0:03 AM, 30th August 2023, About A year ago 1
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The government needs to offer more details about its proposed Renters (Reform) Bill to landlords and agents so they can prepare for its impact.
That’s the call from the managing director of payment specialists PayProp, Neil Cobbold, who says there are too many unanswered questions that could threaten the future of private rented sector (PRS) investment.
After its introduction last May, there is still no scheduled second reading of the Bill.
Along with the abolition of section 21 ‘no-fault’ evictions, the Bill will also boost housing standards and allow tenants to keep pets.
There will also be a new Ombudsman to deal with complaints, along with a new Landlords’ Register and property portal.
The Bill will also change assured shorthold tenancies (ASTs) into periodic tenancies.
But Mr Cobbold says: “While we welcome legislation that improves standards within the PRS, landlords and letting agents need more details to assess its impact and determine whether it is likely to be workable.
“At this stage, it remains to be seen. More than three months have passed since the Bill’s first reading, and we would have expected more details from the government by now.”
He added: “This legislation has taken a long time to get to this point.
“It was first mooted in 2019 when the then-Prime Minister, Theresa May, promised to end ‘no-fault’ evictions.
“Since then, we have gone through numerous housing ministers and Secretaries of State and a white paper, but we still need clarity on how some of these proposed measures are actually going to work.”
He continued: “The lack of detail is putting additional pressure on rental housing supply while landlords struggle with costs and some with higher mortgage rates.
“Landlords may need reassurance to continue to see the PRS as a viable investment.
“The vast majority of them already provide decent homes for millions of people.”
Mr Cobbold added: “Many landlords could already be considering their position in the sector as they are now being taxed on revenue instead of profit at a time when costs are rising.
“In addition, many are worried that the proposed abolition of Section 21 will take place before the courts are ready to absorb the inevitable increase in Section 8 evictions.
“The industry also needs reassurance that the proposed court reforms to speed up Section 8 evictions will be sufficient to provide a reliable and timely court service.”
Mr Cobbold points to a chronic shortage of housing in the UK and he says that to create a thriving PRS, landlords must be encouraged to remain in the sector.
He said: “This needs to be coupled with a boost in housebuilding for sale as well as rent, and a legislative framework that supports this.
“Broadly, the industry welcomes the new Ombudsman and proposed Property Portal, but here again, we will need to see how both of these services will work.
“Crucially, will there be enough resources to enforce the new levels of regulation?
“And how will periodic tenancies affect student lets?
“While it is encouraging to see the government working on this issue, there is already a lack of student accommodation in some towns and cities, and some students commute hours to get to lectures.
“The form of student tenancy will be key to avoiding further shortages, as landlords may decide to offer student properties to the professional market as HMOs without reassurances on these reforms.”
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Judith Wordsworth
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Sign Up11:23 AM, 30th August 2023, About A year ago
As a Bill goes through 12 stages before Royal Assent there are numerous stages where a Bill can be amended. So plenty of time for detail to be published before the final readings.
It is blinding obvious from the first draft that if periodic tenancies are applicable to student HMO’s there could be a situation where there is (1) a mix of students and non students and Council Tax then required to be paid by all occupants (2) empty rooms if/when a student leaves their course early and no other students looking to fill the room and no non-student wants to rent it.