Radical changes to private rented sector proposed

to let property agency sign posted outside english terraced houses in poplar, east london

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The recent sweeping changes proposed as part of the government’s plan to ‘level up the quality of housing in all parts of the country’ was proposed in its 12-point plan of action in a White Paper titled ‘A fairer private rented sector’.

If passed, this legislation will increase the onus and workload of letting and managing agents, who are already under pressure with the updated energy efficiency regulations for private rented housing (see: Brunel News, June 2022).

Amongst the points raised within the White Paper – the most significant proposals include:

  • Abolition of section 21 ‘no fault’ evictions: Replacing the controversial ‘no fault’ eviction rules; enforcing new grounds for landlord’s possession, which may include the sale of the property, criminal behaviour and antisocial behaviour.
  • Changes to tenancy agreements: Tenancy structures could be replaced by simple periodic tenancies, which a tenant would be able to cancel on two months’ notice.
  • Restrictions on rent reviews: Rent reviews will be restricted to once per year and rent review clauses will be scrapped.
  • Launch of new Ombudsman: The introduction of an ombudsman scheme, in which private landlords would have to join.
  • Introduction of a digital Property Portal: A mandatory portal system for landlords, which would allow tenants to access their landlord’s compliance record.

There would also be an introduction of a Decent Homes Standard, which would improve the quality of housing stock in housing rentals, improving court processes and strengthening enforcement powers for local councils.

The proposals set out in the White Paper would also prevent outright exclusions of families with children or those on benefits, allow tenants to have pets and decorate their homes, and enable deposits to be passported between properties.

Writing in the introduction to the White Paper, Michael Gove, Secretary of State for Levelling Up, Housing and Communities said: “…the reforms set out in this White Paper fulfil this Government’s pledge to level up the quality of housing in all parts of the country so that everyone can live somewhere which is decent, safe and secure – a place they’re truly proud to call home.”

The ‘Renters Reform Bill’ which will make the required changes to legislation is expected to be introduced by the government in the current parliament.

Harry Bush, Senior Risk Executive – Claims & Technical of Brunel Professions.  “Whilst this is certainly a much-needed win for private tenants and tilts the balance of power back towards a more equal relationship between the tenant and their landlord, the opposite can be said for management agencies and letting agents.

The plethora of new rights, benefits and redresses at the hands of the tenant increases the risk of complaints, claims and loss as well as the amount of loss which could be left at the agent’s feet. It is therefore important that professionals get a handle on the new legislation and incorporate it into their advices, agreements and protocols as soon as possible.”

The White Paper ‘A Fairer Private Rented Sector’ has been published on the government website.  Reports about the plans have been published by Dentons, Clyde & Co and Simmons & Simmons.

ProfessionalIndemnity.com is owned by Brunel Professions, which is a leading professional indemnity insurance broker in the UK.  Click here to get a quote or call 0345 450 1074 to speak to a broker.

 

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