The Government recently published its White Paper on its plans to reform the Private Rental Sector.
The aim of the Rental Reform is to increase the standard of the homes provided, offer Tenants more security of tenure and add fairness to the system. Or in the Governments own words “to tackle these injustices by offering a New Deal to those living in the Private Rented Sector; one with quality, affordability, and fairness at its heart.”
We have set out below a selection of the main points from the White Paper. It’s worth pointing out that at this stage we know this will be introduced, however we don’t yet have firm dates on when this will be implemented. I have read that it will be April 2024 at the earliest but most likely in 2025. Landlords will receive at least six months’ notice of the implantation date.
Abolishment of Section 21 and Grounds for Possession
· Landlords will no longer be able to serve a Section 21 Notice, the “no-fault eviction”
· Grounds for possession will be introduced for Landlords who wish to sell their property or use it for family members
· Mandatory grounds for possession will be introduced for persistent rent arrears, serious anti-social and criminal behaviour
· Tenants will be able to give 2 months’ notice at any time
Introduction of a Single System of Periodic Tenancies
· No more fixed-term contracts. This effectively introduces indefinite Tenancies until the Tenant serves notice or the Landlord has grounds for possession
Rent Increase Restrictions
· Rent Increases will be limited to once per year with two months’ notice
· Rent review clauses will not be allowed in Tenancy Agreements
· Tenants can appeal to First Tier Tribunal if they feel the rent increase is unfair
Renting with pets
· Landlords will no longer be able to unreasonably withhold consent for a tenant to have a pet
– If the building has a Headlease that stipulates “no pets”, this would be classed as reasonable grounds to withhold consent
· Tenants will have the ability to challenge the decision if consent is withheld
A New Housing Ombudsman
· A new Housing Ombudsman will be introduced
· Membership will be mandatory for all Landlords
· This is created to settle disputes between Landlords and Tenants quickly without the need to go to Court.
· 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.
A New Property Portal
· The is introduced to help Landlords understand and demonstrate compliance with their legal requirements.
· Landlords will be legally required to register their property
· “The portal will act as a trusted one-stop-shop for guidance on renting in the PRS – levelling up awareness of tenants’ and landlords’ rights and responsibilities across the country.”
Conclusion
These changes will no doubt be welcomed in the parts of country where there is a large portion of substandard housing. However, it will remain to be seen how effective the local authorities can be with enforcing the new regulations given they currently have the powers to enforce current legislation and it hasn’t solved the issue. I would say the main issue is manpower over the actual legislation itself, but time will tell.
A big concern is that the introduction of the new system and further legislation may “put off” Landlords from remaining in the sector as this follows from continued legislation being introduced for Landlords over recent years followed by a challenging period through Covid, or discourage new Landlords from entering the sector. However, I don’t think it will necessarily discourage them. The clients who we Let and Manage properties on behalf of are fair Landlords who want to ensure their property is a good standard and complies with regulation.
What this does highlight is the importance of choosing a reputable agent who takes responsibility for the quality of tenant they are sourcing for your property and ensures that the correct referencing is carried out prior to Tenancy. After all, changing tenants can be expensive and a stressful time and Landlords will only change if they have a bad tenant, wish to sell, or need the property for themselves, and from the information we have been given, the system allows for that.
