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Fairer Private Rented Sector (PRS) White Paper published

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More than three years in the making, the Government has published a white paper setting out its intentions for what it says is the biggest shake up of the private rented sector in 30 years.

Labelled the fairer private rented sector white paper, the Government says the reforms will improve the rights and conditions for millions of renters, ensuring families benefit from living in decent, well looked-after homes.

To deliver this, the Government has unveiled a 12-point action plan, which we’ve summarised below.

It is important to note that as a white paper, the measures detailed are not legislation and should be viewed as an outline of the Government’s intentions. This means it is likely that further consultation will take place to refine the plans.

As a result, regularly checking the rented housing sector of the Government website for the most up to date information is recommended.

1. Deliver on the levelling up housing mission to halve the number of non-decent rented homes by 2030 and require privately rented homes to meet the Decent Homes Standard for the first time.

The legislative duty to meet the Decent Homes Standard will be placed on private landlords. Local councils will be given the tools to enforce the Decent Homes Standard so that they can crack down on non-compliant landlords while protecting the reputation of responsible ones.

It is also deemed that proposed changes to EPC standards in the PRS will mean warmer, more efficient homes.

Noting that these reforms are ambitious, the Government will consider how to best support good landlords, including the phased introduction of requirements where needed.

In the longer-term, a system of regular, independent checks to make sure that tenants are confident in a property’s condition from the outset will be considered. The costs and benefits of an independent regulator for the PRS will also be explored, as will further consolidation of existing legislation. The Government say these are issues they are keen to research further and explore with stakeholders.

2. Accelerate quality improvements in the areas that need it most.

As part of a three-year Supported Housing Improvement Programme, the Government says that £20 million will be invested to fund local councils facing some of the most acute challenges. Pilot schemes will explore different ways of enforcing standards while work with landlords will seek to speed up the adoption of the Decent Homes Standard.

3. Abolish Section 21 ‘no fault’ evictions and deliver a simpler, more secure tenancy structure.

Outlawing Section 21 evictions will mean that tenancies will only end if this is the wish of the tenant or if a landlord has valid grounds for possession, defined by law.

To achieve this, a single system of periodic tenancies will be introduced. The Government states that this will enable tenants to leave poor quality properties without remaining liable for the rent or to move more easily when their circumstances change.

Tenants will need to provide two months’ notice when leaving a tenancy, ensuring landlords recoup the costs of finding a tenant and avoid lengthy void periods.

To allow stakeholders to adjust, whilst making sure that tenants can benefit as soon as possible, the new system will be implemented in two stages.

The first will require that all new tenancies are periodic and governed by the new rules. Although specific timing will depend on when Royal Assent is secured, at least six months’ notice will be provided.

All existing tenancies will transition to the new system on a second implementation date. After this point, all tenants will be protected from Section 21 eviction.

4. Reform grounds for possession to make sure that landlords have effective means to gain possession of their properties where necessary.

New grounds will be introduced for landlords who want to sell their property or where landlords and/or close family members wish to move in.

In addition, the Government will introduce a new mandatory ground for repeated serious arrears. The notice period for the existing rent arrears eviction grounds will be increased to four weeks, and the mandatory threshold at two months’ arrears at the time of serving notice and hearing will be retained.

In cases of criminal behaviour or serious antisocial behaviour, the notice period for the existing mandatory eviction ground will be lowered and the introduction of further guidance to help landlords and tenants to resolve issues at an earlier stage will be explored. New, specialist grounds will be introduced to make sure that those providing supported and temporary accommodation can continue to deliver vital services.

5. Only allow increases to rent once per year, end the use of rent review clauses, and improve tenants’ ability to challenge excessive rent increases through the First Tier Tribunal to support people to manage their costs and to remain in their homes.

The Government says these tribunals will be prevented from increasing rent beyond the amount landlords initially asked for when they proposed a rent increase.

Landlords will also be required to repay any upfront rent if a tenancy ends earlier than the period paid for. The amount of rent that landlords can ask for in advance will also be limited if the practice of charging rent in advance becomes widespread or disproportionate.

The Government plans to expand Rent Repayment Orders to cover repayments for non-decent homes.

6. Strengthen tenants’ ability to hold their landlord to account and introduce a new single Ombudsman that all private landlords must join.

The new Ombudsman will allow tenants to seek redress for free where they have a complaint about their tenancy. The Government will also explore streamlining the requirement for landlords to provide details to both an Ombudsman and a digital Property Portal.

The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000. The Government also intend for the Ombudsman to be able to require landlords to reimburse rent to tenants where the service or standard of property they provide falls short. In addition to the introduction of the Ombudsman, the Government will consider how they can bolster and expand existing rent repayment orders and enable tenants to be repaid rent for non-decent homes.

The Government will also explore extending mandatory membership of a redress scheme to residential park home operators, private providers of purpose-built student accommodation and property guardian companies.

7. Work with the Ministry of Justice and Her Majesty’s Courts and Tribunal Service (HMCTS) to target the areas where there are unacceptable delays in court proceedings.

A package of wide-ranging court reforms will target the areas that particularly frustrate and hold up possession proceedings, working with the courts to consider the prioritisation of certain cases.

Mediation and alternative dispute resolution will be strengthened to enable landlords and tenants to work together to reduce the risk of issues escalating. The findings from the Rental Mediation Pilot will be published and will inform mediation.

8. Introduce a new Property Portal to make sure that tenants, landlords and local councils have the information they need.

A portal will provide a single ‘front door’ for landlords to understand their responsibilities, tenants will be able to access information about their landlord’s compliance, and local councils will have access to better data to crack down on criminal landlords. A series of ‘how to’ guides for both tenants and landlords will also be published.

Subject to consultation with the Information Commissioner’s Office (ICO), the Government also intends to incorporate some of the functionality of the Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible.

9. Strengthen local councils’ enforcement powers and ability to crack down on criminal landlords by seeking to increase investigative powers and strengthening the fine regime for serious offences.

It is expected that the Property Portal will dramatically increase local councils’ ability to enforce against criminal landlords and that, over time, this will be bolstered by incorporating some of the functionality of the Database of Rogue Landlords and Property Agents.

Ways to increase local councils’ investigative powers, enabling them to target illegal business activity and pursue the worst offenders, will be sought.

The Government will explore introducing the requirement for local councils to report on their housing enforcement activity and ways to recognise those local councils that are doing a good job.

The Government will seek to introduce a national framework for setting fines, based on clear culpability and harm considerations, which will ensure a more consistent approach to fine setting and reduce the incidence of arbitrary reductions of fines made by tribunals.

10. Legislate to make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits and explore if similar action is needed for other vulnerable groups, such as prison leavers.

The Government will improve support to landlords who let to people on benefits, which will reduce barriers for those on the lowest incomes. The Government will work with the insurance industry to address landlord and agent misconceptions and explore improvements to welfare support information for both tenants and landlords.

11. Give tenants the right to request a pet in their property, which the landlord must consider and cannot unreasonably refuse.

Legislation will ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision. The Tenant Fees Act 2019 will be amended to enable landlords to request that their tenants buy pet insurance.

12. Work with industry experts to monitor the development of innovative market-led solutions to passport deposits.

The Government says this will help tenants who struggle to raise a second deposit to move around the PRS more easily and support tenants to save for ownership.

 

Richard Rowntree

Richard Rowntree
Managing Director for Mortgages

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