The long-awaited Renters Reform Bill has been unveiled, as Ministers bid to address the housing crisis and create a fairer rental market.
We welcome any measure that supports the rights of tenants, however at the same time we also know the vital role that good landlords play in the housing market and appreciate that they haven’t had the easiest ride as of late. With this in mind, it is important that there are no short-sighed knee-jerk reactions – i.e panicked sales of properties, which ultimately reduces stock and choice for tenants with the unintended consequences of driving rents up.
As we have seen throughout history, the fear of change is often worse than the change itself, which has been our experience in Scotland in regards to changes in legislation.
While set out with good intentions, I believe this new Bill does not in practice improve a tenant’s security of tenure if only because a landlord can end a tenancy should they wish to sell or move back in. As such, there is no reason to sell in advance of this bill.
Previously, a tenant could enjoy a certain fixed term, now they can’t.
The headline element of the Bill is the ending of section 21 notices on Assured Shorthold Tenancies in accordance with the Government’s manifesto. In future all evictions will need to be based on an approved reason provided by the landlord through a notice under section 8 of the Housing Act 1988. The section 8 structure is pretty similar, although the various grounds for possession in Schedule 2 of the 1988 Act have been extensively re-worked and this will require detailed cross referencing.
The Bill deletes the concept of ASTs altogether so in future all tenancies will be periodic. In addition, rental periods will be restricted so that they can only be 28 days or one month. Anything else is prohibited. If a landlord attempts to create a fixed term tenancy or seeks to serve a notice to quit, then they can be penalised by the local authority.
The grounds for possession are substantially amended. There are new grounds for sale of a property and for landlords wanting to move back in themselves. A lot of the prior notice grounds under schedule 2 of 1988 Act have been removed. There is an increase of grounds to deal with scenarios where a private landlord would find themselves in breach of the law if they allowed the tenancy to continue. The promised new ground for possession for repeated arrears is there, as are the expected changes to ground 14 (anti-social behaviour) to allow eviction for behaviour “capable of causing” a nuisance. There will remain a burden of proof upon the landlord.
There is to be no fixed terms for tenancies at all. Therefore, tenants will be able to give two months’ notice to leave a property at any time. Where this was introduced in Scotland, this had very little effect as it’s not cheap to move, find another deposit, set up broadband and Sky TV etc.
Effectively they could move in and immediately serve notice. This is likely to be the change that most substantially alters the sentiment on a day-to-day basis. It has implications for short-letting, for agency fee models, and for how landlords set rents. I expect that this will be the focus of a lot of lobbying as the Bill proceeds and I will need to consider how we charge our landlords going forward.
Also, from the White Paper, other provisions are in the Bill. The Portal is mentioned, but there is no detail, as well as a Private Rented Sector Ombudsman. Interestingly, the Bill did not include a ban on “no DSS” or “no kids”, even though the White Paper suggested it would.
The Government made reference to an Ombudsman but dropped the word ‘single’. I suspect the existing redress schemes will be pitching for this which makes sense to me.
There is a new provision which requires all landlords to give a written statement in a form prescribed by the Secretary of State. A financial penalty can be levied for not doing this. This will be a risk area for a lot of landlords and agents but, in reality brings England into line with the other parts of the UK and most recently Wales.
There are quite specific provisions relating to pets. All tenants will be allowed to keep a pet if the landlord consents. That is subject to a provision that the consent cannot be unreasonably refused or withheld, and refusal or consent must be given within 42 days of permission being sought. In a change to the Tenant Fees Act 2019, Landlords will be allowed to insist that the tenant obtains pet damage insurance. That’s good news and doesn’t mean your landlord is compelled to allow a pet.
It is worth noting that a lot of the provisions are lacking on actual detail. Instead, they allow ministers to pass regulations to fill in the gaps and bring them into effect later on as I predicted. We simply don’t know when those provisions will be brought into effect, if indeed ever. It also means that the detail of these provisions will largely evade Parliamentary scrutiny as regulations are less closely examined than Bills.
In terms of overall timing, industry understanding is that the Bill will be carried over any King’s speech with the aim of it getting Royal Assent in spring 2024. That does not mean it will be in force at that time and it is likely that there will be a further wait for the key provisions to come into play and, undoubtedly, some form of transition for existing tenancies. Once Royal Assent is received, we were told by Government there would be a lead in time of 6 months for new tenancies and a further year for existing tenancies.
The key takeaway from all of this is that no landlord needs to sell their property as the bill will allow them to seek possession on that ground. Tenant demand is high and landlords will also have strengthened grounds for rent arrears and anti-social behaviour.
As the famous WW2 poster says – ‘keep calm and carry on.’ The market has been through changes before and will continue to do so. We can get through this.
* Rob Smith is managing director of Hunters lettings and sales agency *
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Disgusting & disgraceful behaviour by Politicians / Regulators and landlords Organisations.
Who are they kidding its an all out attack to destroy us plain & simple.
We are heading for the worst Recession in 30 years virtually caused by them.
Its not fairer Renting and designed never not to be driving out landlords, forcing up Rents this is what they call fairer.
So do this at the worst possible time when Mortgage’s are rampant, What did you think was going to happen Mr Gove but of Course you knew because that was the idea.
Redress Scheme what is this no one telling us are you going to Redress landlords ?.
Mediation what nonsense is this more piggies in the middle why don’t you be marriage councillors.
The Mayor Mr Sadiq Khan another leach robbing the C/tax payers and every C/tax payer on every property and me alone £627.00 on just one property.
Then at the worst possible time puts the boot in with ULEZ / LES another £3k pa +.
The Congestion & Pollution that
he caused blocking off Roads, narrowing Roads. Creating no go zone’s forcing traffic on other Roads already busy causing more blockage, 20 MPH to try and stop to rubbish Asphalt crumbling away that was placed under his watch, people complain about pot holes but do ask why.
Twin bicycle lanes to take up half the Road and not a bike to be seen and traffic brought to a standstill deliberately.
Surely we can’t be in a
Recession with so many good deeds.
I can smell Mr Rob Smith's panic from here as he watches his business implode
Mr Smith does make some good points but I suspect many of the Landlords who read this will see this as being very self serving.
"it is important that there are no short-sighed knee-jerk reactions – i.e panicked sales of properties" translates to "dont sell your properties because I will not have a business anymore.
The writer fails to mention what has actually happened in Scotland:
Workers on short assignments are using the 28 day notice period to avoid paying higher level short term rental rates. Astute holiday makers are also trying this. The two solutions curbing this to some extent is to ensure the property isn't nearly as well equipped as normal short term rentals and local agents operating and sharing informal black lists to cut down on employers trying to save money by repeatedly using the 28 day notice period.
A bunch of students who won't stay indefinitely and have several solvent guarantors are now preferred to families who want to stay long term. However there is now such a shortage of rental properties that over 900 groups of students who left things to the last minute were chasing one flat last September.
Edinburgh University was advising students without accommodation lined up to defer for a year but since current student tenants don't plan ahead, prospective student tenants also can't plan ahead and reserve a flat for the following year.
This lack of planning has exacerbated the shortage of long term rental properties particularly in Edinburgh and St Andrews where a hybrid model used to work well with winter student lets, refurbishment in early June and summer lets to tourists.
Many hybrid Landlords got fed up with the students failing to cooperate and plan ahead and moved to short term rentals only.
Students who used to rent in the old town or city centre are now displacing families in the suburban residential areas. Neighbours in both the suburbs and the city centre are not happy with the changes in tenancy profile.
Finally the massive shortage in rental properties has increased market rates for the best properties by 30% in 2018 and again this year. My best 4 bed flat has seen its monthly rent rise from £1600 in 2017 to £2100 in 2018 to £2800 in 2023.
I'm sticking with renting to students, not families, and will increase rents by as much as I can get at every opportunity from now on whereas I rarely increased rents other than when the tenants changed.
Landlords who plan ahead and are well organised can prosper under the new rules but the real winners are the rogue tenants so beloved of Shelter, Generation Rant, Acorn and other rabble rousers who make a lot of money whilst harming decent tenants, especially families!
My investments are in Scotland, so putting rents up are not an option during a tenancy.
These pricing controls, State intervention is not compensated in anyway, unlike energy.
Surely shelter is more important than energy.. See Maslows hierarchy of needs.
Peter
That's why I no longer rent to families or others wanting to stay indefinitely.
Ideally I want final year students so I can increase the rent for a new group the following year. I know many others who now do the same and those who can't let to students are selling to owners who will typically have a much lower occupation density with several rooms rarely occupied thus adding further to the shortage of rental properties.
Politicians and Shelter etc. couldn't have done more harm to decent tenants if they had tried!
I genuinely believe there will be a major U turn in sentiment and policy as happened when the Irish Republic turned formerly well maintained rental properties into run down slums. I saw some for myself a few years ago.
Of course agents want PLL's to carry on. They don't have the capital risks. They are dependent on LL's.
I only once used an agent to acquire a tenant for one of my properties, never again. They don't have the same concern over who lives in my investment, they just want their fees. I never have used an agent for anything else, they just add to costs.
The new legislation is not the main problem here. The main issue is rising interest rates and rent caps. Government is happy to subsidise energy suppliers but not shelter providers.
I'm gradually selling up as my fixed rates end, this new legislation is largely irrelevant to my decision.
TRUST YOU : EVEN WHEN ALL POINTS TO YOU RUINING US.
GET OUT, PUT YOUR MONEY WERE IT'S OBVIOUSLY WELCOME
(1 year and couting on an undefended claim, then 6 months more for Baliffs. 20 weeks to open a message & a pet Duty Solicitor helped by Judges that know how to ruin Landlords with now 1.5 years of arrears)
I've read the bill and, l think, is deliberately badly drafted. It can easily, and will be altered, after it's introduction, by ministers. Standby for sequestration of your assets.
I am selling up and no snake 🐍 oil salesman will change my direction.
Letting companies should be afraid. very afraid.
The Smaller landlords are selling up, (the ones who use letting agencies)
and The big corporate boys are buying it all up, (and they wont be using those letting agencies).
So they say Rents are rising and property prices are falling nothing makes sense.
Self serving article.
It’s all bad news. I don’t trust anything I’m told anymore.
With ASBs you need evidence. What exactly will judges accept. Not much less than I’d required for a conviction as per the present situation. Again, I’ll keep my S21 thanks.
12 rate rises also means 12 tax rises for private individual landlords taxing the debt, not applicable to Companies waiting in the wings to take over.
The Aim of the Government has been to drive out Private Landlords especially the smaller one .
The Housing crisis has been caused by them . They are not attempting to create a fairer rental Market, the system was working just fine before before they started attacking us with Taxation and Legislation.
The People loosing the most are the Tenants and Landlords .
There is nothing in the Renters reform Bill that would give any Landlord confidence to stay in Buy to Let . And certainly not to invest further.
As for Scotland they had to put in eviction ban which is stopping Landlords selling up .
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