11 million people, in 4.4 million households are thought to live in private rented accommodation. This makes up 19% of all households, and it is estimated that there are 2.3 million landlords. 26% of households and families in the private rented sector are in receipt of some form of housing benefit.
The government has recently published their white paper on Renting Reform, following the commitments recently made in the Queen’s Speech and as part of their levelling up agenda. It is said that in order to deliver a fairer, more secure and higher quality Private Rented Sector that:
- All tenants should have access to a good quality, safe and secure home.
- All tenants should be able to treat their house as their home and be empowered to challenge poor practice.
- All landlords should have information on how to comply with their responsibilities and be able to repossess their properties when necessary.
- Landlords and tenants should be supported by a system that enables effective resolution of issues.
- Local councils should have strong and effective enforcement tools to crack down on poor practice.
The focus is certainly on residential property and the following are things to look out for:
A 12-point plan of action has been proposed:
- To halve the number of non-decent rented homes by 2030 and require privately rented homes to meet the Decent Homes Standard for the first time. It is said that 21% of private rented homes are non-decent and 12% have serious “Category 1” hazards. Further consultation on the Decent Homes Standard in the private rented sector is expected but to be “decent” a home should be free from the most serious health and safety hazards, not be in disrepair, have adequate kitchens and bathrooms, decent noise insulation and be warm and dry. We wait for the consultation to see to what extent obligations are proposed which are in excess of the current obligations in respect of energy efficiency, to keep a rented property in repair and fit for human habitation.
- To accelerate quality improvements in the areas that need it most. Pilot schemes with a selection of local councils to explore different ways of enforcing standards and working with landlords to speed up adoption of the Decent Homes Standard are expected.
- Abolish Section 21 ‘no fault’ evictions and have a simpler, more secure tenancy structure. A single system of periodic tenancies is proposed, with a suggestion that tenants will have to give two months’ notice to leave. Landlords will only be able to evict in defined “reasonable” circumstances. It is proposed that all existing tenancies will transition to the new system in due course. A system of enforcement to deter landlords from finding and using “loopholes” is also proposed.
- Reform grounds for possession to make sure that landlords have effective means to gain possession of their properties when necessary. New grounds for landlords who wish to sell their property or move back into it are proposed. A mandatory ground for repeated serious rent arrears (to catch those tenants who hover around the 2 months’ worth of arrears and therefore fall in and out of the current mandatory ground) are also proposed. Also anticipated are changes to notice periods – expect an increase in the notice period for rent arrears and a decrease for the notice periods relating to anti-social behaviour.
- Rent increases will be limited to once per year, the use of rent review clauses will end and tenants’ ability to challenge excessive rent increases through the First Tier Tribunal will be improved. Although rent control is not proposed, notice of proposed rent increase will be increased to two months and rent review clauses which automatically increase rent will be prohibited.
- A tenant’s ability to hold their landlord to account will be improved and there will be a new single Ombudsman that all private landlords must join. It is said that this will provide fair, impartial and binding resolution to many issues and be quicker, cheaper and less adversarial than the court system. Alongside this, it is anticipated that plans to bolster and expand existing rent repayment orders and enable tenants to be repaid rent for non-decent homes will be brought forward.
- Work with the Ministry of Justice and Her Majesty’s Courts and Tribunal Service (HMCTS) to target the areas where there are unacceptable delays in court proceedings. It is expected that increased use of an Ombudsman service will take cases out of the court system, therefore increasing the ability of the courts to deal with the most serious cases. Although the suggestion of a separate housing court has been shelved, expect to see changes to the existing procedures, including digitisation. It is proposed to also strengthen mediation and alternative dispute resolution to enable landlords and tenants to work together to reduce the risk of issues escalating. We wait to see exactly how the proposed changes to both the obligations of landlords and tenants and the court and ombudsman system will work to assess whether delays can be reduced.
- Introduction of a new Property Portal to make sure that tenants, landlords and local councils have the information they need. A mandatory portal will provide a single ‘front door’ for landlords to understand their responsibilities, tenants will be able to access information about their landlord’s compliance and local councils will have access to better data to crack down on criminal landlords. Subject to consultation with the Information Commissioner’s Office, it is also intended to incorporate some of the functionality of the Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible. The requirement to provide a written tenancy agreement is also proposed.
- Strengthen local councils’ enforcement powers and ability to crack down on criminal landlords by seeking to increase investigative powers and strengthening the fine regime for serious offences. In addition, a requirement for local councils to report on their housing enforcement activity is being explored.
- Making it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits and explore if similar action is needed for other vulnerable groups, such as prison leavers. Improved support to landlords who let to people on benefits, which will reduce barriers for those on the lowest incomes, is also proposed.
- Give tenants the right to request a pet in their property, which the landlord must consider and cannot unreasonably refuse. Amendments to the Tenant Fees Act 2019 so that landlords can request that their tenants buy pet insurance is suggested.
- Work with industry experts to monitor the development of innovative market-led solutions to passport deposits. As nearly half of all tenants in the private rented sector have no access to savings, this will help tenants who struggle to raise a second deposit to move around the PRS more easily and support tenants to save for ownership.
We wait for the draft bill to be published to see how these proposals will take effect and to then consider what the remedies are should a landlord fall foul of the provisions. There will be a lot to work through when it comes to the practical application of the proposals.