Rental reforms: landlords to prepare for buy-to-let market overhaul

Rental reform white paper – what’s included?

The government has described the proposed reforms as the biggest change to law for tenants and landlords in a generation.

Most of the measures included in the “Fairer Private Rented Sector White Paper” were announced last month as part of the Queen’s Speech. However, a new headline policy making it easier for tenants to keep pets has also been included.

Here’s an overview of the main reforms:

• landlords will need to have a “good reason” to not let tenants have a pet in their home
• if landlords do refuse pets, tenants can challenge their decision
• landlords will be able to require that renters get insurance to cover property damage caused by pets
• the Decent Homes Standard (currently used in social housing) will be extended to private rental homes
• Section 21 evictions will be scrapped – tenancies will only end if a tenant ends it or a landlord has a valid reason, defined in law
• landlords will no longer be able to have a blanket ban on renting to families with children or those who receive benefits

More measures have been announced, such as:

• all tenants will be moved onto a single system of periodic tenancies. This means they can leave poor quality housing without having to pay the rent or move more easily when their circumstances change
• notice periods for rent increases will be doubled, giving tenants stronger powers to challenge them if they’re unjustified
• councils will have more powers to tackle criminal landlords, with increased fines for serious offences
• a Private Renters’ Ombudsman will be created to resolve disputes between tenants and landlords without the need to go to court
• landlords will be able to gain possession of their properties from anti-social tenants and can sell them when they need to
• a new property portal will help landlords understand their obligations and give tenants “performance information”

Free rental property inspection checklist

Download our editable rental property inspection checklist template to help manage your tenants, keep on top of compliance, and identify any maintenance issues.

Pets in lets – an unexpected rental reform

The announcement that it’ll be easier for tenants to keep pets was unexpected as it’s not previously been mentioned as a rental reform.

However, in recent years there have been various attempts by MPs to stop landlords from being able to refuse animals in rental properties.

It’s estimated that just seven per cent of landlords advertise their properties as being pet-friendly, and the government says would-be pet owners are being “unfairly deprived” of the companionship of having an animal.

The Cats Protection charity estimates there are one million households who would like to own a cat but can’t because they rent.

Meanwhile, the latest research from The Deposit Service shows that not being able to keep a pet is the most common reason for tenants moving between properties.

This year, almost a third (30 per cent) of tenants who moved home said they did so to accommodate a pet, rising from seven per cent last year and making it the most common reason for moving.

olezzo/stock.adobe.com

A long time coming – when could rental reforms be introduced?

The introduction of rental reforms have been delayed several times due to the Covid-19 pandemic. However, earlier this year they were put back on the agenda when they were included in the government’s Levelling Up White Paper and the Queen’s Speech.

Plans to end Section 21 evictions and introduce an ombudsman for the rental sector have been around since 2019, while the government has been carrying out a review of the Decent Homes Standard since November 2020.

The government says it’s hoping to introduce a Renters Reform Act before March 2023.

Before then, it’s likely there will be consultations and the measures will need to be approved in both the House of Commons and the House of Lords.

Reaction: detail must follow “helpful” headline commitments

The government’s plans to strengthen possession grounds for landlords, speed up the court process, and improve access to mediation are all helpful, according to Ben Beadle, Chief Executive of the National Residential Landlords Association.

However, he said the details that follow must “retain the confidence of responsible landlords, as well as improving tenants’ rights”.

He added: “We will be analysing the government’s plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.

“The eventual legislation needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”

Meanwhile, Housing Secretary Michael Gove commented: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe and cold properties, with the threat of unfair ‘no fault’ eviction orders hanging over them.

“Our new deal for renters will help to end this injustice by improving the rights and conditions for millions of renters as we level up across the country and deliver on the people’s priorities.”

How can landlords prepare for rental reforms?

It’s important for landlords to read the government’s white paper to get a full understanding of all the proposals and how they’ll work.

For some landlords, the reforms could mean needing to revise their tenancy agreements or listing policies, while others may have to make improvements to their properties.

A professional letting agent or legal specialist in the rental sector could help you to identify any changes you’ll need to make and answer your questions about how the reforms could affect you.

More details on all of the measures are likely to be released in the coming months as the proposals start making their way through Parliament. Keep an eye on our Knowledge centre for regular updates.

More useful articles for landlords

• Is there an air source heat pump grant for landlords?

• Revealed: the impact of buy-to-let mortgage tax changes on the market

• A guide to buying property at auction

What are your concerns about the government’s plans for rental reforms? Let us know in the comments below.