On 16 June 2022, the government published its long-awaited White Paper on the reform of the private rented sector.
A number of the proposals have wide cross-party support, and it is expected that a number of provisions will pass through Parliament. A Bill is to be drawn later this year following release of the White Paper which is likely to become an Act of Parliament next year.
The main provisions of the White Paper are as follows:
• A ban of no-fault evictions using section 21 notices.
• Assured and assured shorthold tenancies will become a single form of periodic tenancy with fixed term tenancies no longer available.
• Tenants can give two months’ notice to leave at any time.
• Landlords will have to establish a ground to recover possession including mandatory grounds such as a proposed sale of the property or persistent rent arrears.
• Landlords to provide tenants with written terms of tenancy from the outset with penalties to apply in default.
• No contractual rent increases and all rent increases to take effect in accordance with section 13 Housing Act 1988 (i.e., by agreement or by application to the tribunal)
• A ban on landlords to refusing to let to families with children or that are in receipt of housing benefit.
• Tenants to have the right to keep pets.
• Minimum housing standards that all landlords will be required to meet.
• A new property portal that will be help landlords understand their compliance responsibilities as well as giving local authorities and tenants the information they need to enforce against the worst offenders.
• A new ombudsman scheme to deal with disputes between landlords and tenants without needing to go to court.
A number of the above proposals are not new. There has been recent action taken against landlords and/or their managing agents in respect of homes not fit for human habitation, discrimination against tenants in receipt of state benefits and the unreasonable refusal to allow tenants to keep pets.
The most significant reform is likely to be the end to no-fault evictions. The possibility of no-fault evictions has been mooted over several years and there is an inevitability that this change will happen. Such a change would comply with the government’s agenda on levelling up and would help the significant number of younger people who will need to rely upon the private rental sector as a long-term housing solution due to the lack of affordable housing to buy.
Although no fault evictions might prove popular with tenants and pro-tenant organisations, its impact may derail residential investment property as an investment class leading to less housing stock for rent. For instance, if lenders no longer feel secure lending to private residential landlords who have no quick and effective means of regaining control of their properties. It remains to be seen whether the mandatory grounds for possession will be sufficient.
Landlords may also have to seek other routes to obtaining possession including enforcement of other breaches such as nuisance and disrepair if they cannot simply rely upon the no-fault process at the end of a fixed term.
The real detail will be contained in the Renters Reform Bill which is yet to be published. At the moment I expect many landlords will be taking stock and assessing whether to evict unfavourable tenants prior to the likely ban on no-fault evictions and/or to exit the market entirely in view of the tenant-friendly nature of future legislation.
For further information regarding landlord and tenant law, please do not hesitate to contact Mr Bill Dhariwal on DDI: 01489 864 117 or E: bill.dhariwal@lawcomm.co.uk
The contents of this article is for information only and does not constitute legal advice.
