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Renters Reform Bill: An Ongoing Tale Of Promises & Problems

Renters Reform Bill: An Ongoing Tale Of Promises & Problems

Back in 2019, the Government promised a ban on so-called no-fault evictions. Section 21 was to be outlawed. While some housing campaigners celebrated the proposal, the private rental sector was thrown into a state of uncertainty and confusion which has continued to this day.

A third reading of what has become the very controversial Renters (Reform) Bill has just taken place in the House of Commonswith over 200 amendments up for consideration. The House of Commons voted to pass a heavily amended Renters Reform Bill to the Lords for scrutiny there. It is anticipated the Lords will make further amendments before passing back to the Commons.

The Renters Reform Bill brings significant implications for the future of the rental sector in the UK. The bill, which has already passed through the Commons, aims to address longstanding issues affecting tenants and landlords while reshaping the dynamics of the rental market.

One of the bill’s key provisions is the abolition of Section 21 no-fault evictions, a move intended to enhance tenant security and stability. By eliminating landlords’ ability to evict tenants without a valid reason, the bill seeks to empower renters and provide them with greater certainty in their housing arrangements. An Opposition motion to end the Section 21 notice as soon as the Bill became an Act was defeated, so the original intention of the Section 21 only going after sufficient court reforms remains – for now.

In addition to ending Section 21 evictions, the bill introduces measures to improve housing standards and tenant rights. This includes the establishment of a decent home standard for the private rented sector, ensuring that rental properties meet minimum standards of safety and quality. The bill also grants tenants the legal right to request permission to keep pets in their rental homes, recognizing the importance of accommodating pet ownership in rental policies.

Furthermore, the bill strengthens landlords’ grounds for possession in cases of rent arrears or property sales, providing clearer guidelines for evictions while protecting tenants’ rights. It also establishes a new Private Rented Sector Landlord Ombudsman to address disputes and grievances between tenants and landlords.

As the bill moves to the House of Lords, it is likely to face further scrutiny and debate. While many support its objectives of enhancing tenant protections and improving housing standards, concerns have been raised about the indefinite delay in abolishing Section 21 evictions and the potential impact on the courts system.

Nevertheless, the Renters Reform Bill represents a significant step forward in reforming the rental sector and creating a fairer and more balanced environment for both tenants and landlords. As it undergoes further review in the House of Lords, stakeholders will continue to closely monitor its progress and advocate for measures that promote the interests of all parties involved in the rental market.

Other amendments include changes to the grounds for possession of student properties, which should ensure the student-let market can continue to operate effectively.

Another important change is a proposal for an initial six-month tenancy term, which will give some much-needed reassurance to landlords. Sekhon also welcomed a review of the effectiveness and cost of council licensing schemes and their role alongside the proposed property portal.

There’s also a proposed expansion of homelessness prevention duty placed on local authorities to include cases where a tenant has been served a valid Section 8 notice.

Those supporting renters’ rights will, no doubt, be claiming that the proposed amendments represent a watering down of the Government’s plans. But from the landlord’s perspective, the proposals are practical. Propoly’s Sim Sekhon believes they will help to ensure a property rental sector that works for both landlord and tenant. He told us, ‘The legislation has provoked strong views from the outset because landlords have legitimate concerns. I am pleased that the Government has responded to some of them.’

Amendments aside, Sim Sekhon believes the bill still has a long way to go. Indeed, he believes the abolition of Section 21 may not be achieved for several years. The proverbial spanner in the works is the inability of the under-resourced judicial system to cope with the sheer volume of legitimate possession cases, which has prompted the calls for a review of the entire process, its operation and its funding, as detailed in one of the amendments. Until that’s complete, progress on the abolition of Section 21 cannot be made. What’s more, the role of local authorities in the regulation of the private rented sector means that reform is complex.

The bill has been controversial since it was originally drafted, with many landlords objecting to what they saw as an unfair bias towards the rights of tenants. Many have already responded by leaving the sector, but from May 1st, landlords who have had enough will find it more costly to quit. Court fees for all possession applications are set to rise in the region of 10–15%, with those needing to secure the services of a bailiff facing a steep increase in costs.

The debate on this bill is far from over, but it does seem that progress is being made. The uncertainty that has disrupted the lettings industry may be coming to an end, but according to Sim Sekhon, we shouldn’t hold our breath.


Scrapping Section 21 - Mismanaged from start to finish

The government has been accused of mismanaging reforms to no-fault evictions saying “It’s created uncertainty upon uncertainty."

Theresa May first made the pledge to scrap Section 21 (S21) notices on 15 April 2019 and it was also in her successor Boris Johnson's manifesto.  But last month, the government announced an indefinite delay to the plan to ban them, pending court reforms.

A Section 21 order allows landlords to evict tenants with just two months' notice, without providing a reason for doing so.

Housing campaigners say they are a major contributing factor to rising homelessness.

But many property experts in the sector claim it will lead to an exodus of landlords, at a time many are already leaving in droves. Property expert Jonathan Rolande, founder of House Buy Fast says “the entire process has been mismanaged – it has taken too long. It has created uncertainty upon uncertainty. Of the thousands of landlords I have dealt with over the years, only a tiny fraction would not pass the “would I want you to be my landlord? test.

Landlords are not charities but almost without exception, those I have dealt with have wanted to obey safety and contractual legislation, are sympathetic to tenants' financial issues, and while no doubt complaining about the cost, keep their properties in good repair. When the government talks of a Section 21 ban what do landlords hear? They hear that they will not be able to get their property back when they want it. They conflate the issue with rent control, which is also mentioned in the news in London and Scotland.  Could it happen here, too?” they ask. Three quarters of individual landlords are over 55 – the spectre of Rent Control and Sitting Tenants is real.

So landlords have been leaving the sector, cashing in at these high prices to beat the ban. Ironically, as a property is worth more empty, many tenants who might otherwise have been secure have been turfed out prior to sale. Since recent rate rises, nobody has replaced these fleeing landlords. The homes have disappeared from the rental market, pushing up competition between tenants and therefore, rents. Many people on all sides of politics, who should know better, have accepted that the ban is a good idea. It seems inevitable that it will come to pass, possibly soon. That is my hope at least, because during this time of uncertainty, whilst the government squirm in an effort to placate all sides, tenants are losing their homes for absolutely no good reason.”

Paul Shamplina gives his reactions to the third reading debate of the Renters Reform Bill:

“Undoubtedly, court reforms are necessary to ensure the system can effectively handle the increase in Section 8 proceedings resulting from the abolition of Section 21. Without adequate preparation, there is a risk of overburdening an already strained legal system, leading to further delays and inefficiencies that could adversely affect both landlords and tenants. In 2019 when the bill was announced my very words were  You cannot ban section 21, until we have clarity the courts can work, so landlords have confidence. 

However, what’s equally crucial is clarity and commitment from policymakers regarding the timeline for implementing these court reforms. Landlords, as well as tenants, require assurance that any changes to the rental landscape will be accompanied by measures to streamline the legal process and provide timely resolution to disputes.

This ultimately impacts tenants by shrinking the pool of available rental properties
It’s important to recognise that the uncertainty surrounding the future of Section 21 has already led many landlords to sell their properties. This trend ultimately impacts tenants by shrinking the pool of available rental properties, leading to increased competition and potentially higher rents. In this context, a clear commitment to timely court reforms is not only crucial for landlords’ peace of mind but also for maintaining a healthy rental market that serves the needs of both landlords and tenants.

A transparent roadmap outlining the steps and timeline for court reforms would provide much-needed clarity to all parties involved, allowing landlords to plan accordingly and ensuring all parties have access to fair and efficient legal recourse. In essence, while I agree that court reforms are necessary to accommodate the almost certain increase in Section 8 proceedings (approximately another 30,000 hearings a year), a clear commitment to when these reforms will be implemented is essential to provide landlords and tenants alike with the certainty and confidence they need to navigate the evolving rental market landscape.”