Industry responds to next phase and reading of the Renters (Reform) Bill

Posted on Thursday, April 25, 2024

The Renters (Reform) Bill has returned to the House of Commons today, with Levelling Up Minister Jacob Young arguing the legislation will provide unprecedented protections for renters via the abolition of Section 21 ‘no fault’ evictions.

But does the Renters (Reform) Bill deliver a “fair deal” for both tenants and landlords?

The bill had its report stage and third reading yesterday following the addition of a number of new amendments.

This included an amendment calling for tenants not to be asked to give two months’ notice leave until they have been in a property for at least four months for fixed term tenancies.

Another called for a review of the courts before section 21 is abolished for existing tenancies.

So how did the industry react?

Oli Sherlock, managing director of insurance at Goodlord, commented: “The Renters (Reform) Bill involves much more than the abolition of Section 21 eviction notices. However, it was the main topic of conversation again in Parliament today. Although it is imperative for the county courts to have the resources they need to cope with the upcoming changes, the lack of detail around when and how the money to pay for this will be provided is disappointing.”
Ben Beadle, chief executive of the National Residential Landlords Association, said: “This bill delivers a fair deal for tenants and responsible landlords. In the interests of certainty for the sector it is now time to ensure the bill passes through parliament.

“For renters, the Bill will abolish section 21 repossessions and fixed term tenancies, introduce a Decent Homes Standard for the sector, a new Ombudsman and Property Portal which landlords will have to join as well as measures to protect families and those in receipt of benefits from discrimination.

“Going forward, it will always be for the courts to decide if landlords have met the threshold to repossess a property based on a series of legitimate reasons. This includes tenant anti-social behaviour, serious rent arrears or where a landlord plans to sell a property.

“That said, the tenant group, Generation Rent, has rightly warned that landlords selling properties is ‘a leading cause of homelessness.’ The only answer to this is ensuring responsible landlords feel confident enough to stay in the market. Greater security for tenants will mean nothing if the rental homes are not there in the first place.

“A number of the amendments proposed to the bill enact recommendations by the cross-party housing select committee. Taken together they would ensure a balanced bill that protects tenants and ensures it is viable for responsible landlords to continuing renting properties out.”

Brendan Geraghty, CEO, ARL, said: “The Association for Rental Living (ARL), the representative body for rental living sector in the UK including build to rent (BTR), welcomes the report stage and third reading of the Renters (Reform) Bill.
“Whilst the ARL supports the intentions of the Bill in making the rental sector fairer for all and welcomes many of the tabled amendments, it is notable that from a tenant’s rights perspective, the professionally managed BTR sector largely already accommodates the Bill’s proposals, including fairness, which are designed to improve the quality of homes and the renting experience.

“For over a decade, the BTR sector has attracted the highest calibre institutional capital from across the world having proved that it creates, maintains, and professionally manages good quality homes, in the long term, for the benefit of customers, local communities and investors. Almost 102,000 new homes have been completed, with a further 163,731 in the planning and delivery pipeline (Savills, April 2024). The new BTR Code of Practice, conceived and launched for road-testing last month by the ARL, is further testament to the sector’s commitment.

“However, from a landlord’s perspective it is very important that we have an effective 6 month assured tenancy as effectively tabled in the amendments at this stage. Without this we would likely see an exodus in investment in rental accommodation which would exacerbate the already evident housing crisis.

“The ARL does support the requirement for reform of the courts before the abolition of Section 21 and welcomes the undertaking to review licensing regimes as these are impacting the viability and delivery of much needed additional homes.

“Almost a year on from the introduction of the Renters (Reform) Bill into Parliament and 5 years since Theresa May’s government first announced the bill in April 2019, the ARL calls for swift passage of the Bill through the House of Lords to ensure clarity and confidence for all in the future of the private rented sector.”

Lauren Hughes, director of customer cuccess at Vouch, remarked: “The Renters (Reform) Bill does seem to be creaking towards the finish line, but today’s debate showcased just how much uncertainty remains. Section 21 was much discussed, with a range of Tory MPs continuing to put pressure on Gove to water down the manifesto proposal to scrap no-fault evictions. And it appears that this strategy has been effective, with the Housing Minister admitting that the Section 21 ban is unlikely to be in place before a General Election.”

Olivia Harris, chief executive, Dolphin Living, added: “While we broadly support the principle objectives of the Bill and welcome the progress that is being made, especially around the introduction of an initial six-month tenancy period for tenants and the requirement for an assessment on the county court possession system before abolishing section 21, as the Bill progresses to the Lords we need to be mindful of the potential unintended consequences of the legislation on intermediate rental providers. Namely, the impact changes to section 21 might have on sub-market rent products which operate under the basis of a household income cap being used as a basis for tenancy allocation, and crucially, renewal. The ending of term tenancies, without an exemption for intermediate rent or allowing termination on grounds that the initial qualifying income criteria are no longer met, will prevent the homes being available to those that need them.”

Via @PropertyIndustryEye