After a long wait the Government finally published its White Paper A Fairer Private Rented Sector last week.
The White Paper contains proposals which could find their way into a new law covering the private rented sector within the next few years. Here we’ll look at the main points and see how they could affect landlords, agents and tenants.
While the White Paper includes many proposals they are summarised under five main sections as follows:
Safe and decent homes
This proposal will mean that the Decent Homes Standard or DHS, which currently applies in the social housing sector, will apply in the private rented sector.
This could cause problems for landlords with properties which aren’t in a good standard of repair. This might perhaps be because they are old or have some inherent problem (like damp). Or for landlords who aren’t very pro-active about maintenance.
It’s perhaps worth pointing out that many social housing providers have difficulty maintaining the DHS.
Increased security and more stability
Section 21 so-called ‘no fault’ evictions will be abolished. There will be reformed grounds for possessions by landlords however, including to remove anti-social tenants.
Tenancies will effectively become periodic tenancies with no end date. A tenancy will only end if the tenant ends it or the landlord has specific grounds for repossession.
These measures will likely really make landlords think about whether they want to rent a property out, and who to. It might make it difficult for some tenants to find accommodation at all.
Improved dispute resolution
There will be a new ombudsman covering all private landlords to help resolve disputes. While this could be a very good thing when it come to resolving problems it very much depends on what it will be like and how it works.
Rent rises will only be permitted once a year and tenants will have more protection from unfair rent rises. This perhaps overlooks the fact many private landlords don’t raise their rents much if at all. It was also perhaps a measure that was added to the White Paper before rampant inflation took hold.
Tenants won’t have to pay the rent on homes that fall below standard, and will be apply to apply for repayment of rent. This could be another measure which will impact on the supply of rented property.
Better compliance and robust enforcement
There will be what is being called a new ‘digital property portal’ to help landlords understand their responsibilities and enable stronger enforcement powers for local authorities.
The new portal is being presented as way of improving things for tenants. It looks very much like a massive digital register of information on landlords and properties that will certainly benefit someone. It’s not exactly clear how it will make tenants feel better on a day to day basis.
Local authorities already have many powers. Most lack the resources to apply the powers they already have. Enforcement is also patchy across different areas.
A positive renting experience
The proposals will strengthen the principle that landlords can’t discriminate against tenants on benefits when advertising properties.
Landlords won’t be able to discriminate against families with children or unreasonably refuse pets. Many landlords, of course, already know that settled tenants usually stay longer and make the best tenants.
It will be possible to ‘passport’ deposits and so allow tenants to move more easily.
The measures in the White Paper are a long way off becoming law. They might not even make it into law. But what impact might they have on the rental market?
It’s fair to say regulation in the PRS has been a hotchpotch of different pieces of legislation, old and new, for years. Clarifying everything for the future, assuming it is done well, can’t really be a bad thing.
It’s also worth pointing out that some of these measures already apply in Scotland. No fault evictions were banned there in 2017. Some commentators suggest they have contributed to a shortage of rental property in some places but generally the market has continued to be buoyant. It’s reported that Scottish landlords now find it easier to gain possession from bad tenants.
Some landlords might decide to leave the market. And new would-be landlords might decide not to bother at all. Perhaps because it makes everything seem a lot more complicated and potentially costly, especially if you only have a small portfolio.
It will almost certainly be bad news for bad landlords. Some of them might effectively decide to keep on operating but outside the law.
It is likely to be bad news for bad tenants or those whose tenant profile is less than ideal. They might have difficulty in finding accommodation at all.
Despite some initial reservations the proposed new law might not be all that bad for the majority of good landlords. It could reduce the supply of rented accommodation and push rents up. While that won’t be welcome to tenants it could actually lead to opportunities for conscientious landlords.
Agents might find themselves in something of a piggy-in-the-middle situation. They’ll need to make sure landlords are compliant with a myriad of new rules while at the same time providing them with a supply of good quality tenants.