The Renters Reform Bill was first announced in December 2019 and the Government has published its long-awaited White Paper today. Part of the Department for Levelling Up, Housing and Communities’ wider agenda to level up the country, this bill will attempt to force an improvement in the quality of accommodation offered by rogue landlords*
Some key elements of the White Paper are:
- Decent Homes Standard: The Decent Homes Standards (2006) will be extended to apply to homes in the PRS. Landlords failing to meet the Decent Homes Standard could face inspections (from local councils, backed by ‘enforcement pilots’) and unlimited fines. A decent home must meet four criteria:
1.1. Meet the current statutory minimum standard for housing – dwellings that do not meet this are those containing one or more hazards assessed as Category 1 under the HHSRS
1.2. Be in a reasonable state of repair
1.3. Have reasonably modern facilities and services – such as a reasonably modern kitchen (20 years old or less) and a reasonably modern bathroom (30 years old or less)
1.4. Provide a reasonable degree of thermal comfort – including effective insulation and efficient heating
The legal requirement for properties to be in a decent condition is long overdue. We have always advised our clients that properties in the best condition will attract the best tenants at the best rents.
- An end to ‘no-fault evictions’: The abolition of Section 21 (which allows landlords to terminate tenancies without giving a reason) was proposed in the Queen’s Speech in 2019 and has been reiterated in every speech since, so this was not a surprise. In 2017, the Scottish government abolished the equivalent of England’s Section 21. In their model, landlords are able to get the property back if they want to sell it or if they want to move a family member in, so it is likely that this will also apply in England when Section 21 is removed.
- Periodic tenancies: All tenants are to be moved onto one system of periodic tenancies. This will allow them to leave poor quality housing without remaining liable for the rent, or to move more easily when their circumstances change. The tenancy will only end if the tenant ends it or the landlord has a valid reason, defined in law.
- Rent increases: Notice periods for rent increases will be doubled and tenants will have stronger powers to challenge them if they are unjustified. Tenants have been able to challenge rents since the Housing Act 1988, but perhaps a more efficient scheme is planned. Arbitrary rent review clauses will also no longer be allowed, including unjustified rent increases, and tenants will also be able to be repaid rent for homes that are considered ‘non-decent’.
- Pets allowed: Tenants will have the right to request a pet in their house, which the landlord cannot unreasonably refuse, so there will be a blanket ban on “No pets”. The onus will fall to the landlord to show why they cannot accept a pet (e.g. it’s in the property’s head lease). Landlords may be allowed to ask for pet damage insurance as a condition of tenants keeping animals.
Other proposed measures include:
• Landlords or agents will not be able to have blanket bans on renting to families with children or those in receipt of benefits. Again, there are already laws in place around discrimination, so perhaps this is more about formalising than changing things.
• A new Private Renters’ Ombudsman will be created to enable disputes between private renters and landlords to be settled without going to court, saving time and money. This means landlords will still be able to efficiently gain possession from anti-social tenants and can sell their properties when they need to.
• A new property portal will help landlords to understand their responsibilities and give tenants the information they need to challenge rogue operators.
• Tenants will be able to demand information and rate their landlord as part of new satisfaction measures
These new measures will form part of the Renters Reform Bill, which is to be introduced into Parliament later in 2022. The proposed Bill is complex and we await further details to fully understand the potential impact. Of course, we welcome any processes that improve property standards and drive out rogue landlords, but the Government also needs to help attract new landlords to the market as well. There are concerns that forcing landlords to accept pets, or removing their ability to gain possession of their property could further reduce the supply of property to rent. This would only serve to intensify the issues that tenants already face, reducing choice and potentially increasing rents when people can least afford it.
Published June 2022
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*The Department for Levelling Up, Housing and Communities state that – whilst most homes in the Private Rented Sector (PRS) are of good, safe quality – the condition of 12% of households pose a risk to tenants’ health and safety.