Gove proposes radical new rights for tenants

No-fault evictions and bans on social services tenants to be outlawed in England

In a statement embargoed for midnight, Gove’s Department for Levelling Up, Housing and Communities (DLUHC) promises the ‘biggest shake-up of the rented sector for 30 years’ targeted at the 21% of private rented sector tenants who ‘currently live in unfit homes’.

Following today’s announcement, which has an eye on the next election, the PM’s levelling-up agenda and the cost of living crisis, DLUHC says it proposes to introduce its Renters Reform Bill before March next year.

The radical proposals, the full nitty-gritty of which are to come, include:

• Outlawing ‘blanket bans’ by agents or landlords on renting to families with children or those in receipt of benefits;
• For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent and enabling tenants to be repaid rent for non-decent homes. This will make sure tenants can take their landlord to court to seek repayment of rent if their homes are of an unacceptable standard
• Making it easier for tenants to have pets in their homes by giving all tenants the right to request a pet in their house, which the landlord must consider and cannot ‘unreasonably refuse’.
• All tenants to be moved onto a single system of periodic tenancies, meaning they can leave poor quality housing without remaining liable for the rent or move more easily when their circumstances change. A tenancy will only end if a tenant ends or a landlord has a valid reason, defined in law. 
• Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified
• Giving councils stronger powers to tackle the worst offenders, backed by enforcement pilots, and increasing fines for serious offences.

But the White Paper will also include some measures designed to placate landlords, including (as previously announced):

• A new Private Renters’ Ombudsman to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court
• Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to. 
• Introducing a new property portal that will provide a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators.

Housing secretary Michael Gove says: “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’ evictions orders hanging over them.

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

COMMENT

There is no doubt that the private sector rental market is in need of drastic change. Houses are a finite commodity and we have reached a point where homeless families are competing just to rent a home, only to find themselves issued with a Section 21 within months of moving in. Whilst there may be arguments on both sides, this is a situation that is untenable.

As I have stated in previous articles, two of the most common reasons that tenants are evicted with a section 21, is because rents have risen exponentially and the only way to justify a significant rise, is for the landlord to evict the tenants and then re-rent at whatever figure they choose.

The other reason is because landlords wish to sell their property and BTL lenders can be very fussy about tenants in situ, so the easiest way is to evict the tenants, something that is not done in most EU countries.

There is another common reason for evictions, which is where the tenants complain about the condition of the property, often with good reason, these are called ‘revenge evictions’

Although there is legislation in place for revenge evictions, a complaint is only considered official once the local authority take action against the landlord, issuing a notice to rectify for example. However, many landlords issue a Section 21 as soon as the tenant points out anything that needs attention, therefore the tenants are served BEFORE the local authority acts, which is not then a revenge eviction as far as the courts are concerned.

This is definitely a major change, but there are some situations that could prove catastrophic, for example:

Under these changes, there does not seem to be provision for ‘accidental landlords’ which is where people need to move for work, or other reasons and need to rent their home to either rent or buy another. Under these proposals, they risk the possibility of facing significant legal costs with months of litigation, just to recover their home, but there is also the risk that they may face continual obstacles in the legal process, resulting in them being unable to recover their own home for months, years or even indefinitely.

Anyone even considering the rental of a property at this point must think very carefully. Do not rent your own home under any circumstances, until the changes to the law are clear and have been made available to professionals. If you are going to rent a BTL, ensure that you comply with every single aspect of the law.

Also, keep in mind that the minimum EPC rating will be raised to C from 2025, if your property is below that and you have tenants in place, who will not leave, you could have a serious problem improving the property whilst they are in place, you may even be required to pay for alternative accommodation plus moving costs, (moving out and moving back in) or face massive fines.

It appears that this is a serious turning point for the property rental market in the UK, with the final rules still unclear, but one thing is for certain, many landlords, of all types, are going to face a lot of problems over the next year or two, until such time that we enter a ‘new norm’ where BTL property, will no longer be the commodity that it has been in recent years and tenants will no longer be ‘dispensable’