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The new white paper discussed in parliament this week proposes significant changes for the private renters market
Housing Secretary comments
What are the proposals?
The government released details on a historic ‘new deal’ in parliament this week which seeks to propose significant changes in the relationships between private renters and landlords in the UK.
Whether the government have one eye on the next election cycle or whether these sweeping changes come as part of the socioeconomic pressure brought on by the cost-of-living crisis, the whitepaper has been described by the Housing Secretary, Michael Gove, as ‘the biggest shake-up of the rented sector for 30 years.
Yesterday, the government website published that,
For the 21% of private renter and households who currently live in unfit homes, this ‘New Deal’ will extend the Decent Homes Standard to the private sector for the first time, levelling up opportunities.
The bill will ensure that all properties that are rented out must be free from serious health and safety concerns. Landlords will be legally obliged to ensure a good state of repair is maintained so that private renters have ‘clean, appropriate and usable facilities’.
What are the proposals for the Renters Reform Act?
There are sweeping changes outlined that address longstanding issues in the UK rental market and affect up to 4.4 million private renters.
The most significant change may come in the form of a ban on “no-fault” evictions which currently permit landlords to end tenancy agreements without providing a valid reason for the termination.
Sky News reported that in 2019 & 2020, more than one-fifth of private renters did not end their tenancy by choice; 8% were asked to leave by their landlord. They also reported that 230,000 private renters have been served no-fault eviction notices since 2019, giving them just two months to vacate their homes. Michael Gove commented,
For too long private renters have been at the mercy of unscrupulous landlords… with the threat of unfair no-fault eviction orders having over them.
Other proposals include:
Outlawing blanket bans on renting to families with children or those in receipt of benefits
The termination of arbitrary rent review clauses: This should prevent landlords from being able to hike up rent and allow tenants to be repaid if their homes have fallen into disrepair and become ‘non-decent’. If rent is increased, tenants will be given double the current notice period and will have a stronger power to challenge the increase if unjustified.
Making it easier for tenants to have pets in their homes
All UK tenants will be moved to a single system of periodic tenancies - this means that renters will have less liability to pay their rent and can move more easily if their current housing is deemed to be of poor quality.
First announced in 2019, the Private Renters’ sector will benefit from its first Ombudsman - designed to enable and resolve disputes between renters and landlords without having to go to court.
A promise to landlords that they will reserve the right to gain possession of their properties from antisocial tenants. They will be able to sell their properties if and when they need to.
A brand new property portal will be created to aid landlords in understanding their responsibilities. The portal will also contain information for tenants and local councils giving all stakeholders far more clarity on the new industry standards.
How has the rental industry reacted?
The CEO of the National Residential Landlords Association claimed that,
We will be analysing the government's plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.
Polly Neate, CEO of Shelter, also commented that,
This white paper promises people safety and security in their home, and it makes clear that landlords need to play by the rules. Gone will be the days of families being uprooted and children forced to move school after being slapped with a Section 21 no-fault eviction for no good reason.
Nathan Emerson, CEO of Propertymark, questioned the fairness of the new white paper,
How is it fair that a tenant can simply end a tenancy at a time of their choosing, but an agent or landlord has to present a valid reason that is defined in law?
Emerson calls for a working partnership with private landlords who rent to truly reform the sector for the better.
Homeppl's views on the proposed reform
Alexander Siedes, CEO, claimed that,
Homeppl welcome the changes as our company ethos is all about helping tenants rent property on fairer terms.
The reform will provide a new Ombudsman and online information portal and as such, will lend greater clarity to all involved. Landlords, tenants and local councils will have a better understanding about their responsibilities during a tenancy agreement and that will no doubt bring about positive change.
We at Homeppl embrace positive change in the UK Rental sector and our unique-to-market tenant referencing and rent guarantee products have been designed to protect landlords from defaults and approve more tenants who currently get rejected under the traditional validation processes.