Last week, the long-awaited Renters (Reform) Bill was introduced before parliament. But might the proposed new legislation cause more harm than benefit for tenants?
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Hailed by the government as a “once-in-a-generation overhaul of housing laws”, few bills introduced before parliament have been so long anticipated or discussed as the Renters (Reform) Bill. Its key proposal is abolishing the Section 21 ‘no fault’ eviction process. But in its current form, the proposed legislation would also:
- outlaw blanket bans on renting to tenants receiving benefits or with children.
- give tenants the right to request to keep a pet in their home.
- introduce a new ombudsman for resolving disputes between landlords and tenants.
- create a new ‘Decent Homes Standard’ setting minimum standards for housing quality.
- introduce a new property portal on which landlords must register, allowing tenants to view information about a potential landlord before proceeding.
Last year, research revealed that the abolition of the Section 21 process was a matter of significant concern to one in three landlords. That’s because the new law will effectively create open-ended tenancies. Eviction will depend on satisfying a ground for possession, including:
- the landlord or a close family member wishing to move into the property.
- the landlord wishes to sell the property.
- antisocial behaviour by the tenant or anyone living in or visiting the property.
- the tenant’s conviction for a serious criminal offence.
Striking a balance
The cost-of-living crisis means tenants struggle to pay their rent more than ever. Yet, at the same time, we face a chronic shortage of rental properties, pushing ‘market rents’ ever higher.
Figures reveal that at the end of 2022, supply within the private rental sector was down by almost 8% compared to the previous year – and by more than 25% since 2019. This is, in part, the result of landlords selling up. But also, many tenants that may otherwise have moved on are staying put, particularly if they have a good relationship with their landlord.
The months leading up to the Bills introduction have seen a surge in landlords serving Section 21 notices, likely representing the beginning of a mass exodus from the sector – further fuelling the housing crisis. And as the Bill heads towards the statute book, expect the situation to worsen as an element of panic sets in.
With ever-greater pressure on supply, the risk is that the most vulnerable suffer even more, contrary to the Bill’s stated aim. Certainly, landlords will be ever more careful about whom they rent to, with more due diligence on potential tenants.