” refuse pets – albeit with the proviso that landlords can require renters to take out pet insurance against damage.
Cllr Whitehead says she also welcomes: “ A move to periodic tenancies with two months notice (which can be waived if the tenant wishes to move earlier and the landlord agrees), once yearly rent reviews and no automatic rent increases, a property ombudsman to deal with complaints, a mandatory landlord register, and a six month period at the start of the tenancy where notice cannot be served, to increase stability for renters.”
But she highlights one measure that was not included that would have made a huge difference to those in private let accommodation -a rent cap.
She said: “This hasn’t been included in the Bill, although arguably it is the measure that could have made the most difference to eviction rates.
“In Thanet, we are seeing extraordinary rises in rent and in property purchase; partially fuelled by the areas sudden popularity, partially by the influx of individuals choosing to invest in property here as popularity rises, and partially due to the rise in short term rentals, which reduces overall availability and spurs investment purchases, which is increasing rent exponentially in certain parts of Thanet.
“The reality is that those who use property for rental income are now far more likely to only invest in short term rentals, which is likely to reduce property supply; and we are already seeing landlords with smaller numbers of properties selling up entirely in areas of increasing sales prices, such as Thanet.
“This simply puts those properties on the open market, to usually be bought as investment properties or short term rentals/Airbnb. For many Thanet residents, buying one of those properties on Thanet wages is simply out of reach.”
Cllr Whitehead says the Bill is “messy” with “glaring holes” such as omission of the rent cap, the lack of a Decent Home Standard as exists in the social rented sector and lack of solid protections for those on benefits/with children..
She added: “We are assured that the Decent Home Standard and the protections issues will be addressed at a later date; however, I’m not really clear as to why the choice has been made to develop that legislation separately, as the logical thing would be to include those protections within the Bill, if you genuinely want to address those issues.”
Cllr Whitehead says she believe in the short term there will be fewer properties available for long term rental, rent rises as a result of that lack of availability, and the use of expanded powers/grounds to evict instead of Section 21, rather than a decrease in evictions overall.
This combination would put further pressure on council housing services which are already struggling with demand, and enforcement which will also fall to local authorities without extra resources being likely.
She added: “I believe that the best way to balance the external rental market is by internal means; building council houses at a sufficient rate to balance market pressures and keep private rents manageable.”
South Thanet MP Craig Mackinlay, who is a landlord, has also expressed concerns but in terms of whether Section 21 is actually used to evict for ‘no reason.’ Despite focusing on the Bill in a different way, he too agrees that strengthening of other powers essentially replaces Section 21.
He said: “Whilst sounding entirely innocuous and positive for tenants, and I obviously support that, my experience is that s21 no-fault evictions on a whim are rarely used. Why would a rational Landlord – of which I’ll state clearly that I am one- evict a tenant merely because the abstract right to do so exists? The answer is they don’t.
“The reasons s21 has been used is as an alternative to court-led s8 evictions for non-payment of rent or anti-social behaviour. Evictions for these reasons and for the property to be taken back by the Landlord for sale will be made more explicit in this Bill so nothing changes there. My query is whether this Bill is attempting to solve a mischief that simply doesn’t really exist?
“My fear is that there will be a huge number of s21 evictions prior to the Bill becoming law as Landlords use the last chance saloon as they feel that the increasing number of rules and regulations loaded onto them is now too much.
“I’m not sure local authorities are ready for the housing demands upon homelessness claims that will be coming their way.”
The Bill has been broadly welcomed by homelessness and pet charities but concerns have been expressed by local authorities that they will not have resources for enforcement and some landlords have dubbed it a ‘rogue tenants charter.’ It is said that some 30 Tory MPs are set to oppose the legislation.
The Bill was first mooted in 2019. It had its first reading in the Commons on May 17 and the second reading the following day. It must now pass through multiple stages in the House of Lords and the House of Commons before making it into law and could be at risk of being watered down before reaching the final stage.