Rental Revolution – Agents Worried At Government Proposals
Agents have voiced their reservations over aspects of the widespread rental sector reform announced by the government in the Queen’s Speech.
Yesterday the government confirmed that it would publish a White Paper ahead of a Renters Reform Bill, within this next legislative year, with a series of radical reforms.
These include scrapping what the government has called ‘no fault’ evictions – section 21 evictions – “giving renters better rights when they are told to leave despite complying with the terms of their tenancy.”
There will be additional reform of landlords’ grounds for possession to give them greater powers to tackle repeated rent arrears or anti-social behaviour among tenants.
Privately rented homes are likely to be subject to the same minimum standards now required off social rented homes, while there will also be a portal for landlords which appears likely to become a form of register.
In addition, a new ombudsman for private rented landlords “will ensure disputes can be easily resolved without going to court.”
Timothy Douglas, head of policy and campaigns for Propertymark, comments: “The measures proposed for the private rented sector in the Queen’s Speech will have a significant impact on letting agents, their landlords and therefore tenants in England.
”What we need to see is balance throughout the possession and court processes to ensure that agents and landlords have efficient access to regain possession when justified."
“Letting agents are already well versed in dispute resolution, making them a pivotal part that could prove to be more efficient than the introduction of a new property portal."
“An introduction of legally binding standards of property across the rented sector is welcome in principle, but legislators must understand what is possible across a variety of property types which exist in the private rented sector.”
And Jeremy Leaf, the north London estate agent and former RICS residential chairman, says: “There is no point in frightening off landlords or tenants and trying to find a balance between the two is key. The government has discussed getting rid of Section 21 for a while so that comes as no surprise.
“But it is important to create a balance between landlords and tenant because we don’t want supply to be reduced unnecessarily and nor do we want to retain tenants who are in serious arrears or displaying anti-social behaviour, which is upsetting other people in and around the property.”
Industry suppliers have also been commenting.
Daniel Evans, chair of the Association of Independent Inventory Clerks, asks: “Will the government – distracted by everything from partygate to war in Ukraine, the cost-of-living crisis and its own internal strife, worsened by the recent poor showing at the local elections – be able to keep its eye on the ball with something as major as widespread rental reform?
“We’ve heard for many years the plans to scrap Section 21, introduce a compulsory landlord register (as is already the case in Scotland) and implement lifetime deposits, but we’ve never really got any further than that."
“This latest announcement is a step in the right direction, but as we’ll remember from previous Queen Speeches, this isn’t the first time rental reform has been promised. Equally, pledges made in the Queen Speech aren’t always adhered to, so I think it’s important the industry doesn’t get too far ahead of itself."
“We all need a bit more clarity and certainty, and hopefully now we know the direction of travel with regards to rental reform, the momentum behind it will no longer falter.”
Meanwhile this is the entirety of the detail given by the government about the Renters’ Reform Bill, confirmed in yesterday’s Queen’s Speech.
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Renters Reform Bill
The purpose of the Bill is to:
– Fulfil the manifesto commitments to abolish so-called ‘no fault’ section 21 evictions and strengthen landlords’ rights of possession, delivering on the levelling up mission to halve the number of non-decent rented homes by 2030 and create a rental market that is fairer and more effective for tenants and landlords.
The main benefits of the Bill would be:
– Delivering a better deal for renters through reforms that will provide 4.4 million households with more secure and higher quality homes.
– Providing a more effective legal framework and a more stable rental market for landlords to remain and invest in.
– Giving local councils effective tools to crack down on the minority of non- compliant landlords and poor practice.
The main elements of the Bill are:
– Abolishing so-called ‘no fault’ evictions by removing Section 21 of the Housing Act 1988, providing security for tenants in the private rented sector and empowering them to challenge poor practice and unfair rent increases without fear of retaliatory eviction.
– Reforming possession grounds for landlords, introducing new and stronger grounds for repeated incidences of rent arrears and reducing notice periods for anti-social behaviour, ensuring that they can regain their property efficiently when needed.
– Applying the legally binding Decent Homes Standard in the Private Rented Sector for the first time ever, giving tenants safer, better quality and better value homes.
– Introduce a new Ombudsman for private landlords so that disputes can easily be resolved without the need to go to court, which is often costly and lengthy, and ensure that when residents make a complaint, landlords take action to put things right.
– Introducing a new property portal to help landlords understand their obligations, give tenants performance information to hold their landlord to account as well as aiding local authorities.
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Territorial extent and application
The Bill will extend to England and Wales and apply to England only.
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Key facts
– There are currently 4.4 million households in the private rented sector in England, making it the second largest tenure (19 per cent of households).
– Around one million (21 per cent) private rental homes don’t meet the Decent Homes Standard. This is down from 41 per cent in 2009 but still much higher than other tenures (12 per cent of social sector homes and 16 per cent of owner- occupied homes).
– In 2019-20, more than one fifth of renters (22 per cent) did not end their last tenancy by choice and faced an average of £1,400 of moving costs as well as likely paying more for the home they moved into.
– The measures in the Bill will support the Government’s levelling up mission on housing for the number of non-decent rented homes to have fallen by 50 per cent by 2030.
– We will shortly publish a White Paper which will set out more detail on our proposals for landmark reform in the private rented sector.
