By Gary Ekpenyoung, social housing expert and partner at law firm, Shakespeare Martineau
The private rented sector white paper has shifted the dynamic for tenants and landlords in the UK. The Government aims to do this by making changes in three key areas. Firstly, by improving the standard of living, securing a tenant’s financial position and simplifying the dispute process.
Arguably the biggest change is the scrapping of Section 21 notices, which ends ‘no fault’ evictions. This aims to give tenants greater security, and removes the risk of them being served notice of eviction and only having only a matter of weeks to find somewhere else to live. In order to balance the scales, the Government has also broadened Section 8, which lists the grounds with which landlords can evict tenants, for example the landlord wanting to move back into the property; the landlord wanting to sell the property or if there is antisocial behaviour at the property.
In line with these changes, the Government will also introduce a ban on 6-month and 12-month tenancies. The rationale behind this is that currently, most tenants believe that when the agreed time period has ended, they are obliged to vacate the property, whereas, in most instances the tenancy then rolls over from week-to-week or month-to-month. Although this may seem like tenants will move more frequently, it may also help happy tenants stay in homes longer as they will not feel an obligation to move after a certain time period.
A ban on rent review clauses, without the introduction of full rent control, will also be introduced to help support the financial positions of tenants. This will allow the market to determine the value of a property and that any increase in rent will be calculated using a set formula, limiting the impact that landlords have on determining rent levels. It also gives tenants more power to challenge rent increases, as it will be easier to prove that the increase is not correct according to the formula.
Another key change will modernise the dispute resolution procedure and minimise delays by supporting mediation. The Government is introducing an ombudsman which will facilitate negotiations between the tenant and landlord, with the aim of keeping disputes out of the court system. This has many benefits for both parties, including maintaining the tenant/landlord relationship, potentially minimising time taken to reach a resolution, and has the added benefit of generally being cheaper for the parties involved.
The Government is also launching a property portal, which all landlords will required to join and register all their properties on. The portal will make it easier for local authorities to identify the properties if complaints are made. It will also hold a bank of information that will help landlords comply with the law and will be an easy and accessible way for them to keep up to date with changing regulations.
It is important to remember that this white paper has not yet been enshrined into law, and due to the present political turmoil, there may be a delay in these proposals becoming law.
Despite this delay, landlords should assess their properties thoroughly and ensure they meet all standards, including that there is no damage to any of the furniture, fixtures or fittings. It is also important that the boiler, electrical appliances and fire alarms are inspected to ensure they are in good working order. This will help minimise the chance of disputes and ensure that the standard of living at the property is reasonable.
It is always better for landlords to be proactive and maintain good relationships with tenants and ensure there is regular communication. It is important that any issues that arise, such as a broken appliance or temporary rent arrears, do not escalate and become a dispute. Keeping a close eye on maintenance and standards will be especially important as local authorities become more involved in regulating the market.
While this landmark white paper is certainly a turning point for tenant’s rights, there have been checks and balances put in to ensure that the scales do not tip too much in favour of tenants. There is a danger that these changes may discourage some potential landlords renting out their properties, however overall, it will be positive for the sector by giving more security to tenants and increasing the standard of living.
