Carter Jonas responds to the Rental Reform White Paper

As part of its levelling-up agenda, on 16 June 2022 the Government finally released its long-awaited Rental Reform White Paper. The paper sets out some major changes to the rental market in what it says will make ‘a fairer private rented sector’ and ‘a new deal for renters’. There were many measures introduced but here we consider the key features: -

• The most controversial measure is undoubtedly the abolishment of the ‘no fault’ section 21 notices which landlords can use to terminate tenancies without giving a reason. Most section 21 evictions are only used in cases of several months of non-payment or anti-social behaviour, and landlords are generally reluctant to use them. However, knowing that they may not be able to get a property back when required, may be enough to force landlords to leave the market. It may also deter many would-be landlords from entering the market, fearful that they may never get their property back or that they would need to enact court proceedings to do so. The time taken to take these issues to court has also been rising dramatically recently, and these measures will only exacerbate this.
  
  While the paper does ‘recognise that landlords’ circumstances can change’ and therefore they intend to introduce a new measure for those who wish to sell or move family into the property – the implementation of this measure is not yet clear. Landlords will need to fully understand this measure once it is fully defined in order to feel more secure with the process. 


• A further measure to move all tenancies to periodic tenancies rather than agreed lengths, means that tenants are able to leave quickly and easily when their circumstances change, but the landlord will still need to give a valid reason to end the tenancy, defined in law. This again puts the landlord at a major disadvantage, and we are unsure how this will work in practice


• Pets are now to be a ‘given right’ in tenancies and the landlord cannot unreasonably refuse them. This has been a major issue for many tenants over recent years, and this was reflected recently in our latest Tenant Survey. However, many landlords would gladly accept pets, providing the property they own is suitable, does not have any imposed restrictions and if they were allowed to adjust the damage deposit to reflect this. It is normally accepted that many types of pets will cause additional wear and tear on a property and a higher deposit is justified to cover that. However, the government abolished this in 2019 and landlords were therefore forced to simply not accept any pets as there was no way to guarantee that potential damage would be covered.  We do note though that the government is considering the ability to request pet insurance which would be a positive step.

There are clearly some benefits to the proposal in terms of the perception of the sector, one in which private landlords are often labelled as unscrupulous fat-cats, but this is simply not the case of the vast majority of landlords. Crucially, the proposals do offer tenants more security and flexibility of tenure, and this has been one of the most requested changes to the system by tenants in many of our previous tenant surveys.

Overall though, the legislation is bound to further reduce the number of private landlords in a sector that has been plagued by a plethora of tax rises and increased regulation for almost a decade now, and where thousands of landlords have already left the market as a result.

The dwindling supply of property lets is driving up rents in almost all areas of the country, and these new measures will do nothing to aid in any increased delivery of private rented, lettable properties. For years now, local councils and authorities have been neglecting to build or increase their social housing, resulting in many households having to move into the private rented sector. Whilst some measures will help vulnerable tenants it does seem that overall private landlords are having too many legislative measures imposed on them when they have been providing valuable homes, taking up the slack, and providing necessary properties to meet the insufficient property numbers required.