The government has published a white paper, ‘A Fairer Private Rented Sector’, setting out its plans to radically reform the private rented sector. We examine the proposals.
The private rented sector accounts for 19% of households in England, housing more than 11 million people. The sector has doubled in size since the early 2000s, and 43.5% of those in private rented accommodation are aged between 25 to 34.
As part of its ‘levelling up’ plans, the government says it will improve sub-standard housing and ensure all private landlords adhere to a legally binding standard of decency. It also wants people to be able to own their own homes and says it is “firmly committed to helping generation rent to become generation buy… In the meantime, renters should have a positive housing experience.”
The white paper sets a 12-point plan to create a private rented sector that meets the needs of both tenants and landlords.
Abolition of s21 notices
The headline change will be the abolition of ‘no-fault’ eviction notices under s21 of the Housing Act 1988. Section 21 enables landlords to recover possession of a property let on an assured shorthold tenancy on two months’ notice after the expiry of the contractual term or on a break date without requiring any reason.
To achieve this, all tenancies will move onto a single system of periodic tenancies. Tenants will need to give landlords two months’ notice when leaving a tenancy, but landlords can only evict a tenant “in reasonable circumstances”. These circumstances will be clarified in the legislation.
The government says it will implement the new system in two stages: it will give six months’ notice of the first implementation date, after which all new tenancies will be periodic and governed by the new rules. On the second implementation date, all existing tenancies will transition to the new system and tenants protected from s21 eviction. There will be at least 12 months between the first and second dates.
Other proposed changes include:
- Reforming the grounds for possession so that landlords have effective means to gain possession of their properties. These grounds will include the tenant being persistently in arrears of rent or engaging in anti-social behaviour.
- Only allowing rent increases once per year, ending the use of rent review clauses and allowing tenants to challenge excessive rent increases through the First-tier Tribunal.
- Introducing a new Ombudsman that all private landlords must join to provide “fair, impartial, and binding resolution to many issues and be quicker, cheaper, and less adversarial than the court system”.
- Working with the Ministry of Justice and courts to speed up the court system and strengthening mediation and alternative dispute resolution to enable landlords and tenants to work together “to reduce the risk of issues escalating”.
- Introducing a new ‘Property Portal’ for landlords, tenants and local councils. This will enable landlords to understand their responsibilities and tenants to find out about their landlord’s compliance with them. The portal will give councils better data to “crack down on landlords”. Council’s enforcement powers against landlords guilty of serious offences will also be strengthened.
- It will be illegal for landlords to have a blanket ban on renting to families with children or those on benefits. Tenants will also have the right to request a pet in the property, which the landlord cannot reasonably refuse.
- Introducing a “Decent Homes Standard” for the private rented sector, along similar lines to that now required in the social rented sector.
The new legislation will not apply to student accommodation.
We will update you about the proposed changes once the draft legislation comes before parliament.
If you require further information on this article, please contact Daniel Broughton at [email protected].
Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional advice before taking any action in relation to the issues discussed above.