The industry reaction to the Renters' Reform bill

Anna·25 May 2023·6 min read
The industry reaction to the Renters' Reform bill

The long-awaited Renter Reform Bill was finally introduced in early May and its publication has been met with largely welcome but mixed reactions.

Some significant changes seen from the Bill are the abolishment of section 21 ‘no fault’ evictions as well as the scrapping of fixed-term tenancies.

The Bill is currently in its early stages of progression through the legislative process. In the House of Commons, the Bill is in its second reading before it will head to Committee stage and then the Report stage before entering its final reading. As it proceeds to the House of Lords this process will once again be repeated before entering the Final Stages.

Many industry professionals are in support of the newly proposed reforms.

Timothy Douglas, head of policy and campaigns at Propertymark, says: “Reforms to the private rented sector in England have been long awaited and the Bill will bring much-needed clarity to letting agents, their landlords and tenants.”

He comments: "Propertymark will support the UK Government to ensure the specific details work in practice for those on the ground, whilst providing both security and fairness for both parties of the rental agreement.

"It is also important implementation is well planned and managed as these reforms are significant for the sector.”

Rebecca Marsh: “The Renters Reform Bill, as a package, is the most significant set of reforms for the private rented sector in a generation.”

Rebecca Marsh, Property Ombudsman at The Property Ombudsman, similarly shares her support for the upcoming reforms.

She says: "Requiring landlords to have a reason to evict a tenant while at the same time giving them enhanced abilities to deal with anti-social behaviour, seeks to rebalance the landlord/tenant relationship.

"Underpinning this is the need to reduce court times and the introduction of a Landlord Ombudsman, both of which will play a fundamental role in ensuring these reforms work on a practical level.

“We look forward to continuing our work with the Department to help them develop a Landlord Ombudsman that not only resolves disputes but also helps tenants and landlords understand their roles and responsibilities and supports the wider regulatory landscape and the court reform.”

Some industry professionals are vocal in their concerns regarding the Renter Reform Bill and how it might impact an already imbalanced rental market.

Oli Sherlock, Director at rental market expert Goodlord, believes the Bill is a step in the right direction for tenant rights. However, it is not the final step that needs to be taken.

He says: “Right now, all the anecdotal evidence points to a rising number of landlords deciding to sell up. This, combined with a chronic lack of new rental homes being built, is creating a supply and demand issue that is driving up rental prices, creating despair for tenants seeking new homes, and resulting in market conditions which this Bill hasn’t been designed to fix.

“The Government should not see the publication of this legislation as a job done. It should be the first step in a longer line of urgent changes that are needed. A healthy rental market requires empowered, protected tenants as well as fair-minded, incentivised landlords in order to function. Any legislation that addresses one without the other won’t make the difference it needs to.”

Allison Thompson contributes to the conversation: “We already have a shortage of supply, and this might drive more vulnerable tenants further underground.”

Thompson, National Lettings Managing Director at Leaders Romans Group, says the Renters' Reform Bill has the potential to be beneficial in helping to identify and remove rogue landlords, whilst also providing renters with more information to make informed decisions about potential properties.

She warns: “Prior to the strengthening of Section 8, there was a strong suggestion that the Renters’ Reform Bill would be heavily weighted in favour of tenants and may serve to discourage new landlords to the sector.

“We already have a shortage of supply therefore all this may serve to do is exacerbate that and drive more vulnerable tenants further underground in desperate attempts to find housing.”

She continues: “The Government must realise that the housing crisis – specifically the under-supply of rental units – cannot be resolved by penalising the already stretched private rented sector.”

Much of the critique has revolved around how the changes will affect student landlords.

Ben Beadle, Chief Executive of the National Residential Landlords Association, has expressed concern over the Bill and its lack of specified detail.

He says: “Ministers must develop a plan to improve the speed and efficiency with which the courts process possession claims. Although the Government has accepted NRLA calls to digitise cases, staff numbers need to increase in the court system as well to meet the needs of these reforms.

“Likewise, the Government must recognise the serious concerns of landlords letting to students about open ended tenancies. Without the ability to plan around the academic year, students will have no certainty that properties will be available to rent when they need them.”

The government is considering bill amendments just one week after unveiling the Renter’s Reform Bill.

The Bill will outlaw fixed-term tenancies but changes are being considered that would make it easier for landlords to let out their properties to students on a yearly basis.

These changes come after the backlash among student let investors claiming the original bill would have negative impacts on both landlords and students.

For landlords, failing to find tenants at the start of term could mean a loss of potential income. For students, the worry is there will be fewer properties available which may cause more distress, particularly in cities with a student housing crisis.

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