Everything you need to know about that Renters Reform Bill whitepaper

Everything you need to know about that Renters Reform Bill whitepaper

So it’s finally here. The long-awaited whitepaper for the Renters Reform Bill, A Fairer Private Rented Sector, belatedly landed last week and immediately raised eyebrows across the sector.

The government, which heralded its arrival with great fanfare, called it “the biggest shake-up of the private rented sector in 30 years”. Michael Gove looked like the cat that got the cream as he announced a “generational shift that will redress the balance between landlords and tenants” whilst helping people to “level up”. 

The proposed legislation will now make its way through parliament and we can expect lots (if not all) of it to become law in the not too distant future. This will give tenants new protections, help landlords to repossess properties when they have good reason to, and ultimately create a new ‘front door’ for the private rented sector (PRS) in the form of a new property portal. There was even some good news for dogs and cats. 

Let’s run through the whitepaper’s nine main proposals - starting with the one that will inevitably get the most attention…

Section 21 to be abolished

Whereas some of the announcements caught the media off-guard, this proposal was universally expected and welcomed. It means, of course, that landlords will now have to give a valid reason for evicting tenants.

The government hopes this will give tenants more confidence to question unfair rents and poor living conditions, whilst incentivising landlords to resolve issues rather than simply giving tenants the boot.

Section 8 strengthened

After strengthening tenants’ rights by sending section 21 back to hell, the government has tried to strike a balance by beefing up landlords’ right to manage their properties.

The newly buff section 8 will make evictions mandatory when tenants fall behind on their rent by two months on three separate occasions. It will also be easier for landlords to evict troublesome tenants for criminal or anti-social behaviour. 

Decent homes standard

The whitepaper has promised that all homes in the PRS must be kept in good condition and free from health and safety hazards. This one is well overdue because there are already minimum standards for social housing in the UK.

Significantly, the government has also reaffirmed its aim to make all rented properties more energy-efficient (at least an EPC of C) by 2030. Naturally, eco-warriors like us absolutely love this one.

Notice periods doubled

In more good news for tenants, landlords will now need to give two months’ notice (rather than one) to bring tenancies to an end. However, tenants will need to give two months’ notice, too (although they won’t need to give a reason). The flipside for landlords is that the longer notice period should help to shorten costly void periods.  

The government also wants to outlaw automatic rent increases to protect tenants from the worst of the cost of living crisis - a noble aspiration. 

Periodic tenancies

Are you a fan of rolling contracts with no set end date? That’s what a periodic tenancy is. And the government wants all tenancies to be like this one day for the sake of simplicity. Interestingly, the government is proposing that tenants should be able to end a tenancy without owing full rent if the property is subpar or unsafe.

New Ombudsman

The new government-approved Ombudsman will settle disputes and order wrongdoers to either apologise, take remedial action, or pay compensation up to a whopping £25,000.

It will be mandatory for all landlords to become members of this ombudsman scheme whether they use a letting agency or not. And those who ignore the ombudsman’s hammer of eternal justice could get banned. 

Blanket bans on excluding children or those on benefits

Talking of bans, the government wants to prevent landlords from automatically banning families with children or those receiving benefits from their properties. The government says it will look at protecting other vulnerable groups, too. How very progressive. 

Pet tolerance

Should landlords have a ‘no pets’ rule? It’s something we’ve debated ourselves. However, the government no longer wants to give landlords a choice: the whitepaper has proposed preventing landlords from unreasonably withholding consent.

The silver lining, however, is that landlords will be able to make pet insurance compulsory so that any damage is covered.   

Property portal

This one’s a bit woolly at the moment, as the government hasn’t yet explained how the portal will work. The basic idea though is that it should help good landlords to prove that they’re on the level.

The new portal should serve two purposes: (a) to serve as a register, where all rental properties are tracked, and (b) to serve as a central information hub where landlords (and possibly tenants) can look up their rights. There might be some hook up with the existing database of rogue landlords, too.

Our initial reaction

This whitepaper has arrived with a much bigger bang than anticipated. The unexpectedly comprehensive proposals are making a lot of noise and tenants should feel pleased with its contents. Having said that, however, landlords shouldn’t panic just yet. The government has promised more consultation and discussion before the proposals become law.

Although some of the proposals favour tenants - for example, it seems a tad unfair that tenants won’t need to give a reason for ending a tenancy whereas landlords will - at least the bill provides some clarity. What’s more, doubling the notice period to two months whilst beefing up section 8 should provide landlords with some comfort. 

What has been the reaction across the sector? Well, those representing tenants seem really happy. For example, Alicia Kennedy of Generation Rent has claimed that this legislation could “improve the lives of millions throughout England”.

Ben Beadle from the National Residential Landlords Association, on the other hand, has argued that, “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”.

And therein, in our humble opinion, lies the rub. The broader context here is that the PRS is slowly shrinking and the country is going through a housing crisis. Consequently, anything that might convince landlords to leave the sector isn’t going to help matters.

The government, therefore, finds itself in a tough spot. Whilst it’s only fair that tenants enjoy more protections, landlords have become increasingly concerned that legislation works against them. Anything that exacerbates this perception could persuade more landlords to leave the sector and dissuade others from joining it. 

As a result, we’re going to meditate on these proposals, let them marinate, and discuss them in more detail on our next Residential Expert Podcast with former Propertymark chief executive, Mark Hayward. If anyone can bring insight and clarity in these crazy times, it’s him.

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