Plan for ‘fairer’ rental sector includes ban on no-fault evictions
Millions of renters will be better protected under a radical shake-up of the sector to “redress the balance between landlords and private tenants”.
The government’s white paper for a fairer private rented sector is designed to “redress the balance between landlords and 4.4 million private rented tenants” by providing “new support for cost of living pressures with protections for the most vulnerable, and new measures to tackle arbitrary and unfair rent increases”.
Levelling up and housing secretary, Michael Gove, said: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe and cold properties, with the threat of unfair ‘no fault’ evictions orders hanging over them.
“Our new deal for renters will help to end this injustice by improving the rights and conditions for millions of renters as we level up across the country and deliver on the people’s priorities.”
As part of its blueprint for renters reform, it will ban section 21 ‘no-fault’ evictions – allowing landlords to terminate tenancies without giving a reason – and extend the Decent Homes Standard to the private rented sector. More than a fifth of private renters who moved in 2019 and 2020 did not end their tenancy by choice, the government said.
Some of the other proposals include:
- Helping the most vulnerable by outlawing blanket bans on renting to families with children or those in receipt of benefits
- Ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent and enabling tenants to be repaid rent for non-decent homes
- Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified
- Giving councils stronger powers to tackle the worst offenders and increasing fines for serious offences
- Giving all tenants the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse.
The announcement forms part of the government’s mission to cut in half the number of poor-quality rented homes by 2030.
To support the estimated 2.3 million private landlords, the government proposals include:
- Creating a Private Renters’ Ombudsman to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court
- Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to
- Introducing a new property portal that will provide a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators.
Reacting to the proposals, Paul Wootton, Nationwide’s director of home, said: “When implemented, the proposals outlined in this long-awaited bill will have a positive impact on housing quality and conditions for tenants and provide much-needed clarity on rules and regulations as well as additional support for landlords.
“As a buy-to-let lender we are keen to understand more about how the changes will be implemented, to ensure we fulfil our important role of balancing the needs of landlords as well as tenants. We are keen for the legislation to be delivered as soon as possible as the rising cost of living is continuing to exacerbate the issues the Renters Reform Bill is looking to address.”
Ben Beadle, chief executive of the National Residential Landlords Association, said: “While headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful, the detail to follow must retain the confidence of responsible landlords, as well as improving tenants’ rights.”
Eventual legislation, he said, “needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”
Eddie Hooker, chief executive of the Hamilton Fraser Group, which operates industry schemes such as Total Landlord Insurance and Client Money Protect said: “A more effective legal framework will ultimately help to create a more stable market for landlords to invest in. These proposals confirm the direction of travel, but the devil will be in the detail of the legislation.”
He said it was vital that the eventual legislation doesn’t deter landlords from the sector as this will cause more landlords to exit, exacerbating an existing shortage of rental homes and driving up rents at a time when interest rates are rising faster than they have done in decades, and when people can least afford it.
“While landlords are frequently portrayed as fat-cat institutions that have no regard for tenants, the truth is that most are decent people with just one or two investment homes which form part or all of their income or retirement plans and to continue to squeeze them would be counter-productive.”
Jeremy Leaf, a North London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said: “In principle, we welcome the announcement that tenants will have the legal right to keep pets. However, the most important question with any new rule affecting the private rental market is – does it pass the test of not reducing the number of properties to let and is it likely to increase rents? The answer in my opinion on both counts is – yes, provided it is fair on landlords and tenants.
“Landlords must not unreasonably withhold properties from tenants with pets whereas, on the other hand, tenants should have a legal duty to cover the cost of any damage made by their pets. The change should improve letting activity in theory bearing in mind we find the single biggest reason why private tenants move is to find pet-friendly properties.
“Owners who are reluctant to embrace the new arrangement will probably find – as we do – that tenants with pets tend to stay longer and keep properties in better condition.”