The focus of the Renters Reform Bill - brought to Parliament on 17th May 2023 - was anticipated to change the way landlords can regain possession of their property. National law firm Dutton Gregory says reform is necessary, but in its current form, the Bill is not the answer.
Gina Peters, Head of the Landlord and Tenant department at Dutton Gregory, has specialised in residential landlord and tenant law for 22 years. She has advised clients through the Landlord and Tenant Act 1985, the Housing Act 1988 and 1996, and the Deregulation Act 2015 – and now the 2023 Renters Reform Bill. Gina also recently released the award-nominated book: ‘Lettings Law for Property Professionals: Your Legal Questions Answered’, which provides a firm basis and reference for many regularly asked about legal topics.
Gina Peters said: “With one in five households now renting, the private rented sector is an essential part of the housing market. As the government has reduced its housebuilding strategy for all local authorities from mandatory to advisory, with some councils scrapping targets all together, the housing market is shrinking in relative terms. With fewer houses being built, and no Help to Buy scheme, more renters will be stuck renting for longer. Meanwhile, the Renters Reform Bill – which creates a big change to the way landlords can regain possession of their properties – is being brought in at a time when some are already looking at selling their buy to let portfolios.
“Whilst there is widespread support for raising the standards of private rented properties, interestingly the Decent Home Standard is notable for its omission within the Bill. The latest tranche of regulation and rules however are a step too far for some landlords. Recently, the sector has become a target for the press on the basis that a minority of landlords cause problems for tenants in the lack of care for their properties and the people they house. However, rented properties create independent living for millions – and contribute hugely to the British economy – so, we need a piece of legislation that works with landlords, rather than against them.
“Related to these reforms, where is the pledged investment in our court system? The government have shied away from creating a Housing Court. Never in my 27 years as a lawyer have I felt more embarrassed by the delays and unhelpful decisions produced by courts. A client who requested a warrant for possession through me back in November 2022 is still waiting for an eviction date. With the latest crises in London courts, and bailiffs requiring more personal protection equipment before carrying out evictions, he will be waiting even longer. With significant rent arrears when the order was made, he is losing £1,500 per month until the tenant leaves, meanwhile his mortgage payments have risen in line with interest rate increases. Where is the justice in this?
“There is a very real danger that this Bill will be the last straw for landlords and there will be an exodus from the sector, with many more previously let properties being put up for sale. This will add to the already shrinking housing stock available to rent, and consequently with rental properties in high demand, rents could continue to surge.
“Over the years, landlords have faced increasing demand to improve their stock and make it safer for tenants. That is no bad thing, but the higher cost of living affects everyone – including landlords. As interest rates continue to rise and impact mortgage repayments, the investment within the rented sector and the yield available – following the required improvements – is shrinking. Further effective lobbying is clearly needed on the details and implications of this Bill if it is to benefit all parties, otherwise securing a rented property is going to become much harder.
“Even once the changes to the reforms are finalised and in place, what the Bill really needs to address is the infrastructure for landlords seeking possession of their properties for genuine reasons. Default in rental payments as debt rises, rising antisocial behaviour and a need to sell the property to realise the capital, are some of those reasons. All the rules can be in place, and are currently, but without a court system that works to support such situations, landlords will continue to feel persecuted by a broken system and this will not improve the current housing crisis.”