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Upcoming changes to the PRS announced in this year's Queen's Speech and new rental reform White Paper

Posted 4/07/2022 by Your Move
Categories: Landlords, Lettings
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For over two years we’ve been waiting for some progress on the Renters Reform Bill, which was first proposed in December 2019. Although there were unavoidable delays due to the pandemic, last year’s Queens Speech promised a White Paper would be published in Autumn 2021.

That was then pushed back, first to ‘the new year’ and then ‘the spring’, but we’ve now seen some firm progress. The White Paper, ‘A Fairer Private Rented Sector’, was finally published on 16th June.

As for the Bill itself, in the briefing notes for this year’s Queen’s Speech, which Prince Charles gave at the State Opening of Parliament on behalf of Her Majesty, the Government simply said it would be introduced during the current parliamentary session – and that could be any time up until next spring.

But what’s the latest on the rental reform proposals that promise to deliver a ‘new deal’ to all renters?

The White Paper listed a ’12-point plan of action’ that covers four key areas of reform for the rental sector:

A Decent Homes Standard for the Private Rented Sector (PRS)

The social rented sector already has a minimum standard that properties must reach, and the Government now wants to extend that to privately rented properties. A consultation is scheduled to be held this summer.

According to government data, 21% of tenants in the PRS live in homes of an unacceptable standard. The Government claims introducing this new standard will “slash the £3 billion a year in housing benefit that is estimated to go to landlords renting out non-decent homes.”

Importantly, to enforce this Decent Homes Standard, they will run government pilot schemes giving local authorities more powers to identify and pursue criminal landlords.

As members of ARLA Propertymark, we keep up to date with all the rules and regulations to ensure our rental properties meet the very latest standards. So if Your Move lets and manages a property on your behalf, you can be sure that this legislation will have little impact on you or your properties.

However, if you self-manage and you’d like to check that your properties already meet this future standard, just get in touch and our local experts will be happy to help you.

A private rental property portal

This replaces the original proposal for a landlord register. According to the White Paper, this new digital Property Portal will “provide a single ‘front door’ to help landlords understand, and demonstrate compliance with, their legal requirements.” Essentially, it should make it easier for landlords and tenants to understand their rights and responsibilities.

The Government also states that “Local councils will be able to take enforcement action against private landlords that fail to join the portal” – so it is still a form of landlord registration.

An overhaul of tenancy agreements

Three key changes have been outlined in the White Paper – the first was expected, but the other two are new proposals:

  1. Section 21 to be abolished

    The end to so-called ‘no fault’ evictions has been under discussion for many years and the Government is now keen to move forward with making sure landlords can’t evict tenants without a good reason.

    Importantly, they’ve also pledged to strengthen landlords’ rights of possession under section 8, introduce stronger grounds for repeated incidences of rent arrears and reduce notice periods for anti-social behaviour.

    In our experience, almost every eviction comes about because the tenant has breached their tenancy agreement. The reason landlords often use a section 21 notice rather than a section 8 is because if the tenant refuses to leave, they can gain possession more quickly and easily via the ‘accelerated procedure’. If a section 8 is used and the tenant doesn’t leave, you have to go through the full court hearing process, which takes longer and costs more.
  2. All tenancies will become ‘periodic’

    Currently, it’s common for Assured Shorthold Tenancies (ASTs) to have an initial fixed period – usually either 6 or 12 months – during which time both the landlord and tenant are committed to the tenancy. This change means that tenants will be able to give just two months’ notice to a landlord at any point during their agreement.
  3. Landlords will only be allowed to increase rents once a year

    Tenants will also have the right to challenge the rise if it’s unreasonable. At Your Move, we’ve always recommended that landlords should raise rents each year in line with inflation, so that rental income keeps up with the cost of living. That helps ensure you can continue to afford maintenance and repairs, so the property is always legally let in a good condition. So we don’t expect landlords to have any issues with this proposal.
  4. Improved dispute resolution

    The Government has made it clear that it plans to reduce the current “unacceptable” delays in the time it takes for court hearings for landlords to repossess their properties – which is great news for landlords.

    The most likely solution is the introduction of a PRS ombudsman scheme, which could:

    (a) Facilitate mediation between landlords and tenants when there are dispute

    Help free up the court system for more serious case

    (c) Offer agents some recourse against bad landlords

Rental Reform: Landlords won’t be able to refuse pets without a good reason

One addition to the rental reform proposals that’s included in the new White Paper is that all tenants should have the right to ask the landlord’s permission to keep a pet – and the landlord can’t refuse unless they have a good reason.

For landlords and agents that use the government’s model tenancy agreement, this rule already applies. If a tenant wants to keep a pet, they can make a request to the landlord in writing and the landlord has 28 days to respond. If they can’t give a good reason – e.g. the property’s not suitable for the type of pet or there’s a lease clause that prohibits pets – then the default position is consent.

While there’s been a lot of media attention over this, it’s important to note that there will be protection for landlords. The Government has stated that they plan to amend the Tenant Fees Act 2019 so landlords will be able to charge the tenant for pet insurance. In the Government’s own words: This means landlords will be able to require pet insurance, so that any damage to their property is covered.”

Given that we’re a nation of pet lovers and more and more tenants are looking for long-term homes, we’d suggest it’s already worth considering allowing pets, but recommend that you:

1. Can you meet the pet first, so you can see for yourself what size they are and how they behave?

2. Get a pet reference from any previous landlord.

In our experience, when a tenant finds a comfortable home that suits both them and their pet, they’re less likely to want move and will usually take good care of the property.

In addition to these proposals for the PRS, the Queen’s Speech also stated that there would be “legislation to improve the regulation of social housing to strengthen the rights of tenants and ensure better quality, safer homes”.

Following on from this, the

Social Housing Regulation Bill has already been introduced to Parliament, proposing:

  • Giving social tenants greater powers and improved access to redress
  • Making social housing providers subject to a tough new regime
  • Allowing unlimited fines to be imposed on social landlords who fall short of required standards.

You can read a transcript of the Queen’s Speech here and the Government’s background briefing notes here. And now that the rental reform White Paper has been published, we’ll cover any further updates in next month’s newsletter.

Meanwhile, if you have any questions about the upcoming rental reforms, just get in touch with your local Your Move branch and have a chat to one of the team.

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