Private rented sector white paper can help ensure a professional PRS, but must be properly policed

Leading rental payment platform PayProp has welcomed the added protections for landlords and renters outlined in the UK government’s rental reform policy paper, but cautioned that ensuring adequate enforcement will require a clearer commitment to funding and court capacity.

The measures outlined in A fairer private rented sector are due to be included in the upcoming Renters Reform Bill. The promised legislative changes include:

  • The removal of Section 21 ‘no-fault’ evictions.
  • Strengthening some mandatory grounds for eviction under Section 8, including repeated arrears.
  • Extending the Decent Homes Standard to cover the private rented sector.
  • Giving tenants stronger powers to challenge landlords and claim back rent where homes don’t meet the Decent Homes Standard.
  • Strengthening the current bans on not renting to tenants with children or those receiving benefits under consumer protection law, by making it explicit under property law.
  • Stopping landlords from refusing a tenant’s request to have a pet in the property without a good reason, but allowing them to require the tenant to get insurance to cover any damage.
  • Requiring standard tenancy agreements to be a periodic tenancy with no end date.
  • Allowing tenants to terminate their tenancy at any point with two months’ notice.
  • Preventing landlords from ending a tenancy and evicting a tenant without going to court with a valid reason, defined in law, such as rent arrears, anti-social behaviour or needing to sell or occupy the property.
  • Creating a new Private Renters’ Ombudsman to settle disputes between private renters and landlords at a lower cost than going to court.
  • Requiring landlords and agents to give tenants two months’ notice of any rent increase and allowing tenants to challenge the rent increase through the Private Renters’ Ombudsman, who can decide if the rent increase is too high.
  • Giving landlords access to a new property portal telling them everything they need to do to comply with lettings laws. Local authorities and tenants will also have access to check if a landlord has complied with the measures on the portal.
  • Granting local authorities stronger powers to tackle bad landlords and allowing them to levy higher fines.

 

Evictions: The Scottish example

The biggest change to eviction proceedings contained within the policy paper is the abolition of ‘no-fault’ evictions through the removal of Section 21 of the Housing Act 1988. While this measure has been promised for years by the UK government, Scotland removed ‘no-fault’ evictions in 2017 and continues to set a legislative agenda that the UK government has tended to follow. Along with the removal of ‘no-fault’ evictions, the Scottish government strengthened other rules that allowed landlords to recover properties in cases of rent arrears, anti-social behaviour or needing to occupy or sell the property.

“With the abolition of Section 21 of the Housing Act 1988, we are glad to see the UK government committing to strengthening mandatory grounds for eviction under Section 8. However, while we note the commitment to streamlining the court process, there has been no pledge to add court capacity to deal with the number of evictions that may now need to be brought under Section 8, which will worry landlords,” says Neil Cobbold, Managing Director, PayProp UK.

“We also note that the court may need to enforce rulings from the new Private Renters’ Ombudsman, which will add to an already heavy court workload.”

Ensuring fairness for all

“While we support the vast majority of the measures in this policy paper, it is important for all in the PRS that they are introduced in consultation with tenants, landlords and letting agents. On the new Private Renters’ Ombudsman, we note that the government says, ‘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,’ but makes no mention of if or when a landlord can report a tenant to the Ombudsman. There is also no mention of who will fund this service, whether the landlord will have to pay a subscription or if the cost will be borne by the taxpayer,” explains Cobbold.

“While increased enforcement action by local authorities against rogue landlords is promised, there is no mention of any additional funding to support this action, only a commitment to fully fund the net additional cost of all new burdens if any are identified. While the vast majority of good landlords and letting agents will welcome the introduction of the Decent Homes Standard and have properties that already exceed it, local authorities must have the funds needed to enforce these standards, identify properties that breach them and fine and potentially ban those who rent out substandard homes.”