Home Residential PropertyBuy-To-Let New rules could drive landlords away

New rules could drive landlords away

by LLP Reporter
1st Jul 22 11:33 am

Under new plans for the rental sector in the UK, many rules that landlords impose on tenants could be banned under The Fairer Private Rented Sector White Paper announced last week.

This includes the refusal of some landlords to allow pets in a rented property or to rent to those on benefits. In addition, Section 21 ‘no-fault’ evictions will also be banned.

As spelled out in the white paper, tenants will have more powers to challenge ‘unjustified’ rent rises as rents rise at the fastest level for 5 years. But some fear the new changes, which may be costly to landlords, could make rents go even higher.

The decent homes living standard, which currently applies to social housing, will be extended to the private sector. It has been reported that the conditions pose an imminent risk to tenants’ health and safety in 12% of properties affecting more than half a million households.

To meet the decent home living standard, properties must be in a reasonable state of repair, free of health and safety hazards, have a reasonably modern kitchen (no more than 20 years old) and bathrooms (no more than 30 years old), and be reasonably insulated.

The proposed rules include:

  • A ban of ‘no-fault’ Section 21 evictions (ending tenancies without reason)
  • No blanket bans on tenants on benefits
  • No blanket bans on tenants with pets or children
  • Homes must meet the decent homes living standard
  • The creation of a new Private Renters’ Ombudsman to settle disputes (out of court)
  • Giving more power to tenants to challenge rent increases and poor housing standards

To protect landlords from pet-related damage, the Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. This means that landlords can require pet insurance to cover damage to their property.

Landlords would not typically have protection against damage from a tenant’s pet through their landlord insurance. Accidental damage coverage in landlord insurance, which is often an add-on feature only available for an additional premium, may protect against events like a dog’s tail knocking a glass of wine onto a carpet, but would not typically protect against chewing or soiling damage.

Announcing the plans, Housing and Levelling Up Secretary Mr. Gove said: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe, and cold properties, with the threat of unfair ‘no fault’ eviction orders hanging over them.

“Our new deal for renters will help to end this injustice by improving the rights and conditions for millions as we level up across the country and deliver on the people’s priorities.”

However, there are rumblings that the new changes could force some landlords to leave the sector because their costs will rise and they will lose authority.

Ben Beadle, chief executive of the National Residential Landlords Association, said: “Whilst headline commitments are helpful, the detail to follow must retain the confidence of responsible landlords, as well as improving tenants’ rights.

“A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.

“The eventual legislation needs to recognise that Government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”

While most Brits support measures to drive rogue landlords out of the market, there are concerns that the changes, which could adversely affect good landlords, might drive landlords from the market and reduce the supply of rentable properties.

Simon Bath, CEO of iPlace Global, the creators of Moveable, added: “The property market continues to face severe shortages in supply—in the last three years, the number of available rental properties has almost halved and with that, prices have gone through the roof. At least now the Government is set to announce plans to ensure tenants are getting the protection they deserve.”

The White Paper is still a work in progress and is not law yet. It will be debated and passed through Parliament first, with changes likely to be made to the paper along the way.

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