Renters’ Reform White Paper 2022 – Do Not Panic

The ‘A fairer private rented sector’ white paper has been published, setting out the government’s long-term vision for a private rented sector (PRS) that is “fit for the 21st century and delivers a better deal for tenants”. The announcement is important because it’s likely to be the biggest industry change in England since the Housing Act 2004. Here, we summarise what you, as a landlord, need to know.

What Is It?

It’s important to remember that a white paper means “policy documents produced by the Government that set out their proposals for future legislation,” and is therefore only a proposal; it is not yet legislation or law. Nothing is coming in with little notice. In fact, much of what the white paper contains has already been debated, such as abolishing the ‘no-fault’ eviction we blogged about in 2019.

Why Is It Important?

The Housing Act 2004 brought sweeping changes and one can argue that this will be just as big. In 2004, we saw the introduction of tenancy deposit protection schemes, council licensing, and the Housing Health & Safety Rating System (HHSRS).

This time, the most anticipated changes are the:

• abolition of Section 21 ‘no-fault’ evictions and the introduction of a simpler tenancy structure
• application of the Decent Homes Standard to the PRS for the first time
• introduction of a new Property Portal to help landlords understand their obligations
• introduction of a housing ombudsman covering all PRS landlords and providing redress for tenants

What You Need To Know

Abolition of Section 21 – The plan is to scrap assured shorthold and shorthold tenancy to periodic tenancy from the start. Tenants will have a 2-month notice period. Landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law.

Decent Homes Standard (DHS) – Giving private landlords a benchmark for property standards that will go beyond mere safety. Shockingly, more than a fifth of private rented homes are found to be “non-decent”. This standard is already in place for social renters but not for private tenants.

Property Portal – A new digital portal to help landlords and tenants understand their responsibilities and for the council to monitor ‘poor practice’. According to the government, this is not a landlord register, despite the fact that landlords will be “legally required to register their property on the portal.”

Housing Ombudsman – There will be a single ombudsman with whom all private landlords must register.

Others – There are other proposals such as a ban on ‘No DSS’, making it easier to rent with pets, and passporting deposits.

When Is It Coming In?

The entire bill depends upon Royal Assent (Royal Assent being the monarch’s agreement, required to turn a Bill into an Act of Parliament) but here are some specifics from the white paper:

Abolition of Section 21 – The government expects to implement this in two stages. The first stage will be to have a 6-month notice period, after which all new tenancies will be periodic, and the second stage will be all existing tenancies to be periodic with 12 months in between the two dates.

DHS – This requires a review of the HHSRS, expected to be completed by Autumn 2022. The government plans to run pilot schemes with local councils, presumably starting in the ‘worst’ areas, such as Yorkshire and the Humber, the West Midlands, and the Northwest.

Property Portal – According to the Levelling Up white paper, the target is to reduce the number of non-decent rented homes by 2030. The government acknowledges the need to balance the landlord’s privacy concerns and they “…do not envisage that all data will be publicly accessible.”

Housing Ombudsman – To run concurrently with the abolition of Section 21 because the government thinks “With tenants empowered by the removal of ‘no fault’ Section 21 evictions, we expect dispute resolution to be more attractive”. We don’t know what this means exactly but it is a fact that long court delays are frustrating, and the tribunal process can be intimidating; thus, an easier route must be found to resolve disputes more quickly.

Analysis

There’s no doubt the tenant experience can be improved. However, in this white paper, the focus seems to be biased towards the tenants’ poor experience rather than the protection of the landlord. It’s unclear how the interests of the landlord will be adequately protected.

The government has already implemented so many changes, e.g., the Fitness for Human Habitation Act, Rent Repayment Orders, compulsory redress schemes, property licensing, deposit protection, client money protection, the list goes on. Will this white paper have the desired effect or will it drive more landlords underground, or worse, have them selling up in droves? Only time will tell.

Are you ready to meet all the changes? Call us on 020 3588 5115 to discuss how we can help you.

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