Good Afternoon
The government promised that it would release its Renters’ Reform Bill white paper in spring 2022, and the paper was published on 16 June, meeting its self-imposed deadline with a few days to spare. The paper reveals more details of the governments’ plan to introduce new legislation to “redress the balance” between landlords and tenants – and to introduce initiatives to help give landlords “greater clarity and support”. The top proposals include transitioning all assured and assured shorthold tenancies to periodic, abolishing section 21 while strengthening grounds for section 8, creating a new property portal and Private Renters’ Ombudsman, and more.
We understand that these are significant changes for landlords, and we will of course be on hand in the coming months and years to help you understand what this means for your investment, as more details and dates are released. In the meantime, please don’t hesitate to reach out with any questions you may have.
THE “A FAIRER PRIVATE RENTED SECTOR” WHITE PAPER: AN OVERVIEW
Section 21 “no fault” evictions to be abolished
Section 21 will be abolished, so that landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law. The government will therefore 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”. This includes:
- 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 for landlords who wish to sell their property and allow landlords and their family members to move into a rental property.
- The notice period for the existing rent arrears eviction ground will be increased to four weeks while the mandatory threshold of at two months’ arrears at time of serving notice and hearing will remain.
- In cases of criminal behaviour or serious antisocial behaviour, the notice period for the existing mandatory eviction ground will decrease.
Periodic tenancies to become standard
All tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy 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”. It will introduce the changes in two stages, providing at least six months’ notice of the first implementation date, “after which all new tenancies will be periodic and governed by the new rules”. To avoid a “two-tier rental sector”, all existing tenancies will transition to the new system on a second implementation date.
Notice periods for rent increases to be doubled
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. It will also end the use of rent review clauses, and, in cases where increases are disproportionate, the government will “make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal”.
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. Under the Decent Homes Standard, homes must be free from serious health and safety hazards and landlords must keep homes in a good state of repair so renters have clean, appropriate and usable facilities. The government will also expand Rent Repayment Orders to cover repayment for non-decent homes. Additionally, the white paper has reaffirmed the government’s intention to upgrade “as many homes as possible” in the private rented sector to EPC Band C by 2030.
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 to 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. The government will also encourage landlords “to allow reasonable requests by tenants to redecorate, hang pictures or change appliances – provided they return the property to its original state when they leave”.
Bans on renting to families with children or those on benefits to be outlawed
It will become illegal for landlords to have blanket bans on renting to families with children or those in receipt of benefits. The white paper says that, “while most landlords provide a professional service to their tenants, there is evidence that some landlords and agents are actively discouraging, or even preventing people in receipt of benefits or with children from renting their properties”. The government will also explore whether action is needed to support other vulnerable groups that may struggle to access PRS accommodation, such as prison leavers.
A new Ombudsman covering all private landlords
A single government-approved Ombudsman covering all private landlords who rent out properties in England will be introduced and membership will be mandatory. The Ombudsman will have powers to “put things right for tenants”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000. The government also intends for the Ombudsman to be able to require landlords to reimburse rent to tenants where the “service or standard of property they provide falls short of the mark”. The Ombudsman’s decision will be binding on landlords, should the complainant accept the final determination and failure to comply with a decision may result in repeat or serious offenders being liable for a Banning Order.
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”, and to also “support good landlords to demonstrate regulatory compliance and to attract prospective tenants”. The nature of the portal is yet to be determined, with the government to “conduct extensive testing of potential solutions for the portal, underpinned by user research and engagement with representative groups, to make sure the system works for tenants, landlords and local councils”. The portal should be flexible enough to support future policy developments, “supporting efforts to raise standards in the sector and reduce the number of non-decent rented homes by 50% by 2030”. This could include a system where landlords and agents must meet minimum standards before properties can be let.
All the best, The Revive Property Team
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