Rental reform - what is the latest and when might it be introduced?
Rental reform has been in the offing for some time – but kept on ice by the pandemic. However, with restrictions easing, the government is set to release a white paper this autumn outlining some of the most wide-ranging reforms to the private rented sector for a generation.
Here, we take a look at the context to rental reform, what is set to be introduced and what it could mean for landlords moving forward.
A long time in waiting
Widespread rental reform was first mooted in the Conservative Party manifesto for the 2019 general election, which the Tories won with a thumping 80 seat-plus majority. As part of its better deal for renters, it said rental reform would scrap Section 21 and introduce the concept of lifetime deposits.
In the 2019 Queen’s Speech, it was said that rental reform would be included in the legislative programme for 2020, but then the pandemic happened and inevitably put any other business on hold.
Very little was heard about the plans, other than a few hints here and there from ministers, until the Queen’s Speech in May 2021, when the government said it would bring forward rental reform in the coming Parliament. It also announced the aforementioned white paper to set out exactly what the reforms will look like.
Once the white paper has been issued, it’s expected that the Renters’ Reform Bill will start its journey through Parliament shortly after – which could be the end of this year or the start of next.
We have a strong idea of what the rental reforms will include, with much talk of the abolition of Section 21 and replacing it with beefed-up Section 8 notices. Meanwhile, the idea of lifetime deposits following tenants around and making renting more affordable and simpler has been heavily mooted.
While the changes have broad cross-party and public support, there is likely to be some opposition to the Bill when it eventually makes its way through the Houses of Parliament. If it’s anything like the Tenant Fees Act, it could take a considerable amount of time to reach Royal Assent.
So, while rental reform is very much on the cards, and seems certain to come in at some point, there are no guarantees over when exactly this will be. It seems unlikely it will be introduced before the mid-point of 2022, at the very earliest.
What would rental reform mean for landlords?
Landlords and landlord bodies have voiced their displeasure at the idea of the scrapping of Section 21, arguing that Section 8 notices – even beefed-up ones – are too much of a blunt instrument when it comes to regaining possession of a property.
The idea of lifetime deposits has been more warmly welcomed, although some have questioned how these will function in reality.
It certainly seems likely that eviction will become more difficult in the future, with the government instead trying to push mediation as much as possible where disputes occur.
Although the eviction ban ended some months ago, there are still a considerable number of cases working their way through the courts, and landlords may have got used to seeking alternatives to eviction wherever possible.
With the seemingly inevitable abolition of Section 21 at some point, you may want to prepare for the future now by only using eviction as a very last resort. Eviction can sometimes be a necessary evil, but in a large number of cases mediation and other avenues could prevent the need for evictions to take place.
The rental market is certainly going to change to quite a large degree after the Bill passes – which seems certain at some point – but for now we can only deal in speculation and maybes. The uncertainty is undeniably frustrating for landlords, agents and the industry at large, but we should know more this autumn when the White Paper is finally released.
What will actually be included in it is still up for debate, and it is likely there will be further amendments before the Bill is launched and during its journey through Parliament as well.
But the next few months should paint a much clearer picture about what landlords can expect with regards to rental reform, to ease some of the uncertainty that the market has been experiencing since the idea of rental reform was first pushed in December 2019.
There is no exact date yet for the White Paper, but it’s hoped more might be revealed at the Conservative Party conference in Manchester in early October, if not before. The event usually sees one or two major property announcements, and this year is expected to be no different.
In the meantime, a good, experienced letting agent can help you to get the most from your rental properties. And, once we know more about the incoming rental reform, they can help you to come to terms with what it means for your rental property or properties.
Here at Howland Jones, our offices are based in the village of Measham in the East Midlands, and we operate within a 20-mile radius of our base, giving us extensive knowledge of the local area. Measham sits on the border of four counties and we are almost equidistant from Derby, Leicester, Nottingham and Birmingham.
To find out more about our lettings services, you can check out our page here. You can also get in contact with us today, to find out what we can do for you.