"The end of Section 21, ‘no explanation’ repossessions represents the biggest change to the sector for over 30 years. Once the Bill is passed, it is vital that sufficient time is provided to enable the sector to properly prepare."
- Ben Beadle - NRLA
Details of the new Renters’ Rights Bill will be published today as the bill makes its way to the Commons for its first reading.
Labour had promised to scrap the legislation allowing ‘no fault’ evictions if elected, following the outgoing government’s failure to pass the Renters (Reform) Bill before election campaigning began.
The Renters’ Rights Bill will also restrict in-tenancy rent rises and protect tenants whose landlords want to sell or move in.
However, landlords are warning they may have to raise rents by as much as 10% if the expected flexible tenancies mean tenants can walk away from deals in just two months and an already struggling court system will feel that extra pressure if Section 21 is finally abolished.
Speaking ahead of its publication, Timothy Douglas, head of policy and campaigns at Propertymark, commented: “Having met with the Housing Minister, it is clear his intention is for these reforms to overhaul private renting in England. They are a long-held manifesto commitment from Labour, with the new government at Westminster using their mandate for reform.
“Whilst Propertymark acknowledges the drive towards improved standards, the UK Government must fully understand and recognise the impact that these changes will have with agents up and down the country left wondering how this legislation will help meet the much-needed demand for homes for people to rent.
“With such significant changes to the current tenancy regime, there must be a commitment to ensure the court system and grounds for possession are robust and fit for purpose. Furthermore, without an enhanced, effective and well-resourced enforcement regime from local authorities, it is unlikely that any benefits from the reforms will be realised.
“Propertymark will continue to make the case for evidence-based policies that support a flexible and fair private rented sector for all.”
Ben Beadle, chief executive of the National Residential Landlords Association (NRLA) said: “Plans to reform the private rented sector have been on the table for over five years now. Above all, renters and landlords need certainty about what the future looks like. Whilst we await the precise details of the Bill, it is vital that it works, and is fair, to both tenants and landlords.
“The end of Section 21, ‘no explanation’ repossessions represents the biggest change to the sector for over 30 years. Once the Bill is passed, it is vital that sufficient time is provided to enable the sector to properly prepare. Over 4.5 million households will need tenancy agreements updating, letting agent staff and landlords will need to undertake training and insurance and mortgage providers will need to adjust policies and rates. None of this will happen overnight and the Government needs to publish guidance.
“In addition, ending Section 21 will leave the courts needing to hear possession claims where landlords have a legitimate reason. The cross-party Housing Select Committee has warned that without reforms to ensure the courts process cases much more swiftly, they risk becoming overwhelmed. This will not serve the interests of tenants or landlords seeking justice.”
On plans to improve rental housing quality, Ben said: “Too often the actions of a minority of rogue and criminal landlords have brought the sector into disrepute. We therefore support measures to ensure every rental home is of a decent quality, and swift action is taken where standards threaten the health of tenants. However, this all needs to be backed up with robust enforcement by councils.”
He also stressed the need for reform to ensure courts do not buckle under the pressure of possession claims that will need to be heard under the new rules.
He added: “Ending Section 21 will leave the courts needing to hear possession claims where landlords have a legitimate reason. The cross-party Housing Select Committee has warned that without reforms to ensure the courts process cases much more swiftly, they risk becoming overwhelmed. This will not serve the interests of tenants or landlords seeking justice.”
Ian Fletcher, Director of Policy (Real Estate) at the British Property Federation, also highlighted concerns around the court system being able to cope under the new legislation, saying: “Rental reform has been long promised, and like the new Government we want to see it done.
"Much of the provisions of the Renters’ Rights Bill we will support, because they will lead to a better rental sector. Our primary concern remains the ability of the courts to deal with the increased workload that will come their way without s21, which is why we had taken a hard line with the previous Government to secure court improvements ahead of the legislation being passed.
"We can see why the new Government wants to inject new pace into reform, and it has made some reassuring commitments to continue to improve the courts. Without court reform and improvement, the new system won’t work well and deliver fair access to justice. It remains therefore our number one priority to ensure the courts are working well, and we hope it is a priority of the Government too.
Landlord Register
Mr Fletcher added: "As representatives of responsible landlords, however, we are pleased to see other commitments continue to be taken forward. A landlord register is something we have campaigned for since 2007. Responsible landlords will also welcome the continued commitment to a Private Rented Sector Ombudsman. And the appreciation that the student accommodation market must be able to operate on an annual basis to facilitate student access to higher education.
"Overall, we believe the rented sectors can make an important contribution to the expansion of housing supply, it is therefore reassuring to see the Bill contains nothing that resembles rent controls and an appreciation that stability, certainty, and clarity are the cornerstones of increased investment in the sector. We look forward to further engaging on the Bill.”
Clarity
Oli Sherlock, Managing Director of Insurance, Goodlord: “The stuttering, broken-record loop the industry has been stuck in over this legislation may finally be coming to an end from today. It won’t necessarily all be music to the sector’s ears, but we will at least have some clarity.
"The biggest change between the previous Renters (Reform) Bill and the new Renters Rights Bill will be around Section 21. The Conservative Government offered the industry something of a fudge around the scrapping of no-fault evictions, with vague promises to introduce it once the courts were ‘ready’. Whilst we agreed with the sentiment of this, there was no timeline or action plan announced alongside. In contrast, it looks like the Labour Government will scrap S21 outright and the courts will need to find a way to cope.”
Lauren Hughes, Head of Customer Success, Vouch: “At first glance, this Bill will look very similar to the previous legislation, but once you scratch the surface critical differences will emerge. Labour has already indicated that they will go further around rent increases - including ending bidding wars and challenging unfair rent increases.
"However, in a way that has become familiar over the years, we have thus far been given little detail about how they will achieve this. Likewise, the Government has decided to take the standard of private housing further by integrating the Decent Homes Standards and Awaab’s Law.
"And, most crucially, it appears that S21 will be scrapped as soon as the Bill passes into law. It’s a seismic piece of legislation. The industry will cope with the changes - it always does - but that doesn’t mean it will be a smooth or painless transition."
