The Renters (Reform) Bill has finally been published, but it still leaves a lot of the industry’s questions unanswered.
The Bill, which was unveiled in Parliament yesterday, will bring into law the proposals made in last year’s rental reform white paper, as well as a few extras.
- Section 21 (“no-fault”) evictions will be abolished. Landlords will only be able to evict for specific causes, such as selling the home. Shorter notice periods will be brought in for some other causes, such as rent arrears. In cases of severe antisocial or criminal behaviour, landlords will be able to begin proceedings immediately. A complete list of new and retained grounds for possession can be found in Annex B of the government’s explanatory notes on the Bill.
- Landlords will only be allowed to increase rent once per year within a tenancy. Tenants will be able to challenge rent increases at the First-tier Tribunal. Additionally, the notice period for increasing the rent will increase from one to two months, and within-tenancy rental review clauses will be banned.
- The government will set up a new private rented sector Ombudsman to rule on tenants' complaints against their landlords (but not on landlords' complaints against their tenants). All private landlords will have to register with the Ombudsman, whether or not they work with a letting agent, and it will have the power to require remedial action and compensation. Landlords will also have to pay a fee for this service.
- Letting agents will have to verify that the landlords they work with are registered with the Ombudsman. Marketing or letting a property on behalf of a landlord who isn’t registered will carry a penalty of up to £5,000.
- A new digital Property Portal will be introduced to help landlords understand their legal duties and tenants to make informed decisions. All rental properties will have to be added to the portal, and any listings marketing the property must include a unique identifier. Landlords and agents can be fined for marketing properties that are not on the portal, or not including the relevant information in a listing.
- Landlords will not be allowed to “unreasonably refuse” when tenants ask to keep pets. However, they can require tenants to have pet insurance.
Alongside the Renters (Reform) Bill, the government also plans to create new legislation on other housing issues in the near future.
- Privately rented homes will have to meet the Decent Homes Standard. Previously it only applied to the social housing sector.
- Letting agents and landlords will be prohibited from placing blanket bans on tenants who have children or receive benefits.
- Councils will be given stronger enforcement powers over the private rented sector, and will have to report their enforcement activity to the central government.
- The court process will be digitised to help speed up eviction cases.
Filling in the gaps
While the bill’s arrival brings some certainty to the industry, the government still has a lot of work to do before it becomes law. Many of the potential issues flagged up by property professionals and the government’s Levelling Up, Housing and Communities Committee have been left unaddressed.
The National Residential Landlords Association has warned for months that open-ended tenancies won’t work for student rentals, as students usually only stay for the academic year. Registered Purpose-Built Student Accommodation providers will not be affected by the Bill as they do not offer assured tenancies, but private landlords who rent to students may suddenly find their businesses unviable.
No dedicated Housing Court has been announced, despite repeated calls from the industry. Neither has any extra funding to speed up existing court processes. If the government’s digitisation project doesn’t cut waiting times, the eviction backlog is likely to continue.
Activists have also argued that landlords could use large rent increases as a way to push out unwanted tenants (although tenants will be able to challenge rent increases), and called for penalties for landlords who misuse eviction grounds. However, landlords will be barred from remarketing or reletting a property within three months after repossessing it on the eviction ground for occupying or selling it.
The government may also have to deal with the threat of a backbench rebellion. The announcement of the bill was delayed by a week, reportedly because of resistance from Conservative MPs. Some have publicly condemned the bill and warned that it will drive landlords out of the market, and the government’s announcement contained nothing to change their minds.
The government has said that it will give full details of the Renters (Reform) Bill at a later date. Until they do, the property industry won’t have the certainty and stability it needs.
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