Plan Insurance Blog

Government Unveils Rental Reform Plans

It’s the biggest legal reform to the rental sector in over the last 30 years. It’s blindingly obvious which side it favours.

After bated breath from Landlords, the Government has finally revealed its rental reform plans in the Renters (Reform) Bill. These proposed changes are the most significant the private rental sector (PRS) has witnessed in over three decades, with the removal of Section 21 repossessions being the biggest for property owners.

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While the Government offers reassurances, NRLA Chief Executive Ben Beadle raises concerns about the lack of crucial details. He worries that the government isn’t thinking about the commercial viability of being a landlord, and are ignoring the long-term effect this will have on stock in the rental sector.

Key takeaways from the bill

The Renters (Reform) Bill aims to equip tenants’ with rights, aligning with the Conservatives’ manifesto promises. Key rights outlined include:

Abolishment of Section 21

Section 21 has long provided a fast and effective means for landlords to regain possession of their property for various legitimate reasons, such as selling the property or personal use.

Easier Property Recovery

The Bill promises to facilitate a more straightforward process for responsible landlords to recover their properties from anti-social tenants or those who refuse to pay rent.

Digital Property Portal

A new digital Property Portal will be introduced to streamline the eviction process and enhance efficiency.

Ombudsman for Dispute Resolution

The Bill establishes a new Ombudsman to offer quicker and more cost-effective resolutions for disputes, reducing the reliance on lengthy court proceedings.

Pet Ownership Rights

This is massive for many tenants who feel barred from pet ownership. Tenants will have the legal right to request to keep pets in their homes, and landlords cannot unreasonably refuse this request. Though the NRLA welcomes the requirement for tenants to obtain pet insurance to cover any potential damages.

Many landlords have concerns, with good reason

While the Bill outlines the proposed changes, there is a significant lack of detail. Landlords require a clear understanding of how these provisions will work in practice to maintain confidence and ensure continued investment in the sector. Without proper reassurance, there is a real risk of exacerbating the current rental supply crisis, leading to even more landlords withdrawing from the private rental sector completely.

It’s a great point that is often overlooked. Properties will only be in the rental market if it is possible for Landlords to view it as a viable investment.

The Bill disappointingly lacks clarity on important aspects, such as the practical implementation of property recovery from problematic tenants and the functioning of the digital Property Portal. The bill doesn’t give detail about the design and operation of the proposed Property Portal, leaving landlords uncertain about its functionality and usability.

If the implementation of Making Tax Digital is anything to go by, the Government’s track record with tech transition isn’t stellar.

To instil confidence, the Government needs to provide clear plans to expedite the court process for legitimate possession claims and increase staffing to ensure the system operates effectively.

Another noteworthy concern is the lack of progress regarding student tenancies. Open-ended tenancies may prove challenging for students, as it hinders their ability to plan around the academic year and risks a shortage of available rental properties. Scotland’s experience with similar rules demonstrates housing emergencies for students, with some unable to secure housing for their university placements.

What’s the future of the rental market?

While the Renters (Reform) Bill has been published, it still faces several hurdles before becoming concrete law. The NRLA continues to advocate for a workable solution that considers the interests of both landlords and tenants in the student sector.

The Government’s rental reform plans will introduce significant changes to the Property Redress Scheme (PRS). This is the code that currently, amongst other elements, requires landlords to ensure that they provide housing that is “safe and without risks to health” whilst also only use letting and management agents who are members of an accredited body, are members of an independent redress scheme.

The Government has pledged to extend the Decent Homes Standard to the private rented sector, prohibit blanket bans on tenants with benefits or children, and enhance enforcement powers for councils while introducing a reporting requirement. However, specific details regarding these commitments remain lacking.

While the proposed measures aim to enhance tenants’ rights, it is essential to address the concerns of landlords by providing clarity and reassurance. The NRLA will continue to collaborate with the Government, MPs, and Peers to ensure a fair and workable Renters (Reform) Bill that benefits responsible landlords and tenants. We hope that some significant changes are made to make the system more practical and workable for everyone.

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