LATEST: Renting reform White Paper – its full shocking proposals go live

The Government has finally published its renting reform White Paper three years after it was first promised, with legislation based on its proposals not due until at least next Spring.

Introduced in parliament by housing minister Eddie Hughes (main picture) but prefaced by his boss Michael Gove, it claims to be both a game-changer for renters but also assumed that not all landlords are rogue or irresponsible and that most offer good accommodation and take their responsibilities seriously.

“We want to change the UK’s reputation as a place to both rent and own a home,” Hughes told MPs. “And we want renters to have the same peace of mind that owning your home gives.”

After months of drip-drip leaks and vague ministerial statements, the full meat of the White Paper is now there for all to see.

Within it Gove says: “This White Paper builds on the vision of the Levelling Up White Paper and sets out our plans to fundamentally reform the Private Rented Sector and level up housing quality.”

12-point plan

The White Paper outlines a 12-point plan of action. These are to ensure all PRS homes in the UK meet the Decent Homes Standard, running selective local authority pilot schemes to bolster policing of bad landlords, removing landlords’ rights to evict tenants ‘without fault’ and then give them more powers to evict, but only for set reasons.

Rents will only be allowed to increase once a year, and tenants will be able to take poorly-performing and rogue landlords to a single Ombudsman to gain redress, a scheme that all landlords will have to join and pay for.

It also promises to reduce the courts’ backlog for evictions as well as a property portal for all UK rented homes that will include information from the official rogue landlord database and details of a landlord’s compliance.
It could also be used to stop landlords from renting out properties that do not meet minimum standards.

“Mandating landlords to take a proactive approach to property management would benefit those good landlords who already meet basic requirements while simplifying enforcement for local councils and hitting criminal landlords hard,” the document says.

Careful balancing?

“We are committed to carefully balancing landlords’ privacy concerns with the need of private tenants to make informed decisions about their housing options when designing a new system.”

Investigative powers for local authorities are also being increased, as are fines, while agents and landlords will be prevented from refusing tenants on benefits without good reason, and tenants who want to live with their pets will have a ‘right’ to do so, albeit subject to a reasonability test.

Lastly, the government will work with companies to develop a ‘renting passport’ to enable poorer tenants to move home without having to stump up two deposits.

But the most radical changes are those around tenancies and tenure.

Fixed-length tenancies

The document reveals that Ministers plan to give private landlords six months’ notice of its first implementation date, after which all new tenancies will be periodic and governed by the new rules, ushering out ASTs.

By periodic, the government means fixed-term tenancies that will be pre-agreed between landlord and tenant, with tenants required to give two months’ notice at any time during that period, and landlords only able to evict them under circumstances including both ‘fault’ (i.e. rent arrears or anti-social behaviour/damage) or no-fault (i.e. to move back into a property or sell it).

“Periodic tenancies will also enable tenants to leave easily without remaining liable for the rent in unsuitable and unsafe accommodation,” the document says.

Read the White Paper in full.

Reactions

“Having waited three years for this White Paper, we had a good idea of what the rental reforms would look like, and I welcome the Government’s intention to improve the private rented sector to make it more robust and fairer for both landlords and tenants for the long-term,” says Eddie Hooker, CEO of the Hamilton Fraser Group, which operates industry schemes such as Total Landlord Insurance, the Property Redress Scheme and Client Money Protect.

“A more effective legal framework will ultimately help to create a more stable market for landlords to invest in. These proposals confirm the direction of travel, but the devil will be in the detail of the legislation. 

“Giving more power to the tenant, for example by restricting the rights of landlords to determine when a tenant should actually have to vacate at the end of a tenancy and to force landlords to accept renters that are on benefits, no matter how temporary, could send a signal that investing in the private rental sector is an uncertain and undesirable endeavour.

Driving up rents

“It’s vital that the eventual legislation doesn’t deter landlords from the sector as this will cause more landlords to exit, exacerbating an existing shortage of rental homes and driving up rents at a time when interest rates are rising faster than they have done in decades, and when people can least afford it. 

“Whilst landlords are frequently portrayed as fat-cat institutions that have no regard for tenants, the truth is that most are decent people with just one or two investment homes which form part or all of their income or retirement plans and to continue to squeeze them would be counter-productive.”

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