Whilst we eagerly await the rental reforms, there seems a lot still up for discussion about their impact on the industry. Most recently, highlighted by an influential group of MPs who together constitute the Levelling UP, Housing and Communities Committee. They have urged the Government to rethink their plans in their wake of responses of both landlords and tenants.
The most recent Committee report, whilst an interesting read, is a good 78 pages long. So I’ll do my best to summarise the key arguments in respect of tenancy rental reforms impact and gaining possession! Together with the Committee proposals.
Abolishing the section 21 notice and creating a system of periodic tenancies
One of the most headline-grabbing changes is the removal of the contentious section 21 notice. Motivated by the Government’s view that the existence of section 21 leaves tenants feeling insecure. Exposing them to the risk of eviction and preventing them from being able to confidently challenge bad landlords.
Under the proposed new system, tenants can end the tenancy by giving two months’ notice at any time. With the abolition of section 21 notices, landlords on the other hand will only be able to evict in reasonable circumstances as allowed by legislation. Cue the redrafting of the grounds for possession…
The Committee report notes submissions by both landlords and tenants. That this change removes choice and security. And there exists a call for fixed terms to be used where both parties agree. Which could be particularly useful with regard to private student accommodation. Which is a whole area of significant concern and debate on its own.
The Committee in its recommendations supports the proposal to prevent tenants from giving two months’ notice to terminate within the first 4 months. Thereby creating a 6-month minimum tenancy. And avoiding all tenancies effectively at risk of being short-term lets. This will provide some comfort to landlords, particularly given the tenants’ current ability to end the tenancy on giving just one months’ notice.
Rental Reforms impact on grounds
The report accepts that both landlords and tenants agree that section 21 could only be considered alongside proposals to reform the process for gaining possession under section 8.
Landlords are of course concerned that the grounds are insufficient. Tenants on the other hand are concerned about the introduction of the sales and occupation grounds.
Rent arrears is, of course, the most common ground for possession. The report highlights that landlord groups have pushed for the removal of the need for a hearing on rent arrears grounds. Given it’s an easily provable fact. This would lighten the burden on the courts, because a significant percentage of section 21 possession claims were for rent arrears.
Tenants, of course, oppose any rent arrears mandatory ground and feel their circumstances should be taken into consideration.
The report highlights a push for a pre-action protocol to encourage tenants to address their debt. To avoid them being passed from one landlord to the next. Early communication is something we encourage at Woodstock. We often support landlords in resolving rent arrears issues with their tenants without the need to go to court. But, the concern is that the introduction of a protocol would be more red tape. It would increase costs and the time it takes to gain possession.
Rental Reforms impact on anti-social behaviour grounds
As part of the reforms, the Government proposes to reduce the notice period (currently 2 weeks) and consider expediating possession proceedings. Landlord groups, however, agree the bar is too high and fails to allow landlords the ability to evict tenants. Even those guilty of repeat low-level, anti-social behaviour, and it forces them to wait for a conviction.
The report highlights our own experience, in that it is hard to prove anti-social behaviour in court. Given the understandable reluctance of witnesses, who may be faced with having to live with or near to those against whom they have given evidence.
Tenants feel the ground should remain discretionary and cite the link between anti-social behaviour and mental illness. Or, a misconception of the behaviour of those who are neurodivergent. Together with the position that everyone should be allowed the opportunity to challenge accusations that they have engaged in anti-social behaviour.
Sale and Occupation Grounds
Tenant groups seem to accept that these grounds are necessary. But, demonstrate concern that these will become the de facto no-fault grounds. Tenant groups are pushing to extend the period from the start of the tenancy. Whereby protection against the use of this ground is provided (the current proposal is 6 months). Extend the notice period from two to four months, increase the burden of proof and, in the case of sales, require a suspended possession order until contracts are exchanged.
Ben Beadle’s, NRLA, support of the requirement for landlords to evidence their intention to sell so long as it was not overly burdensome was referenced. As was his agreement that more should be done to support the sale of properties with tenants in situ.
The Committee in response recommends that the Government: –
- Increase the period at the start of the tenancy within which the landlord cannot rely on either ground to one year,
- Extend the notice period to four months,
- Increase the period following reliance on either ground to 6 months before the landlord can re-let and finally,
- Require landlords to advertise the property for sale with sitting tenants for 6 months before the eviction notice can be served.
The Government has to date ruled out the introduction of a specialist housing court in its proposals. Yet stands by increasing efficiency and timeliness within the system. Introducing wide-ranging reforms to tackle those areas that cause the most delays and looking to fast track urgent cases, such as those concerning anti-social behaviour.
At Woodstock, we regularly experience first-hand how broken the current system is. And we struggle to see how the court would cope with an increased need for possession hearings under the proposed new system. As noted in the report, some courts are worse than others. Therefore creating a postcode lottery in terms of how long it takes to regain possession.
In its final recommendation on tenancy reform, the Committee recommends the Government give further consideration to the introduction of a specialist housing court. And further, whether it follows this recommendation or not, it is “essential” that the Government increases the courts’ ability to deal with possession claims quickly and efficiently. Prioritising claims in respect of rent arrears and anti-social behaviour.
The report goes as far as to say that the Government should commit to meeting this target before abolishing section 21. Which is welcome news for Landlords given the amount of work required to achieve this objective.
The report is an interesting read concerning Rental Reforms impact. And in addition to the above, it covers the debate around housing conditions and enforcement, student accommodation, affordability, alternative dispute resolution and a positive renting experience for all. For the full report grab a cup of tea (or a pot) and use the following link:
Keeping you posted on the impact of Rental Reforms
Whatever the Government’s response to the report, we can be certain that change is coming our way. We’ll keep you posted and help you navigate those changes so you can successfully manage your portfolio.