"While the amendments reflect the government’s aim to protect tenants and improve standards in the private rental market, landlords will now need to prepare for a more regulated environment and adopt proactive adherence to the new standards"
- Graeme Goessen - Johns&Co
As one of the most significant pieces of legislation for landlords and tenants proposed in recent history, the Bill was largely aimed to fulfil the 2019 Conservative manifesto commitment to abolish ‘no fault’ evictions in England.
However, as the Government has recently changed key issues outlined in the Bill, Johns&Co are providing their expertise on what this means for landlords and how they can adapt to the amendments.
Graeme Goessen, Management Services Director at Johns&Co, said: “Proposed changes to the Renters Reform Bill were introduced this month to crack down on ‘rogue landlords, protect vulnerable residents and improve the decency and safety of homes for millions of tenants’.”
“While the amendments reflect the government’s aim to protect tenants and improve standards in the private rental market, landlords will now need to prepare for a more regulated environment and adopt proactive adherence to the new standards.”
The new changes include new mandatory grounds for landlords selling or moving into properties, with the Decent Homes Standard to be applied to the private rented sector for the first time, and local authorities being granted new and stronger enforcement powers to investigate landlords renting out substandard homes.
However, despite the move towards a more regulated private housing market, ministers have also confirmed that the promised ban on section 21 ‘no-fault’ evictions will be delayed until potentially lengthy reforms to the judicial system are completed.
Graeme commented: “While the removal of Section 21 remains in the bill, the planned delay until improvements have been made to the judicial systems is a significant step forward for landlords following extensive lobbying.
“These improvements are a necessity for ensuring that the bill is equally supporting responsible landlords, as well as tenants, particularly in the wake of stricter regulations over possession rules. It will also help to restore landlords' confidence in the reforms as it progresses towards a fairer regulated market.
“However, while there are good intentions to make the necessary improvements to reform the court system, the government have not put a timescale on how long the promised reforms will take to implement and any subsequent changes could take months if not years.”
The second reading reaffirmed that the Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. Additionally, landlords will have the option to utilise the tenancy deposit to cover any damages.
Graeme said: “This not only assures landlords that, while they cannot reasonably deny tenants the right to keep pets, they can require tenants to have pet insurance. This ensures coverage for any property damage caused by pets, offering assurance that the responsibility for preventing and addressing damage resides solely with the tenant.”
In addition to changes to the Bill, the prime minister’s green review has announced the scrapping of new minimum energy efficiency standards, with landlords no longer required to improve the energy efficiency of their rental properties.
Graeme said: “While the government will continue to encourage households to improve energy efficiency where they can, in the immediate future this relieves landlords of the pressure of investing substantial amounts of money during the current period of financial uncertainty.”
This comes as a recent survey of over 1500 landlords found that 42% of landlords considered energy efficiency improvements to be their biggest challenge. However, the absence of a clear plan to replace the original EPC changes has also resulted in uncertainty throughout the market around investment decisions.
Graeme advised: “The scrapping of EPC requirements might lead to some properties remaining less energy-efficient as landlords prioritise their financial stability and other improvements.
However, in the absence of stricter regulations, energy-efficient homes can now stand out as a distinguishing feature within a competitive rental market, with EPC ratings likely to remain a key consideration for many renters.”
Once the Bill has ultimately been given Royal Assent, the government will implement the Bill in two stages, providing at least six months' notice of the first implementation date. However, with the next General Election drawing close, the Renters Reform Bill will face a tight deadline to receive Royal Assent before parliament is dissolved.
Graeme concludes: “Responsible, knowledgeable, and proactive Property Management practices will be key to mitigating potential challenges and leveraging the benefits of a fairer and safer rental market. As such, continued awareness of evolving regulations will be crucial for landlords to navigate the planned changes and plan for the future successfully.”
