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Understanding the Renters Reform Bill: A Flawed Attempt at Change

On June 16 2022, the Government released their white paper ‘A Fairer Private Rented Sector’. This set out a 12 point plan to create “a fairer, more secure, higher quality private rented sector”, including commitments to:


· Requiring landlords to ensure that their privately rented properties meet the Decent Homes Standard, with an aim to halve the number of non-decent rented homes by 2030.

· Strengthen the enforcement powers of local authorities.

· Abolishing section 21 of the Housing Act 1988, thereby ending ‘no-fault’ evictions – a leading cause of homelessness in this country.


The plan was introduced to Parliament in the form of the Renters’ Reform Bill on May 17 2023 for its First Reading in the House of Commons, and it underwent its Second Reading yesterday (24.05.23).


As a Law Centre that represents the rights of tenants and campaigns for secure and safe homes, we welcome the opportunity to scrutinise and reform the laws governing renting in the UK and welcome this move towards an end to ‘no fault evictions’ however, we have a number of concerns regarding the contents of this Bill which falls short of its commitments. In this blog, we outline our key concerns, addressing those that affect tenants and how the Bill impacts on Local Authorities and the Housing sector as a whole.


Our main concerns which will affect tenants under the Renters Reform Bill include:


1. Ineffective measures to tackle Rent Increases


The Renters’ Reform Bill will extend the notice required to increase rent from one month to two months, and will make it so that rent can only be increased under s.13 and once every twelve months. Renters will be allowed to challenge the level of increase at the Tribunal, however, the test for reasonableness will continue to be based upon market rates. This change will do nothing to improve the current situation where we are seeing a continued rise in market rents. Unless rent caps are introduced and rent increases are suppressed, we will continue to see increasing rent arrears leading to evictions and homelessness.


2. The so called “Abolition” of Section 21 and the End of No-Fault Eviction


We do not believe that no-fault evictions have truly been abolished as the Bill stands. Instead, Assured-Short Term tenancies (ASTs) are to be abolished, which will only further compromise tenant security. ASTs are the tenancy under which a section 21 eviction can be served, but only after the end of the fixed-term of this tenancy and with a two-month notice period. Many tenants sign 12-month contracts for ASTs, meaning tenants have security from eviction for at least a year in most cases.


Under the new Bill, tenants are now only protected for the first six months of their tenancy, after which they can be evicted under the amendments to Ground 1 and the introduction of Ground 1A.


a. Ground 1 allows for an eviction after 6 months when a landlord or a family member intends to move into the property.


b. Ground 1A allows for an eviction after 6 months when a landlord intends to sell. Without any requirement of evidence of the intention to sell.


Both of these grounds have loopholes which could be used by landlords to use as no-fault evictions under a new name. We will be watching to see the level of proof that will be required of landlords when attempting to use these grounds. The use of these grounds will prevent landlords from re-letting the property for 3 months. However, there is little to imply how this 3-month period will be monitored, and more importantly, enforced. The Bill makes no provisions for already overstretched Local Authorities to either monitor or enforce these periods. In many cases, it may be that the money saved by avoiding repairs repeatedly raised by a tenant, or made by raising vastly raising the rent following the eviction, will incentivise the landlord to accept this 3-month period regardless.


3. Trapping Tenants with Extended Notice Periods


Under the proposed bill, tenants will now be required to give a two-month notice to quit, trapping them in tenancies for an extra month. This places an undue burden on renters, especially in a competitive rental market where properties are quickly snapped up. This could lead tenants into a situation, whereby they end up paying rent to two properties simultaneously, in order to secure a new property.


4. Amendments to Ground 2 favour landlords


Ground 2 allows for eviction when a mortgage lender requires vacant possession of a property in order to sell. Currently, this only applies to mortgages entered into prior to the start of a tenancy meaning mortgage lenders had to accept tenancies and could not evict even if the landlord wanted to. This change further undermines tenants’ security.


5. Troubling Introduction of Ground 8A


Ground 8A poses a significant concern as it now allows landlords to evict tenants if they have had two months' rent arrears on three separate occasions within three years, regardless of whether the arrears were resolved. This provision fails to consider temporary financial difficulties or extenuating circumstances that may have caused arrears. It eliminates the possibility of resolving issues and disincentivises tenants from attempting to repay their arrears, ultimately leading to greater instability.


6. Easier Evictions under Discretionary Ground 14?

Amendments to Discretionary Ground 14, from "likely to cause nuisance or annoyance" to "capable of causing nuisance or annoyance," suggest a lower threshold for eviction based on anti-social behaviour. This change potentially allows eviction with less evidence of actual ASB, raising concerns about fairness and the potential for abuse.


Our main concerns for the Local Authority and homelessness under the Bill:


1. Concerns with Grounds linked to homelessness


These grounds appear to have been developed from Local Authorities’ increasing need for accommodation that can be used to discharge homelessness duties, without resolving issues around causes of homelessness, or supply of housing stock.

Ground 5E and Ground 18 make is easier for people to be evicted from supported accommodation.


In the case of Ground 5E, our concern relates to single homeless people and refugees with recently granted status who may not meet the Priority Need threshold for homeless assistance, who are placed in supported accommodation by the Local Authority as they have nowhere else to place them, rather than because they need to be, so that they can discharge their homelessness duty. Ground 5E will mean that people in this situation can now be evicted, further displacing the issue.


Ground 5E, combined with Ground 18, which allows for eviction where a person in supported living has “unreasonably refused to cooperate” with the support provider, causes great concern about provision of accommodation for those that are homeless, and offers no solutions to this problem.


2. Mandatory Ground 6A: A Burden on Local Authorities

The introduction of mandatory Ground 6A, mandating eviction when a landlord breaches a banning order, overcrowding improvement notice, prohibition order, or refuses a license, puts additional strain on local authority homelessness services. While tenants should not endure substandard conditions, this ground does not consider the practicality of rehousing tenants or improving conditions, potentially overburdening the already stretched resources of local authorities.


3. Inadequate Enforcement and Funding

Enforcement of the new regulations falls largely on local authorities which in turn requires proper funding and staffing in order to be effective. However, the Bill does not outline how these enforcement actions will be adequately supported. It also fails to acknowledge the fate of existing selective licensing systems and their funding from license fees alongside the new national registration scheme. Further concerns remain with how the Bill will work in practice and how Local Authorities will be compensated in order to deal with greater enforcement action.


4. Lack of Transitional Arrangements and Increased Pressure on Housing Services

The absence of clear transitional arrangements in the Bill is concerning, as it may result in a surge of rent increases and eviction notices before the new law takes effect. Given the existing strain on the housing market and local authority homelessness services, managing this increased demand for housing poses a significant challenge. The Bill, once again, fails to account for these pressures and the need for wider solutions to address the housing crisis outside of technical reforms to laws around possession.


In a debate secured by Dan Carden M.P. on the 24th May, 23 on Private Rented Sector Regulation, the government were questioned over the increased provision for local authorities to tackle landlords under the Bill. Their response mentioned “In accordance with the new burdens doctrine, we will ensure that, where necessary, the net additional costs that fall on local councils as a result of our reforms are fully funded, and we will continue to explore how best to create a sustainable self-funding system over the long term, including through fees.” Confirming our worries that there is no provision and a transitional arrangement has not yet been considered.


Finally, the “Pending” Promised Legislation


The Renters Reform Bill fails to include promised legislation, the first being the introduction of "Decent Homes Standard" to the private rental sector. Secondly, making DSS (Department of Social Security) discrimination illegal. The delayed implementation and lack of clarity on enforcement and oversight raise concerns about the future effectiveness of these reforms.


Conclusion


The Renters Reform Bill, in its current form, falls short of providing adequate protection and security for tenants in the private rental sector. Its amendments to rent increase control, eviction grounds, and enforcement mechanisms are largely inadequate and fail to address the root causes of instability in the rental market. To truly address the housing crisis, comprehensive reforms are needed, backed by robust enforcement measures and sufficient funding for local authorities. Only then can we hope to provide safe, stable, and secure homes for all renters. We will continue to challenge this government and future governments to improve protections for tenants and resolve the housing crisis.






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