Home Property Warning for landlords over new Renters Reform Bill

Warning for landlords over new Renters Reform Bill

by LLP Staff Reporter
17th May 23 5:08 pm

A new law tabled in Parliament is looking to ban landlords from evicting tenants with no justification as part of a long-discussed overhaul of the private rental sector in England.

Tenants would also be given the legal right to request a pet in their home and it would be made illegal for a landlord to refuse tenancies to families with children, or those in receipt of benefits. David Hannah, Chairman of Cornerstone Group International states that this would be a welcome addition for renters who are currently facing significant obstacles.

The bill has been described as a ‘huge opportunity’ by housing campaigners to improve the lives of the 11 million renters in England who currently face record rents. Data from Hamptons shows that the average rent on a newly let home outside the capital increased by 7.8% annually to £1,002 in April, whilst the average rent in the capital now stands at a record £2,200 with the average monthly rent rising 11.1% year-on-year across Great Britain in April.

The most significant change in the bill is the abolishment of Section 21 – a key piece of legislation which allows landlords to evict tenants without providing justification. Research from Shelter shows that nearly 230,000 private renters had been served with a no-fault eviction notice since April 2019.

The Conservative Party initially promised to ban the evictions in their 2019 election manifesto, however Housing Secretary Michael Gove has only just announced the plans.

Mr Gove described the current rental market as “Too many renters are living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.” He stated that the government is determined to tackle these injustices by offering this new bill, which is one with quality, affordability and fairness at heart.

David Hannah, Chairman at Cornerstone Group International, discusses the current landscape of the rental market, “The introduction of the Renters’ Reform Bill has been a long time coming and I think an important measure to add to the rental market.

“Renters are facing record rents all across the UK with affordability still being the main obstacle for people looking to buy a property – forcing more individuals to rent for longer. This has caused an increased demand in the rental sector, with some landlords hiking rents by up to 20% in some properties, which is effectively a no-fault eviction for renters that find themselves faced with this proposition.

“By abolishing no-fault evictions, renters will have a better peace of mind and know that their landlord won’t be able to evict them immediately with no reason. This should hopefully take away a lot of the stress in renting and improve the connection and communication between renters and landlords which I think is lacking in the current rental market.

“I think the rental market is filled with uncertainties at the moment, with rising rents making it less attractive from a renter’s standpoint and rising house prices making it less desirable for buy-to-let landlords to grow their portfolios. I welcome the proposed changes of the renting rules, and agree tenants need protection.”

Gary Scott, Partner at Spector Constant & Williams, said: “Landlords have voiced concern that removal of the no-fault route for eviction leaves in place a possession process which is significantly flawed both in terms of the current permitted grounds for possession and the fact that the Court process is wholly unfit for purpose. In some cases, the process from serving notice to obtain possession has taken in excess of 12 months. In cases of rent arrears of at least two months, this means potentially 14 months of receiving no rental income without being able to obtain possession.

“The Bill proposes to extend the permitted grounds for possession and reform to the Court process. The details of such reform are not given and it is yet to be seen whether they are sufficient and can be implemented satisfactorily.”

Scott Goldstein, Partner at Payne Hicks Beach, said: “The abolition of no-fault evictions has been on the cards for more than four years and the only surprise is that it has taken so long to come to Parliament. Although we have yet to see the Bill, the Government briefings ignore the elephant in the room, which is that it takes a court order to evict a tenant and the workload of the courts is higher than ever.

“Many landlords are honest people who rely on rental income to pay their mortgage.  Abolishing no-fault evictions will give unscrupulous tenants another way of delaying, as cases where a landlord has to prove the tenant is at fault take many more months, and can cost thousands more, than no-fault eviction cases.

“An honest approach by the Government would have seen an overhaul in the court system administering evictions but that would have required serious investment so I am sad, but not surprised, that it has not happened.”

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