Clarity Not Confusion - White Paper reforms must be detailed

With speculation about what happens next in Westminster at fever pitch, now isn’t the time to make predictions as to how government policy towards the private rented sector may or may not change.

One thing’s clear: significant reform is coming our way. It’s an obvious point to raise, but a necessary one as the time to prepare for the most radical upheavals seen in over three decades starts to come into view. Despite the febrile atmosphere surrounding the corridors of power, private landlords must assume that the Renters’ Reform Act is still set to come into effect.

The object of reform is of course progress, but the outcome can all too often be regression if adequate care is not taken. We all know that the Government’s Renters’ Reform White Paper could be problematic for the long-term interests of landlords if certain steps aren’t taken by the Department for Levelling Up, Housing & Communities (DLUHC) to reassure landlords. Whatever the next twist in the Whitehall saga is, landlords’ interests much be taken into account by policymakers.  

For starters, to prevent more landlords leaving the sector and exacerbating an already serious shortage of rented properties, it is critical that MPs and Ministers consider carefully what impact the plans and these potential changes in rental reform will have on individual landlords. Frequently, PRS reforms seem predicated on the need for more tenant protection, with too little concern for the prospects of landlords, whose investment is vital for the provision of homes.  

The most eye-catching aspect of the recently published White Paper is its formal re-statement that Section 21 evictions are to be scrapped. This is of course no surprise, having been announced numerous times by this government. In broad terms we can also see that Ministers have listened to landlords’ concerns about rent arrears, the need to sell properties with vacant possession, and a number of other legitimate reasons for ending tenancies.  The question that appears to have gone unanswered though, what landlords will be able do to remove anti-social tenants. 

This is a matter which whoever heads up DLUHC over the coming months must provide clarity on urgently. Without an effective mechanism for ending these tenancies landlords will be powerless to remove disruptive and abusive tenants, whilst their victims choose between suffering or leaving their homes to escape the behaviour of anti-social housemates or neighbours. 

Another neglected group would appear to be student landlords. It is vital to consider how the White Paper’s changes will affect student lets. 

The proposed new rules mean landlords will have no certainty that properties let to outgoing students will be vacated in time for the start of a new academic year, meaning they cannot establish tenancies for the new term, creating a domino effect, not only for landlords, but for students and the universities themselves.  

Yet there are some aspects of the White Paper which give cause for hope. The government’s commitment to introduce a new Ombudsman to resolve disputes and tenants is a sign the Government has listened to the NRLA’s call to action in this area and should provide a way to settle disputes without incurring the costs of going to court.  

Aside from these proposals though there is a worrying lack of direction as to what can be done to effectively deal with the ongoing supply and demand crisis unfolding across the sector. With demand for rented accommodation having spiked in recent years, there is little sign that the Government wants to take the difficult but necessary steps to boost the number of available homes. 

According to research published by consultancy Capital Economics (commissioned by the NRLA) the private rented sector requires 230,000 new homes a year across the UK to meet government housing targets. The same research reveals the stark fact that the supply of privately rented housing has fallen by almost 260,000 over the past five years.

The costs of maintenance, professional services, and utilities have increased dramatically over recent months, forcing many landlords to adjust rents accordingly. The current high levels of inflation are making it increasingly expensive to provide rental homes. This is a trend which has been exacerbated by the well-documented shortage of housing of all tenures. 

With a significant regulatory burden weighing down on all landlords, and a tax regime which inhibits investment in the sector, failing to introduce reform in either of these areas will merely compound an already dire situation. 

The last thing the sector needs is confusion. But if the government (whatever form it takes over the coming weeks) doesn’t take steps to restore landlord confidence there is a real risk that landlords will exit the sector seeking more certainty and better returns. Without a private rented sector which is effective, fair and which works in the interests of all, the country will simply be unable to meet its housing requirements over the next decade. 

* Chris Norris is Policy Director of the National Residential Landlords Association *

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