Our analysis
No doubt you will have heard of the Renters Reform Bill Whitepaper. What does that mean for private sector landlords? Is it all doom and gloom?
Here’s our analysis of the key points.
Section 21 “no fault” evictions being abolished
Statistically speaking, our landlords here in Stoke on Trent do not evict people for fun. There is always a fault like arrears, breach of tenancy, anti-social behaviour or the genuine reason of needing to sell the property. All of these grounds can be covered via the Section 8 procedure and the proposals will still allow no fault notices if landlords need to sell the property.
Yes, it does mean needing to prove the reason for eviction, but as letting agents we hold all the evidence to prove the grounds. Furthermore, our Rent Guarantee policy covers all the eviction costs and legal work. So, this abolition of Section 21 isn’t as scary as it sounds.
New Ombudsman Scheme and Landlord Portal
In our humble opinion, this is pie in the sky stuff. It’ll be too costly for the government to implement, so will likely never materialise.
Abolishing arbitrary rent review clauses
Currently we have rent review clauses built into our Tenancy Agreements. The clause enables us to increase rents using the retail price index (ie. inflation) every 12 months. As it’s in the Tenancy Agreement, the tenants do not have the right to appeal. They can, of course, give notice and leave if they do not like the rent. However, since this method follows inflation, tenants are unlikely to find cheaper housing elsewhere. So they do not tend to leave.
With this White Paper proposal, we will be back to using the Section 13 notice procedure for rent increases, a procedure we are familiar with for statutory tenancies. Ok we will have to give tenants 2 months’ notice rather than 1 month. That seems fair so tenants can plan the increased expenditure. The increases themselves will need to be fair.
In our experience our rent reviews are to keep up with market values, values that are driven by the undersupply of rental houses and overdemand from tenants. As long as the government is not introducing rent controls (which they are not in England), this proposal will not stop landlords doing rent reviews and keeping up with market values. The Section 13 procedure places the burden on tenants to appeal to a rent tribunal. We must ask ourselves how many tenants will bother to do so?
Changing all tenancies to periodic tenancies
Currently we do fixed terms for 6 months that become periodic monthly rolling tenancies if either party does not want to sign a new fixed term. Since COVID, we are finding an increasing number of tenants leaving during their fixed terms due to changing jobs, splitting up or other life events. It seems with all the uncertainties around, for some landlords, the fixed term contracts aren’t worth the paper they are printed on.
Obviously no landlord wants a tenant to move in and move out within a few months, so we need to watch this space and try to get involved with the consultation on the White Paper. We still think the majority of people won’t abuse this as it’s not easy to physically move house, and there is a shortage of rental houses to move to. It will, however, assist tenants in poor housing conditions to leave on short notice.
Implementation of Decent Home Standards
The government wants to impose some “decent home standards”. Hang on, don’t we already have Fitness for Human Habitation, Housing Health Safety Rating System & repairing obligations under the Landlord & Tenant Act etc etc?
We see this as just another way to pay lip service to housing standards. The regulations are already there. It’s the enforcement side that is severely lacking. Let’s not worry about this. It just suits the government to bring out the usual cliché of slum landlords and how the government is going to save tenants from damp dinky houses. If you are a Belvoir landlord, we will advise you further on this. From our cursory reading of the Decent Homes Standard, there’s nothing onerous in it. Most of our landlords already upkeep their homes accordingly.
No more blanket bans on children or pets
You may recall that I advised on the model tenancy agreement that came out during lockdown about allowing pets being the default position in the future. This White Paper seeks to implement that by making pets permitted in rental houses unless the landlord gives a valid reason within a certain timeframe. Valid reasons could be allergies, small size of property, flats that aren’t suitable for pets and so on.
I read that over 60%1 of families have pets, thanks to lockdown. So if you are a landlord with a property, would it not make the house easier to rent out if you did accept pets? Granted the pet may cause more damage than you’d like. However, there are pet agreements we could sign, the damage deposit could be used, perhaps more rent could be charged per pet?
As for the ban on children, when I first rented in Stoke on Trent in 2007, the letting agent advertised “no children” for the 4 bed detached house. Ridiculous! We did make them see sense and we moved in with baby and toddler in toe. When we moved out, there was no damage to the property attributable to the children. It is now 2022, and in my last 5 years at Belvoir doing all the rental valuations, I have yet to meet a single landlord who has asked me to ban children!
This White Paper is tinkering with the private rented sector once again. On the surface many of the proposals are great vote winners because they purport to protect the vulnerable against nasty slum landlords. To this we welcome change that puts decent homes in our neighbourhoods and slaps slum landlords with fines if they are exploiting people. To all good landlords, please don’t worry. Once you dig a bit deeper under the proposals of the White Paper, there is little that is catastrophic to the daily running of your rental house. Even the substantial change like changing all tenancies to periodic tenancies is nothing a reputable letting agent can’t handle on your behalf.
Landlords, keep calm and carry on. Property is still a great investment. Where else could you get a
stable 6 – 8% return on your investment? If you are worried, there will be an official website somewhere where you can give your views! Write to your MP, write to your papers and get involved in property discussions to put your view as a landlord forward.
Ramona Hirschi
Managing Director
