We are sure that you have heard the news that there is going to be a big shake up of the private rented sector.
This is a “white paper”, so it is currently just a set of proposals that has not been subject to lobbying and discussion with interested parties and so it is unlikely that all of the measures will be implemented exactly in the form set out in the white paper.
Despite the alarming headline news, rest assured that if a tenant behaves very badly there will still be remedies available to landlords to take action.
The upcoming changes will not greatly affect the vast majority of Landlords too much, as most Landlords are decent Landlords who already “do the right thing” and adhere to best practices and legislation.
There will be exemptions from any new rules, currently the white paper says that purpose built student properties will be exempt, so whilst it hasn’t yet been clarified whether existing student HMO’s will also be exempt, there will be very strong lobbying in favour of this in the upcoming months/year.
Here is a list of the proposals and an explanation (written by us in bold text and subject to change once further clarification is received from the government) of what may happen.
1. We will deliver on our levelling up housing mission 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. This will give renters safer, better value homes and remove the blight of poor-quality homes in local communities.
Explanation: Largely based on the current HHSRS 29 hazards
with the addition of:
The government has outlined that a “decent” home needs to be “free from the most serious health and safety hazards, such as fall risks, fire risks, or carbon monoxide poisoning”.
This means that landlords will need to ensure their rented homes don’t fall into disrepair, and address problems before they deteriorate and require more expensive work.
Kitchens and bathrooms will need to be located correctly, adequate and not too old, with decent noise insulation. Landlords will also need to update their tenants facilities “before they reach the end of their lives”, to keep them clean, appropriate, and useable – plus all homes will need to be warm and dry.
The government has also reiterated its intention to upgrade as many homes as possible in the private rented sector to an EPC band C by 2030.
2. We will accelerate quality improvements in the areas that need it most. We will run pilot schemes with a selection of local councils to explore different ways of enforcing standards and work with landlords to speed up adoption of the Decent Homes Standard.
Councils will have stronger powers to check privately rented properties and enforce the rules, including fines, a “bad landlord” register etc
3. We will deliver our manifesto commitment to abolish Section 21 ‘no fault’ evictions and deliver a simpler, more secure tenancy structure. A tenancy will only end if the tenant ends it or if the landlord has a valid ground for possession, empowering tenants to challenge poor practice and reducing costs associated with unexpected moves.
The end of the no fault eviction does not mean that a landlord will not be able to serve notice on tenants, but it does mean that a landlord will need a good reason to serve notice on a tenant.
4. We will reform grounds for possession to make sure that landlords have effective means to gain possession of their properties when necessary. We will expedite landlords’ ability to evict those who disrupt neighbourhoods through antisocial behaviour and introduce new grounds for persistent arrears and sale of the property.
The Government plans to “beef up” Section 8 notices, including introducing a new mandatory ground for repeated serious arrears. Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at hearing. This supports landlords facing undue burdens, while making sure that tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.
It has not yet been clarified whether selling a property will be a mandatory ground.
5. We will only allow increases to rent once per year, end the use of rent review clauses, and improve tenants’ ability to challenge excessive rent increases through the First Tier Tribunal to support people to manage their costs and to remain in their homes.
Tenants have always had the ability to go to a first tier tribunal when served with a section 13 rent increase proposal, but excessive rent review clauses in a tenancy agreement will be null and void. We have never recommended a rent increase more than once a year, so there will be no change for Landlords here.
6. We will strengthen tenants’ ability to hold their landlord to account and introduce a new single Ombudsman that all private landlords must join. This will provide fair, impartial, and binding resolution to many issues and be quicker, cheaper, and less adversarial than the court system. Alongside this, we will consider how we can bolster and expand existing rent repayment orders and enable tenants to be repaid rent for non-decent homes.
Letting agents already must belong to a redress scheme. Now all landlords will also need to belong to a scheme too.
If a landlord has not carried out repairs the landlord is obliged to do, the tenant will have stronger power to reclaim rent payments.
7. We will 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. We will also strengthen mediation and alternative dispute resolution to enable landlords and tenants to work together to reduce the risk of issues escalating.
We believe this to be a very positive step for Landlords. Current wait times to regain possession of a property are very long and can be very costly for a landlord.
Mediation and ADR are usually free and can help settle any disputes before they get out of hand.
8. We will introduce a new Property Portal to make sure that tenants, landlords and local councils have the information they need. The 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 (ICO), we also intend 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.
Whilst we are waiting for further guidance on this, it appears that we will have to upload all safety certificates like gas & electric certificates to the new portal, a tenant will be able to see if a landlord has not been compliant with their obligations. This will affect the so called “rogue landlords” and landlords and agents with good practices and awareness of current legislation need not be overly concerned.
9. We will 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. We are also exploring a requirement for local councils to report Department for Levelling Up, Housing & Communities A Fairer Private Rented Sector 7
We are waiting for further guidance and clarification about this.
Other points from the white paper to take into consideration:
Landlords will not be able to have a blanket ban on tenants who receive benefits or who have children
If a tenant requests a pet, the Landlord must consider this and not unreasonably refuse the request.
New periodic only tenancy agreements(a tenancy that just rolls over from month to month)- this will stamp out the practice of some letting agents to continually renew tenancy agreements to generate fees (we do not do this!) All tenancies, whether existing or future, will automatically be a periodic tenancy.
Tenants will have to give 2 months notice to leave a property instead of one month.
The Government are looking at introducing a deposit passport instead of the current deposit schemes.
We are waiting for further clarification about this.
If you have any concerns or you would like to discuss any of the above, please feel free to make an appointment to talk to us over the coming weeks.