United Kingdom

Commons committee delivers rental reform verdict

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The Levelling Up, Housing and Communities Committee has delivered its report on the government’s rental reform proposals, which were set out in the ‘A Fairer Private Rented Sector’ white paper published last year.

The report is the first in-depth cross-party scrutiny of the white paper, and its recommendations could help shape any eventual Renters’ Reform Bill.

The Committee broadly welcomed the proposal to scrap Section 21 evictions and replace fixed-term tenancies with open-ended ones. First, it recommended that student tenancies should be exempt so that fixed-term tenancies can line up with the academic year. Additionally, it endorsed the government’s plans to create new grounds for possession where tenants have persistent arrears.

However, it warned that new possession grounds for landlords who wish to sell or move into their properties could be used as a loophole for “no fault” evictions. To prevent this, the Committee recommended that neither ground should be available during the first year of a tenancy, and also said that landlords should be barred from marketing or re-letting the property for six months after using either ground.

The report also recognised landlords’ fears about lengthy court delays, and criticised the government’s rejection of a dedicated housing court. The Committee said that the government must significantly increase court capacity, fast-track possession claims for rent arrears and antisocial behaviour, and agree with landlords how quickly courts must process claims – all before repealing Section 21.

Improving housing standards

The Committee added that it supports the planned introduction of a Decent Homes Standard (DHS) for the private rented sector. However, it warned that many local authorities lack the capacity to enforce it properly. As they are unlikely to receive more central government funding, the Committee recommended that enforcement should become self-funding – by allowing local authorities and courts to pass on bigger penalties to landlords.

The report argues that the cost of bringing properties up to standard shouldn’t be a barrier to compliance, as costs are capped at £10,000. However, it also concluded that the government should make more financing options available to landlords to improve energy efficiency when the necessary works would cost more than that.

Additionally, the Committee agreed that all private landlords should be covered by an ombudsman, as letting agents already are, but questioned the government’s plan to set up a new ombudsman scheme for that purpose. Instead, they recommend a single ombudsman for the whole PRS, covering landlords and letting agents.

The reaction

Industry bodies, including Propertymark and the National Residential Landlords Association, welcomed the Committee’s findings on court reform as well as its recommendation to build more houses. However, Timothy Douglas, head of policy and campaigns at Propertymark, warned that introducing an ombudsman covering letting agents as well as landlords would have knock-on effects for sales and managing agents, who currently share a scheme with letting agents and may not be appropriately covered by a replacement PRS ombudsman.

Meanwhile, activist group Generation Rent applauded the Committee’s proposals to limit landlords’ ability to evict tenants when they want to sell or occupy the property themselves.

The government now has two months to formally respond to the report, although there is no guarantee that they will accept any of its recommendations.

Other housing policy headlines

Labour launches major review of private rental sector – Letting Agent Today

Rental evictions rise sharply – Property Industry Eye

New housing minister Rachel Maclean will be 15th since 2010 – BBC

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