Renters’ Reform Bill: The changes on the way for the rental sector

17th June 2022

The Government have finally published the Renters’ Reform white paper. The initial proposals have shifted from five main changes to a 12 point plan.

Latest proposals for the Renters’ Reform Bill and what landlords in the private rented sector need to be prepared for

The Government has stated in the white paper there are some key objectives they would like to achieve and it’s worth understanding these as they explain some of the newly proposed legislation changes.

The good news is, they do address issues for both tenants and landlords:-

1. Tenants should have a “good quality, safe and secure home”
2. All tenants should be able to “treat their house as their home and be empowered to challenge poor practice”
3. Landlords should be provided with information on “how to comply with their responsibilities and be able to repossess their properties when necessary.”
4. Both landlords and tenants should have a system that “enables effective resolution of issues.”
5. Local councils should have “strong and effective enforcement tools” to tackle poor practice.

The good news is that the Government seems to have looked at things from both the tenants and landlord’s perspective and as a result the changes proposed are actually quite balanced.

The Government’s plan for the private rented sector

It’s hoped the plans will deliver changes to the rented sector that will benefit both tenants and landlords. The reality is, although they will have some impact on landlords and agents who already look after their tenants and make sure properties are let legally, even with the major changes below, the impact should be minimum for good landlords and may even improve the lettings process for those that deliver a good service.

Here’s some of the key highlights:

• Government aims to halve the number of non-decent rented homes by 2030. They intend to do this by ensuring homes in the private sector meet the Decent Homes Standard. Bearing in mind 79% already do, these are most likely to be ones managed by individual landlords or agents who aren’t members of organisations such as ARLA.
• Landlords will be able to repossess their properties more quickly if there are problems with anti-social behaviour, arrears or the property needs to be sold.
• Rents can only be increased annually and tenants will be allowed to challenge excessive rises.
• All landlords will have to join an Ombudsman Scheme to enable disputes to be dealt with “quicker, cheaper, and less adversarial than the court system”.
• Government will aim to reduce “unacceptable delays in court proceedings”. Bearing in mind it can take up to a year or more to gain possession of a property, this could be excellent news for landlords.
• A new property portal will be created to give tenants, landlords and local councils the information they need. This has been done in Scotland and Wales and will help to ensure everyone secures consistent information and advice about the lettings process.
• Local authorities will be given more enforcement powers to crack down on criminal landlords.
• Landlords won’t be able to reject prospective tenants because they have kids, receive benefits or are considered part of a ‘vulnerable group’ such as prison leavers.
• Landlords can’t “unreasonably refuse” a tenant’s request to have a pet, but landlords can request that tenants purchase pet insurance.

Allison Thompson, National Lettings Managing Director, said: “Ultimately, we welcome anything that has the aspirations to improve standards within the private rental sector, however this legislation is a bit of a mixed bag. There is no point in layering extra legislation on the majority of landlords that are compliant or nearly compliant when the real rogues continue to operate without challenge. Those that want to avoid legislation anyway will continue to do so, and this risks driving more people into the dark underbelly of the housing market.

“I’m pleased that the Government have highlighted that they are going to strengthen local councils and enforcement powers because there are an awful lot of existing regulations that are already in place, poorly policed, and are difficult to enforce at a national level. However the devil of that is going to be in the detail. What’s the funding? What powers are they going to have? What level of resource are they going to give local councils? If there isn’t a big budget for it, how’s it going to happen? That will be my challenge to them.”

What are the next steps?

Currently this is a white paper which effectively lays out what the Government is looking to change, but it will take some time to implement any of the new ideas above.

The Government will now seek feedback from those involved in the rental sector over the coming months and any worries, fears or issues of implementing these proposals on the ground will be identified. For example, some have already expressed concern over the way anti-social tenants will be treated and how rental contracts will work in the student and HMO market if tenants only have to give two months’ notice at any time.

Following further changes and adjustments to these ideas, the Bill will then need to achieve Royal Assent to become an Act, which is likely to take some time. And, as per previously introduced legislation, the changes are likely to apply to new lets within 6-9 months of Royal Assent and then a year for existing tenancies, so we are at least a few years away from seeing any of these changes being made.

If you have any worries or concerns over these new proposals, do get in touch and we will be happy to help explain what’s expected to happen in more detail.