The biggest changes to the Private Rented Sector (PRS) for over 30 years have been announced today in the Fairer Private Rented Sector White Paper.
Based on this document new legislation will include:
- Scrapping of Section 21 and introduction of new possession grounds for landlords.
- Converting Assured and Assured Shorthold tenancies into periodic tenancies. The new tenancies can be ended by the tenant with two months’ notice and by landlords with new possession grounds.
- PRS subject to the Decent Homes Standard.
- Introduction of a new Private Renters’ Ombudsman to settle disputes informally.
- Launch of an online Property Portal to provide information to landlords and tenants regarding their obligations and rights.
- Abolishing rent review clauses (while retaining the ability to increase rents annually).
- Outlawing of blanket bans on renting to families with children or tenants on benefits.
- Requirement that landlords cannot unreasonably refuse the keeping of pets by tenants.
- Reforming the court system to ensure cases are handled quicker.
The proposals will be introduced in three stages:
Stage 1. Introduction of bill into law – in maybe 12-24 months.
Stage 2. New tenancies subject to the new legislation 6 months after stage 1.
Stage 3. Existing tenancies subject the new legislation 6 months after stage 2.
There is a concern from landlord bodies such as Propertymark and the NRLA that the proposals in the White Paper lack the necessary details to assess the potential impact on landlords and the wider sector.
Many proposals have been the subject of lobbying by tenants’ rights groups and landlord groups over the last three years. The government is still to have further stakeholder meetings before moving forward with creating a bill to make the proposals law.
The Fairer Private Rented Sector White Paper can be viewed using the link below:
Helpful explanations about the new policies on the ‘New deal for renting: government response’ web page are available using the link below:
Ben Beadle, chief executive of the National Residential Landlords Association, said: “Whilst headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful, the detail to follow must retain the confidence of responsible landlords, as well as improving tenants’ rights.”
“We will be analysing the government’s plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.”
“The eventual legislation needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”
Nathan Emerson, Propertymark CEO, commented: “After waiting three years to see exactly what this reform will look like, we’ve now got a set of proposals titled ‘The Fairer Private Rented Sector White Paper’. But there are some elements that don’t appear to be so. How is it fair that a tenant can simply end a tenancy at a time of their choosing, but an agent or landlord has to present a valid reason that is defined in law?”
“Now we have the detail of what’s being proposed, we will be closely scrutinising it and working with Ministers to help them understand how on a practical level it will impact our letting agents members and their landlords.”
“Our sector provides around 4.4 million households in England with a place to live. Property is a good long-term investment but the number of property owners choosing to withdraw from this area is growing. That’s the result of a decade of tax and regulatory burden that simply does not incentivise investment, especially for single property landlords who make up 43% of the market.”
“The private rental market is already under huge strain with renters outstripping available properties and we need to be able to attract new investment.”
“If Ministers really do want to create a ‘fairer private rented sector’, they must work with us to ensure these reforms are carefully balanced and any interventions to achieve short-term objectives do not constrain the market in the longer term.”