Renters Reform - What will this mean for the PRS?
A lot of discussion has taken place since June 2022 when the government announced that the PRS would be Levelled Up, but what does that actually mean in practice and how will the Renters Reform Bill impact landlords, tenants and the PRS?
Firstly, one of the key points to consider is to ignore the trade press and national press who lead with headlines and never factor in the detail.
Abolishing Section 21
A lot of emphasis has been placed on ‘no fault Evictions’ when in fact what should actually be referred to is the service of notice to obtain vacant possession’. There is no way of evicting a tenant just by serving a section 21 and to clarify, the eviction process takes a lot longer than a mere two months.
The Section is the first step to a landlord gaining possession but with ‘no reason’ given, therefore the abolition of this notice will mean that the landlord will be required to state ‘grounds’ (reasons) should they wish to regain possession. This would require Section 8 of the Housing Act 1988 (1996) to be amended.
The Old Cliche - Knowledge is Power rings True
How many times have we heard that knowledge is power? Countless no doubt and now more than ever this rings true in the Private Rented Sector (PRS). Twenty years ago the PRS was not deemed as important as estate agency commercially and also by the consumer. The PRS had a stigma attached to it that only those who could not get on the property ladder would have to rent - the UK was a nation of would be homeowners.
Yet, the recession in 2009/2010 changed this perception, driven predominantly by Supply V Demand, repossession and the lack of housing stock. Not only has the demand for rental property increased, the Letting Sector became an industry in its own right and Letting agencies and lettings departments played a key role in the property sector.
Report on the PRS published by Public Accounts Committee
The recent report published by the Public Accounts Committee reports that despite record rent increases 13% of rented homes “pose serious threat to the health and safety of renters” - costing the NHS an estimated £340 million a year
In a report today the Public Accounts Committee says it is “too difficult for renters to realise their legal right to a safe and secure home” and that local authorities - constrained by a lack of support from the Department for Levelling Up,
Housing and Communities (DLUHC) and its approach to licensing landlords - do not have the capacity and capability to provide "appropriate and consistent protection for private renters”. According to the report, the private rented sector in England has doubled in size in the last 20 years and now houses 11 million people.
Further changes to Notice Periods and Evictions
Today Robert Jenrick, Housing Secretary made a further announcement that the six-month notice periods and bailiff enforced eviction bans will be extended to 31 May 2021 to protect residential and social tenants as the country moves through the roadmap. The Housing Secretary announced that the Government has - "taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280 billion economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent. These measures build on the government’s action to provide financial support as restrictions are lifted over the coming months – extending the furlough scheme, business rates holiday and the Universal Credit uplift."