Important Information for Landlords – Good news (we think), further to the Queen’s Speech last week

Some positive developments in the rented property sector, de-coded by Talitha Burgess, Managing Director of Clarity Property Management

Whilst the attention of the press was last week fully focused on the absence on health grounds of our longest ever-reigning monarch, and on The Prince of Wales stepping up to the mark, the actual content of the speech was also of interest – as you would expect. Not least to landlords, and those working in this increasingly squeezed sector.

Change has been on the cards for some time now.

I’ll take you through the outcome of last’s week’s announcements and briefly explain what these alterations are likely to mean to you as a landlord.

Summary

The government has announced its commitment to a Renters’ Reform Bill, with a double-edged declaration, namely:

1. The repeal and abolition of Section 21 repossessions
2. The strengthening of landlords’ rights of possession, therefore providing a “fair and effective” market for tenants and landlords – to quote the speech directly. This is likely to take the form of more robust Section 8

Let’s examine both of these.

1. Section 21, Housing Act 1988 – “No Fault” Evictions

Originally set out in the Renters’ Reform Bill released in late 2019, Section 21 evictions have, in the view of many been, well…somewhat controversial.

Should a landlord wish to evict his or her tenants, and assuming an extended notice period is not in place, Section 21 requires two months’ notice without having to give  a reason for the eviction.

This contrasts with a Section 8 notice, where you must prove that the tenants have broken the terms of their agreement.

For the sake of balance, this isn’t a “baddie vs. goodie” scenario. And of course,  nothing is black and white.

According to the National Residential Landlords Association, the body that campaigns on behalf of landlords, most landlords wish to keep good tenants in their homes. Also, in their experience, issuing “no fault” eviction orders on a whim, mostly doesn’t happen. The NRLA argues that, leaving aside rental arrears, or dealing with we might refer to as “difficult” tenants, in most cases there are legitimate reasons for a landlord wanting regaining possession of their home.

For example, should they plan to sell up, or move into the property themselves.

https://www.nrla.org.uk/news/blog-NRLA-win-possession-grounds-strengthened

Thus, when Section 21 is abolished – and this may take up to two years for the legalities to take effect – landlords will by law have to provide their tenants with a solid reason for ending the tenancy. Tenants will also be able give notice, allowing for give in their notice, allowing for a sufficient period.  

Does it really take that long to reach the statute books? It appears so, yes; there are numerous consultations that need to take place, new legislation needs to be drafted and then make its somewhat snail-like progress through parliament.

2. What will replace Section 21? Step forward, stronger Section 8 legislation

Announced last week are government proposals to create sturdier grounds for repossession under Section 8 of the Housing Act, 1988.

Here, the word “replace” isn’t quite accurate; the plans re-focus on strengthening landlords’ rights, not least when there are rent arrears, anti-social behaviour and so on.

A curveball of note? Perhaps: it’s worth knowing that the government will consider limiting these new Section 8 grounds until the tenancy has lasted for two years. As yet, however, and I quote – there is “no consensus” on stipulating a tenancy length.

It’s hard to offer information about what all this means in practice. Right here, right now, there is no definite picture of what this actually looks like. As usual, look out for our blogs for the latest up-to-date information.

What is the reason behind changes to Section 21?

HM government will be publishing a white paper this summer (2022). As we understand it, they have taken these measures for tenants to be able to “challenge poor practice and unfair rent increases without the fear of retaliatory eviction” (our italics, this second half of the sentence showing the other side of the coin).

What else was in the Queen’s speech?

Elsewhere, the government has confirmed that it will be applying the Decent Homes Standard to the private rented sector.

A quick Google search reveals the following government research briefing:

https://commonslibrary.parliament.uk/research-briefings/cbp-7328/#:~:text=The%20PRS%20has%20the%20worst%20housing%20conditions&text=The%20English%20Housing%20Survey%20(EHS,%25%20of%20social%2Drented%20homes.

Briefly, the English Housing Survey estimates that in 2019, 23% of homes in the private sector – that’s nearly a quarter – did NOT meet the Decent Home Standard. This compares to 10% of owner-occupied homes and 12% social-rented homes; council-owned properties, in other words.

Landlords will need to act, should this uncomfortable state of affairs apply to them.

Click here, to find out more about the Decent Homes Standard, and what this means to landlords:

https://www.gov.uk/government/publications/a-decent-home-definition-and-guidance

Also, a new ombudsman will be introduced, tasked with solving disputes outside of the courts; cheaper, less stressful, less time-consuming? We hope so.

Finally, it appears that there will be a new “property portal”. We don’t yet know all the details, but at this stage, this looks like a meeting-in-the-middle website where tenants can hold landlords to account, and where landlords can go to understand their duties and responsibilities. Be aware: local authorities will monitor this portal.

In our view

Here at Clarity, we support clear, unambiguous legislation, enabling both tenants and landlords fully to recognise and act on their responsibilities. It’s in our business name, after all – Clarity.

The government views the scrapping of Section 21 evictions as a way to reinforce tenants’ rights. We agree. Nevertheless, despite all best endeavours, rogue renters still walk amongst us. Therefore, giving landlords greater powers to tackle those in serious rental arrears, who wilfully damage your property, or who make their neighbours lives a misery – is a step in the right direction.

Get in touch if you would like to discuss renting out your property. We’re here to help.