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Tue, 20 October 2020

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After coronavirus, long term solutions are required to tackle the private rented sector

After coronavirus, long term solutions are required to tackle the private rented sector

The Government have the hard task at trying to balance the interests of both tenants and landlords, writes Josh Grundy. | PA Images

Josh Grundy | Dods Monitoring

5 min read

Future legislation on rental reform could cover a lot of ground including property safety, short-term lets, Airbnb and rogue landlords.

Housing policy is always topical on the domestic policy agenda no matter which party is in government. For the Conservative Party, homeowners are the traditional priority, whereas Labour tend to focus on social and affordable housing.

However, with 4.6m, or 19 percent of homes, now privately rented, both main parties have had to direct attention and policy to this area of the housing market in recent years. Following the Budget last month, Housing, Communities and Local Government Secretary Robert Jenrick confirmed that a Renters Reform Bill would be coming to the Commons during this Parliamentary session. This article will consider what could be legislated on and how policy reform could affect the future of the private rented sector.

The prevalence of the private rented sector was recently highlighted as a result of the ongoing Covid-19 crisis. The Coronavirus Act has extended the notice periods that certain tenants in England and Wales are entitled to receive when a landlord is seeking to recover possession of their homes. The Government were initially criticised for their proposals, with Labour’s Shadow Housing Secretary John Healey stating that “This is not an eviction’s ban, as Labour argued for, and renters were eventually promised by Boris Johnson. This legislation does not stop people losing their homes as a result of coronavirus, it just gives them some extra time to pack their bags.” However, last week the Government changed course and stopped all current court action and housing possession action. 

However, these measures are not designed to continue once the current health crisis has passed and more concrete, long term solutions are required to tackle problems in the private rented sector.

As this crisis has shown, evictions is a problem facing some private renters. The Conservative 2019 manifesto committed to a  ban on all no fault evictions, but there is ongoing disagreement in how best to implement this change, and whether it is the most appropriate action

Section 21 (S.21) of the Housing Act 1988 allows a landlord to ask a tenant to leave a property without providing a reason to do so, as long as they give a two month notice period. Boris Johnson’s predecessor, Theresa May announced her intention to scrap S.21 in 2019, stating: “This important step will not only protect tenants from unethical behaviour, but also give them the long-term certainty and the peace of mind they deserve.” She did however reassure landlords that they would still be able to bring tenancies to an end if there was a legitimate reason to do so.

However, since a consultation was launched last year on implementing the Government’s decision to remove S.21, there have been many vocal critics of this policy direction. The Residential Landlords Association conducted a survey which found that 84 per cent of landlords had used it because of tenants rent arrears and that S.21 allowed them to remove them easily. Current alternatives to S.21 including s.8 of the same act, can often be a timely process which involves judicial proceedings.

Many landlords have argued that reform to the system is needed so that they can repossess a property in legitimate circumstances before S.21 is abolished. Some have warned that landlords could leave the sector all together, which could drive up the costs of other rental properties and reduce the amount of homes available for rent and social rent.

However, the need to end no fault evictions does need addressing, with tenant organisation like Generation Rent stating that S.21 is one of the key causes of homelessness in the UK. Although this is contested by landlord organisations, there is an argument that the threat of S.21 can deter tenants from raising complaints or concerns with their landlord.

One thing is clear, the Government have the hard task at trying to balance the interests of both tenants and landlords, which shall make upcoming debates about the legislation interesting to keep tabs on. 

Another measure that is likely to be included in the Renters Reform Bill is the lifetime deposit, this was also proposed in the most recent Conservative Party Manifesto. This would see a tenants deposit moving from one tenancy to another, rather than a tenant having to save up for another deposit before moving home, this has been generally welcomed.

With no confirmed date for the Bill to be laid before Parliament, there continues to be speculation on what else the legislation and preceding debates would cover. It is clear that future legislation on rental reform could cover a lot of ground including property safety, short-term lets, Airbnb and rogue landlords. Lib Dem MP Wera Hobhouse for example, has stated that she would table an amendment to the Renters Reform Bill to provide a mechanism in law to prosecute landlords who pursue sex for rent arrangements. As well as the renters reform bill, MHCLG are also expected to publish a building safety bill before the summer recess.

 

To download the complementary report lookahead click HERE.

Read the most recent article written by Josh Grundy - Is the Government doing enough to protect people from falling into homelessness?

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