9:17 AM, 18th July 2024, About 4 months ago 48
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Landlords have another battle on their hands with news that the Renters’ Rights Bill will pick up where the Renters (Reform) Bill failed to deliver.
Despite a 2019 manifesto pledge, the RRB was binned by the Conservatives after Rishi Sunak called a General Election.
Now Labour is promising to ‘take action where the previous government has failed’ on the protection for renters.
Below, we give details of what landlords can expect from the new legislation.
Prime Minister Sir Keir Starmer said: “Too many people currently live with the threat of insecurity and injustice, and so we will make sure everyone can grow up in the secure housing they deserve.
“We will introduce tough new protections for renters, end no-fault evictions and raise standards to make sure homes are safe for people to live in.”
The Labour says that more than 11 million renters in England face constant anxiety because they could be evicted with little warning and for no reason.
It adds that this fear traps many tenants in poor-quality housing because they’re afraid to complain about being kicked out in retaliation.
The Labour Party says: “We value the contribution made by responsible landlords who provide quality homes to their tenants and believe they must enjoy robust grounds for possession where there is good reason to take their property back.
“However, the Government is determined to level decisively the playing field between landlord and tenant by providing renters with greater security, rights and protections and cracking down on the minority of unscrupulous landlords who exploit, mistreat or discriminate against tenants with bad practices such as unfair rent increases intended to force tenants out, and pitting renters against each other in bidding wars.”
It goes on: “The Renters’ Rights Bill delivers our manifesto commitment to transform the experience of private renting, including by ending Section 21 ‘no-fault’ evictions – we will take action where the previous government has failed.
“The Bill will give renters much greater security and stability so they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.”
Labour also says the PRS must provide flexibility for those who want it, and that too many renters are ‘being exploited by a minority of unscrupulous landlords’.
The government says this Bill will tackle the challenges faced by millions of private renters in England, including 1.4 million families with children and 444,000 households with over-65s.
In 2023, ‘no-fault’ evictions threatened a record 25,910 families with homelessness, while 2,682 were evicted – a worrying 19% increase in just a year.
The government also points to soaring rents which have jumped from a 2% annual growth to 9% in March.
That rise means tenants, on average, spend 38% of their income on rent, compared to 21% for homeowners and 27% for social housing tenants.
Also, one million private rented homes are considered non-decent, and more than half a million have serious health hazards like damp and mould.
To help private landlords understand what is planned under the Renters’ Rights Bill, here are the full details published by the government:
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Propertymark urges clarity on Section 21 abolition
Beaver
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Sign Up11:13 AM, 22nd July 2024, About 4 months ago
Reply to the comment left by Ian Narbeth at 22/07/2024 - 10:56
So I know that these things have been said before but the labour party hasn't got their legislation through either the House of Commons or the House of Lords yet. And somebody who knows what the problems are needs to make those points in both houses as the legislation is going through. Because if the labour party says "[landlords] must enjoy robust grounds for possession where there is good reason to take their property back" they need to be held to that.
Keir Starmer is a lawyer so he does at least have some understanding of the court system and how long it can take. Only a fool would create a system where landlords could not afford to take the risk of continuing to rent their properties out for fear of losing their equity or their homes.
Ian Narbeth
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Sign Up12:39 PM, 22nd July 2024, About 4 months ago
Reply to the comment left by Beaver at 22/07/2024 - 11:13
Beaver, with respect I think you are missing my point. Even if Labour deliver "robust grounds for possession where there is good reason [for landlords] to take their property back" that is of limited value if it takes ages to get to court. Justice delayed is justice denied.
Magna Carta said "To no one will we sell, to no one will we refuse or delay, right or justice" (emphasis mine) It is bad enough for anyone to have a lawful claim delayed. It is worse for landlords as we are involuntary creditors, compelled to continue to provide a service to defaulting tenants.
Beaver
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Sign Up13:02 PM, 22nd July 2024, About 4 months ago
Reply to the comment left by Ian Narbeth at 22/07/2024 - 12:39
I wasn't missing your point although thank you for clarifying anyway.
The reason for my post is that I heard a rumour over the weekend (from another landlord) that labour would give tenants the right to buy their rental property from their (PRS) landlord. I don't know where that rumour came from and it may be just gossip. The current position is summarised at this link:
https://www.themortgagehut.co.uk/expert-articles/first-time-buyers/126/can-i-buy-my-rental-house-from-my-landlord
This link says "Your landlord has no legal obligation to agree to sell to you, after all, it’s their house. However, your enquiry about buying the house might make them consider, especially if you’re able to pay a fair asking price".
I couldn't think of any reason why a landlord would consider it if the tenant wasn't able to pay a fair asking price. But even if the tenant was able to pay, plenty of landlords rent properties out because they know that at some stage they are going to have to put family members back in; or because the properties have development potential that they are relying on for their future financial security; or because they need to do something else with their property to plan for future changes, like inheritance tax for example.
At this stage we don't know what the final shape of the labour legislation that ultimately gets through both houses will look like. You are of course right that delayed justice is justice denied....if landlords can't get their properties back from tenants that don't pay the rent then they won't be able to afford risking renting properties out or investing in residential property and landlords will be victimised by unscrupulous tenants working the system, as happens today.
But that situation would be far worse if tenants got some kind of right to buy from the PRS, or just to keep living in the property indefinitely. It's not quite so devastating for incorporated landlords as if a tenant pays fair price they can just reinvest anyway and the tax liabilities for an incorporated landlord are not as bad. But there are plenty of small portfolio landlords (i.e. the majority) for whom such proposals would be financially devastating.
And the point there is that it's not just the landlords and tenants who would suffer. The public purse would suffer because property owners would have no choice but to fight in the courts, and fight the courts for years, to avoid their families suffering financial devastation. The courts would be overwhelmed.
Bad property legislation wouldn't just affect landlords and tenants. It would also damage government and the public purse, currently overseen by the first female chancellor of the exchequer.
Beaver
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Sign Up13:18 PM, 22nd July 2024, About 4 months ago
Incorporated landlords aren't affected by labour proposals in the same way. Related to this you may have seen this news that may stop some landlords from incorporating:
https://propertyindustryeye.com/property118-tax-avoidance-scheme-subject-to-hmrc-stop-notice/#:~:text=%E2%80%9CFor%20those%20following%20the%20saga,promote%20their%20tax%20avoidance%20scheme.%E2%80%9D
If the environment has changed under the new government such that the unincorporated part of the PRS really is under attack and has no place to go other than the courts, then you can expect the courts to be overwhelmed.
Mr Blueberry
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Sign Up20:46 PM, 22nd July 2024, About 4 months ago
Reply to the comment left by Cider Drinker at 18/07/2024 - 11:01
@cidsr drinker - Good points
PAUL BARTLETT
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Sign Up19:27 PM, 2nd August 2024, About 4 months ago
Reply to the comment left by Ian Narbeth at 22/07/2024 - 10:56
The Proscribed Information and the Deposit Certificate are produced by the Deposit organisation based on the Tenancy Agreement data, I.e. who, how much, so that data must be correct and weekly rent x 5 be calculated correctly.
The Proscribed Information and the Deposit Certificate must be served with How To Rent and other supporting documents Gas Safe certificate EICR etc. so both tenants and landlords have that before the tenancy starts.
Not difficult for S21 now, and still not difficult for S8 IMHO.
Rent statement to prove arrears is just about book keeping.
Proving antisocial behaviour, now that is hard because witnesses won't come forward. Best to rely on complaints to council environmental health as they do the privacy measures but still have credibility in court e.g. list of incidents.
Jack Jennings
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Sign Up10:45 AM, 9th September 2024, About 2 months ago
Let's look for the clouds silver lining. With S21 gone, S8 and CCJ's might weed out the problem tenants and leave them in tent land.
Beaver
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Sign Up16:42 PM, 12th September 2024, About 2 months ago
Reply to the comment left by Jack Jennings at 09/09/2024 - 10:45
There might be a silver lining somewhere.
What I can see at the moment is that landlords are to be banned from evicting tenants for three months if they don't pay:
https://www.telegraph.co.uk/money/property/buy-to-let/tenants-stay-properties-three-months-without-paying-labour/#:~:text=Landlords%20will%20be%20banned%20from,proceedings%20to%20repossess%20their%20property.
That of course increases the risk of being a landlord and the only option of reducing that risk at the moment is to put the rent up. This does mean of course that if you put the rent up across a portfolio of properties to reduce the risk presented by the tenant that doesn't pay then the non-payer is going to be funded by the good tenants.