Renters Reform Bill

Michael Gove's much-delayed Renters Reform Bill has finally got its first reading in Parliament. Its purpose is to improve tenants' rights and give them security of tenure in their homes and help local authorities tackle rogue landlords. As many of our customers at Phillip Arnold Auctions are landlords, we thought you should know how it might affect you. So, what exactly is in the reform bill?

1. Section 21 Notices: The most contentious issue is the scrapping of Section 21 'no-fault' eviction notices. Landlords will need to provide a specific reason for evicting tenants, using a Section 8 notice. Valid criteria include; anti-social behaviour, rent arrears, consistent late payments and any kind of criminal activity. Repossession orders can also be made if landlords are; undertaking a substantial remodelling that makes the property uninhabitable, if they are selling, or are returning the property to a holiday let. The problem is, repossession orders will have to go through the courts, where there is currently a huge backlog and so they could take up to 12 months. The government is proposing to create an ombudsman to mediate in any disputes and has said they will fast-track the court process but, to date, they have not put any of the relevant infrastructure in place.

2. Rolling tenancies: Tenancies will automatically be assumed to continue unlike the current assured shorthold tenancies, which typically only last 12 months.

3. Rent increases: The notice period for any increases will double to 2 months and be restricted to once a year.

4. Pets: Landlords will not be able to refuse pets unless there is a valid reason if they are banned in the lease, for example. In mitigation, landlords can charge tenants for 'pet insurance' which should cover any potential damage.

5. Landlord rating portal: Tenants will be able to rate their landlords as they do for Airbnb or Checkatrade. They will also be able to see their landlord’s letting history and give them a score.

6. Property Ombudsman: New Private Rented Sector Ombudsman to be introduced to resolve landlord and tenant disputes. This already applies to landlords with letting agents but will be extended to all private landlords.

7. Repeated serious rent arrears: These will be mandatory grounds for eviction and should close the current loophole where tenants can avoid eviction by paying their arrears just before a possession hearing.

8. Minimum Housing standards: They currently only apply to social housing but will be extended to the private rental sector and properties should:

a) Meet the current statutory minimum standard for housing and be in a reasonable state of repair.

b) Have reasonably modern facilities and services (kitchens under 20 years old and bathrooms under 30).
For full details see: Government's minimum housing standards

9. Families and those on benefits: Tenants cannot be rejected solely on the basis that they receive benefits or have children.

It is likely to take around 12 months before the Bill becomes law. In the meantime, the Government will be watching anxiously to see if the steady stream of landlords leaving the market turns into a full-blown-exodus which could have serious implications for the long-term health of the entire rental sector.

If you’re a landlord and are looking to expand your portfolio we, at Phillip Arnold Auctions, can help – all you need do is to take a look at all the fantastic properties we have coming up in our next auction.

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