Letting agents will soon face a very different private renting sector once the government’s proposals become law, its new White Paper published today makes clear.
Unlikely to become law until next Spring and coming three years after it was first announced, the ‘A Fairer Rented Sector’ White Paper will sweep in seismic changes to how homes are rented out and managed.
Introducing the document in parliament, housing minister Eddie Hughes said: “We want to change the UK’s reputation as a place to both rent and own a home,” he told MPs.
“Also, we want renters to have the same peace of mind that owning your home gives.”
Michael Gove, Hughes’ boss, prefaces the 80-page document, saying: “This White Paper builds on the vision of the Levelling Up White Paper and sets out our plans to fundamentally reform the Private Rented Sector and level up housing quality.”
It offers up a 12-point plan. This includes:
- Ensuring all PRS homes in the UK meet the Decent Homes Standard;
- Running selective local authority pilot schemes to bolster policing of bad landlords;
- Removing landlords’ rights to evict tenants ‘without fault’ and then give them more powers to evict, but only for established and set reasons;
- Rents will only be allowed to increase once a year;
- Tenants will be able to take poorly-performing and rogue landlords to a single Ombudsman to gain redress, a scheme that all landlords will have to join and pay for;
- The White Paper also promises to reduce the courts backlog for evictions through greater funding and staffing;
- And as announced before, the Government will introduce a property portal for all UK rented homes that will include information from the official rogue landlord database and details of a landlord’s compliance.
It could also be used to stop landlords renting out properties that do not meet minimum standards.
“Requiring landlords to take a proactive approach to property management would benefit those good landlords who already meet basic requirements, while simplifying enforcement for local councils and hitting criminal landlords hard,” the document says.
“We are committed to carefully balancing landlords’ privacy concerns with the need of private tenants to make informed decisions about their housing options when designing a new system.”
- Investigative powers for local authorities are also being increased, as are fines.
- Also, agents and landlords will be prevented from refusing tenants on benefits without good reason;
- Any tenant who wishes to live with their pets will have a ‘right’ to do so, albeit subject to a reasonability test.
- The government will work with companies to developer a ‘renting passport’ to enable poorer tenants to move home without having to stump up two deposits.
- But the most radical changes are those around tenancies and tenure.
The document reveals that Ministers plan to give private landlords six months’ notice of its first implementation date, after which all new tenancies will be periodic and governed by the new rules, ushering out ASTs.
By periodic, the government means fixed-term tenancies that will be pre-agreed between landlord and tenant, with tenants required to give two months’ notice at any time during that period, and landlords only able to evict them under circumstances including both ‘fault’ (i.e. rent arrears or anti-social behaviour/damage) or no-fault (i.e. to move back into a property or sell it).
“Periodic tenancies will also enable tenants to leave easily without remaining liable for the rent in unsuitable and unsafe accommodation,” the document says.
What are industry figures saying?
Reflecting on what’s expected from the Government’s Fairer Private Rented Sector White Paper, Isobel Thomson, safeagent’s chief executive, says: “It’s good to see this first important step from Government. We welcome greater support and powers for local authorities in regulating private renting in their areas.
“But let’s not forget – most landlords are already doing a great job in providing excellent homes. Agents are facilitating that, making sure landlords understand their responsibilities, and tenants understand their rights.
“With the sector already doing much good work, balance will be key in the changes brought forward. Rental properties are in increasingly short supply and we have a growing cost of living crisis. It’s important that changes to eviction powers balance security of tenure with some flexibility for landlords.
“Otherwise, we risk a major exodus of small independent landlords from the market and it should not be forgotten if it was not for them there would be an acute housing shortage.
“Focus now must be on making sure the policy that follows the White Paper works in practice, for tenants, landlords and agents. That relies on us all on working together to help to shape and effect meaningful change.”
Tom Mundy (pictured) of Goodlord adds: “We’re pleased that the ability to evict anti-social tenants or those who don’t pay their rent has been safeguarded.
“But other changes are causes for concern, such as moving all renters onto a single system of periodic tenancies and how the scrapping of Section 21 will work in practice.
“Agents need to get their systems and compliance processes massively tightened up and streamlined if they want to be able to run an efficient business which isn’t tripped up by these rules. Forward-thinking agents will, as ever, come out on top despite the new hurdles this proposed legislation will create.”
Anthony Codling, founder of Twindig, says: “The Rental Reform Bill as described in the ‘A Fairer Private Rented Sector’ White Paper is a highly ambitious plan to restructure and improve the private rented sector.
“While the main theme appears to be a rebalancing of power away from landlords to tenants, essentially it enshrines the practices and policies followed by most good landlords and professional letting agencies.
“Not all landlords will agree with all of the proposals, but in our view, they work towards the greater good and should lead to a more transparent and better functioning Private Rental Sector. “