Around 5 million houses are rented in the UK, with demand expected to rise as property prices continue to rise. Add in higher interest rates, and we’re likely to see even more people opting to rent homes as many are priced out of buying their own home. With more renters comes greater attention on the private rental sector (PRS). But why and what is meant by a fairer private rental sector?
Why the need for a fairer private rental sector?
The UK Government released a white paper on 16th June 2022 exploring the dynamics of a fairer rental sector. Here, we delve into the white paper to see what it suggests and the likelihood of reform in the PRS.
“Everyone has a right to a decent home. No one should be condemned to live in properties that are inadequately heated, unsafe, or unhealthy.” Those are the opening words of the white paper from housing minister Michael Gove.
According to the white paper, millions of tenants in the UK are paying to live in homes that aren’t fit for purpose. The Fairer Private Rented Sector report aims to redress the balance between landlords and the four-million-plus tenants renting privately.
What are the key talking points of the white paper?
The white paper covers a broad range of topics, with measures forming part of the Renters Reform Bill that was announced in the Queen’s Speech. And introduced into parliament towards the end of 2022. Some of the key points include:
The report forms part of the Department for Levelling Up’s broader reform agenda to improve lives and level up the country. It’s important to note that the report indicates 88% of private rented homes are of good quality. And landlords perform their duties, such as arranging repairs and maintenance.
However, around 12% of households are believed to pose an imminent risk to tenants’ health and safety. That equates to approximately 1.6 million people who could be living in dangerously low-quality homes.
The UK Government has shaken up the PRS in an attempt to force up the quality of accommodation offered by the 12% of rogue landlords. However, the sector is being split, as this means that the 88% of landlords that offer households in good repair are being penalised which isn’t seen as balanced or fair.
The removal of Section 21
The paper recommends removing Section 21, which allows landlords to terminate a tenancy. Without giving any reason outside an Assured Tenancy Agreement (AST). So-called ‘no fault’ evictions would come to an end.
Other important highlights of the white paper include the following:
- No blanket ban for tenants with pets. Currently, landlords can refuse tenants who want to move in with a pet. If you’re looking for a rental property you can rent with your pet. Or if you’re a pet friendly landlord, Propertymark’s member letting agents can help you with find, or manage, pet-friendly property in your local area.
- Arbitrary rent review clauses designed to give tenants powers to challenge poor practice
- Making it illegal for landlords or letting agents to have blanket bans on renting to families with children or those in receipt of benefits
- A new Private Renters’ Ombudsman to help settle disputes between renters and landlords. Ensuring landlords can get access to their properties faster from anti-social tenants.
Where does it stand with the current housing minister?
Michael Gove was named Secretary of State for Levelling Up, Housing and Communities on October the 25th 2022 by new prime minister Rishi Sunak. Gove has previously held this role between September 2021 and July 2022. He has been praised for his previous work on the cladding scandal. Bringing him back into the cabinet will hopefully result in bringing continuity and progress to the rental and leasehold reform.
Are there any concerns for landlords and tenants?
Landlords are concerned about removing Section 21 and ‘no-fault’ evictions. Most landlords are happy for tenants to remain in the property for as long as they like. If the rent is paid on time and the tenant treats the property well. Therefore, they see something like Section 21 as a roadblock to removing anti-social tenants and ones who fail to pay the rent.
While the Private Renters’ Ombudsman will be designed to make it easier to evict anti-social tenants, there’s some scepticism due to the lack of information regarding how it will work. There are still questions, too, such as whether it’s fair for a tenant to end a tenancy at a time of their choosing while an agent or landlord must present a valid reason that is defined in law.
On the other hand, tenants are concerned that these measures won’t be pushed through parliament, leaving them vulnerable to a sector where landlords ultimately have all the power. Upheaval in the housing minister role (four in 2022) has also led to uncertainty.
What does a fairer private rental sector look like in reality?
Despite landlord concerns, it seems the Renter Reform Bill will go through parliament in some capacity. How the final version looks right now is anybody’s guess. And there are no guarantees it will include all suggestions from the white paper.
Tenants want more security and greater responsibility placed on landlords and letting agents, so they deliver good-quality homes and fair services. At the same time, most landlords want good tenants who pay the rent on time and look after the property. The Tenant Fees Act 2019 places tight restrictions on any services that letting agents can charge tenants for.
The Landlord and Tenant Act has been in place since 1953. And adds some regulations, such as ASTs, Section 21 and Section 8. But it was last updated in 2004, and many believe it’s time for a real change. That’s what the Renters’ Reform Bill sets out to do. But how it looks in practice isn’t yet set in stone.
A better renting landscape?
Change is in the air, and we’re likely to see new reforms that give tenants more powers in the next few years. Whether it’s something that both tenants and landlords feel is fair to both parties is yet to be seen.
All Propertymark members are fully versed on the latest legislation and will be able to help and advise you. Find your local Propertymark letting agent below.
Last Updated: November 22nd, 2023