Rental Reform White Paper – everything you need to know

The government has released its long-awaited Rental Reform White Paper, which sets out some major changes to the rental industry.

The ‘A fairer private rented sector’ white paper sets out the government’s long-term vision for a private rented sector (PRS) that it says is fit for the 21st century and delivers a better deal for tenants. This includes plans to:

• abolish Section 21 ‘no-fault’ evictions and introduce a simpler tenancy structure
• apply the Decent Homes Standard to the PRS for the first time
• introduce a new Property Portal to help landlords understand their obligations
• introduce a housing ombudsman covering all PRS landlords and providing redress for tenants

Alongside this white paper the government has also published six other documents including:

• the government response to ‘Considering the case for a Housing Court’ call for evidence which sets out why we don’t think we need a separate housing court and how we will be improving the possession process
• the government response to ‘A new deal for renting’ consultation which covers the removal of section 21 of the Housing Act 1988 and improving landlord possession grounds
• the government response to the ‘Tenancy deposit reform’ call for evidence which sets out support for the Tenancy Deposit Working Group’s consideration on deposit system improvement
• Local authority enforcement in the private rented sector: headline report which explores local authority enforcement in the private rented sector
• Property guardian: headline report is a study that explores property guardianship in the private rented sector
• A segmentation analysis of private renters is a research report that groups privately rented households based on economic and family circumstances that impact their ability to access high-quality housing

The government insists that the fairer private rented sector white paper aims marks a generational shift that will redress the balance between landlords and 4.4 million private rented tenants. It provides new support for cost of living pressures with protections for the most vulnerable, and new measures to tackle arbitrary and unfair rent increases. This, the government says, is part of a wider reform agenda to improve lives and level up the country, delivering more housing and greater protections for tenants and homeowners.

The majority of tenants enjoy safe and secure rentals, but for the 21% of private renter and households who currently live in unfit homes, this ‘New Deal’ will extend the Decent Homes Standard to the private sector for the first time, levelling up opportunities. This means homes must be free from serious health and safety hazards, and landlords must keep homes in a good state of repair so renters have clean, appropriate and useable facilities.

Section 21 evictions – that allow landlords to terminate tenancies without giving any reason – will be outlawed. More than a fifth of private renters who moved in 2019 and 2020 did not end their tenancy by choice, including 8% who were asked to leave by their landlord.

Measures published yesterday also include:

• Helping the most vulnerable by outlawing blanket bans on renting to families with children or those in receipt of benefits
• For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent and enabling tenants to be repaid rent for non-decent homes. This will make sure tenants can take their landlord to court to seek repayment of rent if their homes are of unacceptable standard
• Making it easier for tenants to have much-loved pets in their homes by giving all tenants the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse
• All tenants to be moved onto a single system of periodic tenancies, meaning they can leave poor quality housing without remaining liable for the rent or move more easily when their circumstances change. A tenancy will only end if a tenant ends or a landlord has a valid reason, defined in law
• Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified
• Giving councils stronger powers to tackle the worst offenders, backed by enforcement pilots, and increasing fines for serious offences

In addition, the estimated 2.3 million private landlords will have greater clarity and support through the following measures:

• A new Private Renters’ Ombudsman will be created to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court
• Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to
• Introducing a new property portal that will provide a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators

The government claims that these reforms will help to ease the cost of living pressures renters are facing, saving families from unnecessarily moving from one privately rented home to another hundreds of pounds in moving costs.

The government says that it has already taken significant action over the past decade to improve private renting, including reducing the proportion of non-decent private rented homes from 37% to 21%, capping tenancy deposits and banning tenancy fees for tenancy agreements signed after 1 June 2019, and introducing pandemic emergency measures to ban bailiff evictions.

Yesterday’s measures will form part of the Renters Reform Bill as announced in the Queen’s Speech, to be introduced in this parliamentary session. This will deliver on our commitment to give renters a better deal and make the private rented sector fit for the 21st century with safer, more secure and higher quality homes.

Levelling Up and Housing Secretary Michael Gove said: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe and cold properties, with the threat of unfair ‘no fault’ evictions orders hanging over them.

“Our new deal for renters will help to end this injustice by improving the rights and conditions for millions of renters as we level up across the country and deliver on the people’s priorities.”

While the majority of private rented homes are of good quality, offering safe, comfortable accommodation for families, the government states that conditions of more than half a million properties – or 12% of households – pose an imminent risk to tenants’ health and safety, meaning around 1.6 million people are living in dangerously low-quality homes, driving up costs for our health service.

The government argues that the sector offers the most expensive, least secure, and lowest quality housing to millions of renters, including 1.3 million households with children and 382,000 households over 65. Rents are also rising at their fastest level for five years. This can damage life chances and hold back some of the most deprived parts of the country.

Yesterday’s move marks the latest phase in delivering on the government’s levelling up missions, taking serious steps to halve the number of poor-quality rented homes, across both private and social tenures, by 2030, according to Gove.

Last week the government introduced the Social Housing Regulation Bill which means failing social housing landlords could face unlimited fines and Ofsted-style inspections.

In a major reset of power between tenants and landlords, residents will be able to demand information and rate their landlord as part of new satisfaction measures. Taken together with yesterday’s renters reform white paper, the Bill will form a key part of the government’s mission to level up across the country and deliver on the people’s priorities.

SOURCE: Property Industry Eye | JUNE 17, 2022 | MARC DA SILVA