Gaps in the Renters Reform Bill risk leaving vulnerable tenants unprotected
Prior to becoming the Member for Harrow East, I was in local government for over 20 years, which inevitably spurred an interest in the housing sector.
I have been a member of the Levelling Up, Housing and Communities (LUHC) Select Committee (or equivalent) since 2010, chairman of the APPG for Ending Homelessness and have initiated two bills – the Homelessness Reduction Act of 2017 and the Supported Housing (Regulatory Oversight) Bill which is about to complete its journey through the Lords.
I am pleased to hear that the government is finally championing its manifesto pledge to reform the rental market through the long awaited Renters Reform Bill. However, whilst I welcome the initial intentions, I am concerned that there is a vast amount of work still needed to address the potentially unintended consequences of such new measures.
Landlords will seek an alternative route to jettison tenants, most likely through a Section 8 eviction
The proposed bill sets out to abolish Section 21 evictions, a notice which initiates the legal process to end an assured shorthold tenancy through no fault of the tenants. My initial, substantiated concern with this approach is that landlords will seek an alternative route to jettison tenants, most likely through a Section 8 eviction.
This will go via the courts, which already have a backlog in excess of 18 months and will leave tenants with County Court Judgements (CCJs) against them. Landlords will then refuse to issue new tenancies to people with CCJs and tenants are then faced with homelessness. Moreover, from the perspective of the landlords, they may be then faced with tenants living rent free and unable to be evicted for more than 18 months whilst they wait for the case to be heard in court. It is therefore crucial that measures are taken to speed up the process of legal eviction where appropriate.
Further, on the introduction of my aforementioned Homelessness Reduction Act, one of the conditions I was adamant on was that when served a Section 21 notice, this automatically triggers a duty on local authorities to assist in preventing homelessness and provide necessary support. Of homelessness cases presented to local authorities, 48 per cent are caused through a Section 21 notice being served. There are absolutely no accommodations in the bill to extend this duty for Section 8 evictions and thus with implementation, it makes this aspect of the HRA redundant and drastically more people will be forced on the streets with no support from local government.
Landlords may also seek to switch their properties from assured shorthold tenancies to the Airbnb market where rents are far higher for short term letting. The government has removed many of the tax advantages for landlords to invest in property for the rented market and landlords are frequently receiving less than four per cent return on their investment, so a loss of income from a tenant on non-payment is serious.
The bill does not take into account that many tenants require, or prefer, a short term tenancy. This may be due to their student status or working in an area for only an interim timeframe. There are so many unanswered questions, for instance if a student wishes to live with others who are not students, what protections are in place? Further, why do students living in halls have no protections but those in private accommodation do? Under the proposals, students can give two months’ notice at any time, making it exceedingly difficult for their housemates to find a replacement, subjecting extreme pressures or forcing them to pay more rent in compensation for the empty room.
A recent select committee report documented these concerns, advising that a likely consequence of the rental market falling out of kilter with the underlying academic cycle will be that many landlords leave the market entirely. This will lead to a severe contraction in the supply of student accommodation, driving up rents and once again disadvantaging tenants. As 94 per cent of landlords own only one or two properties, a contraction of the provision will have a serious impact on rents and property availability.
I am concerned that several aspects proposed in the white paper are not included in the published bill, such as a ban on landlords refusing to let to those on benefits or with children, strengthening local authority enforcement powers and ensuring that private rented accommodation is of a decent standard.
Whilst I recognise the importance of increasing the rights of tenants and getting this ball rolling, it is crucial that we strike a balance. We must ensure the unintended consequences are appropriately addressed and do not pose a more extensive problem than the bill seeks to fix.
I hope that the government continues to listen to stakeholders and the backbenchers to recognise and resolve the cumbersome amount of unanswered or simply ignored aspects that the bill rakes up, most crucially to ensure the most vulnerable in society are protected.
Bob Blackman, Conservative MP for Harrow East and chair of the APPG for Ending Homelessness
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