Government Proposes a Fairer Private Rented Sector
After a policy decision was announced that Section 21 “no-fault” evictions would be abolished three years ago, the Government has published a white paper which promises a “new deal” for renters in England. The white paper sets out a plan of action (which is summarised below) to address the imbalance between tenants and landlords in the private rented sector. A draft bill is expected to be published later this year.
The main takeaways are:
1. Section 21 “no-fault” evictions are to be banned
The Government states that as tenant demand has grown in recent decades, and the renter demographic has changed, renters are now looking for more security and stability from their rented accommodation. According to Government research more than 1/5th of renters moved because their landlord asked them to leave or because their fixed term ended. Abolishing “no-fault” evictions will give tenants greater security.
2. Changes to Section 8 grounds and court reforms
If Section 21 “no-fault” eviction notices are to be abolished, the Government acknowledges that changes need to be made to the grounds for possession under Section 8. New (and reformed) grounds are to be created:
- Strengthening the mandatory grounds of criminal behaviour/serious antisocial behaviour;
- New mandatory ground for repeated arrears (tenants must have been in at least 2 months’ arrears three times in the previous three years) regardless of whether they are in arrears at the time of the hearing;
- Reformed “moving in” ground (to include close family members who want to live in the property); and
- New mandatory ground if the owner wishes to sell the property.
Reforms to the court process are also needed to make this more efficient and effective. Claim forms are to be simplified and streamlined, and there is to be a new online process for court possession, which will make it easier and more efficient. Certain cases are also to be prioritised.
3. Fixed term tenancies to be abolished and all tenancies in writing
Landlords will not be able to create fixed term tenancies.
All tenancies are to be periodic and can be terminated by the tenant serving two months’ notice to end the tenancy at any time. Landlords will only be able to end the tenancy using one of the grounds under Section 8 of the Housing Act 1988 (as amended). The Government wants to increase flexibility for tenants, especially if the property is unsafe.
Currently, an assured shorthold tenancy can be made orally. Under the new proposals all tenancies must be in writing.
4. Decent Homes
The Government state that 21% of private rented homes are non-decent, especially in areas of the North of England.
Landlords will be required by law to meet the Decent Homes Standard. It is not confirmed what the Decent Homes Standard will entail but it is likely to include minimum EPC levels of C by 2030 where practical, and where it is cost effective.
Rent repayment orders are to be made if a tenant is living in a non-decent home.
5. Tenants to have a right to request a pet
Tenants will have a right to request a pet in their house which the landlord must consider and cannot unreasonably refuse. Landlords will be able to request that the tenant purchase pet insurance to protect against damage to the property.
6. Landlords to be members of a mandatory redress scheme
There is to be a new private renters’ ombudsman which will enable disputes between tenants and landlords to be resolved without going to court (using alternative dispute resolution and mediation) and which will also be cheaper.
7. New property portal
There is to be a new portal which can be used by landlords, tenants, and local authorities. Tenants will be able to check landlords’ compliance, landlords can understand their responsibilities better by having all the information on the portal, and councils can better crack down on criminal landlords.
8. No ban on letting to families or those in receipt of benefits
Landlords will be prohibited from imposing a blanket ban on lettings to families with children or those in receipt of benefits.
9. Rent Review
All rent increases will need to be undertaken via the Section 13 process, which can take place annually, but other rent review clauses are banned.
The Government is unlikely to make any changes to tenancy deposits at this stage, but it will be closely monitored.
Whilst some change may be welcome, landlords are likely to be concerned about these proposals, which will fundamentally change the private rented sector in England. Landlords may look to sell up at a time when demand from tenants for rental properties is high. This will only seek to drive up rental prices even further.