Governments rental reform white paper just released by Michael Gove. Full details are due to be published when his housing minister Eddie Hughes addresses parliament later this morning.
Here are the key points:
Outlawing ‘blanket bans’ by agents or landlords on renting to families with children or those in receipt of benefits;
For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent and enabling tenants to be repaid rent for non-decent homes. This will make sure tenants can take their landlord to court to seek repayment of rent if their homes are of an unacceptable standard
Making it easier for tenants to have pets in their homes by giving all tenants the right to request a pet in their house, which the landlord must consider and cannot ‘unreasonably refuse’.
All tenants to be moved onto a single system of periodic tenancies, meaning they can leave poor quality housing without remaining liable for the rent or move more easily when their circumstances change. A tenancy will only end if a tenant ends or a landlord has a valid reason, defined in law.
Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified
Giving councils stronger powers to tackle the worst offenders, backed by enforcement pilots, and increasing fines for serious offences.
But the White Paper will also include some measures designed to placate landlords, including (as previously announced):
A new Private Renters’ Ombudsman to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court
Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to.
Introducing a new property portal that will provide a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators.
There’s going to be a row in our house today. I want OUT. I want to serve the notices today… A massive proportion of our retirement fund is tied up in rental properties and my wife just can’t see the risk we are facing.
EDIT - the absolute kiss of death is this, if it gets through:- ‘For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent’
I could (just about) live with the end of s21 even though it means our capital is locked into the properties and probably can never be fully released until a tenant decides to go. But if rent controls are truly part of the plan then we are back to the old Rent Act days when no private property ownerin their right mind ever rented a home to anyone.
But it includes: “Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to.”
I assume the tenants dont need to be anti-social for a landlord to be able to sell his property, or retire into it.
What will be the notice period for rent increases? We’ve been landlords for around 4 years and havent increased our rent in that time, but we’re thinking it will soon be time to do so. What is the proceedure to follow to do so?
Thanks
We will only allow increases to rent once per year, end the use of rent review clauses, and improve tenants’ ability to challenge excessive rent increases through the First Tier Tribunal** to support people to manage their costs and to remain in their homes.
3.1 Removing Section 21 will level the playing field between landlord and tenant, empowering tenants to challenge poor practice and unjustified rent increases
4.1 Challenging unjustified rent increases …This Government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy… When a landlord needs to adjust rent, changes should be predictable and allow time for a tenant to consider their options. We will only allow increases to rent once per year (replicating existing mechanisms) and will increase the minimum notice landlords must provide of any change in rent to two months. We will end the use of rent review clauses, preventing tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price. Any attempts to evict tenants through unjustifiable rent increases are unacceptable. Most landlords do not increase rents by an unreasonable amount but in cases where increases are disproportionate, we will make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal.
How will the Tribunal decide if rent increases are unjustified?
I’ll tell you how they will do it. The same way the Rent Officers used to decide “Fair Rents”. We’ll be stuck with rents that gradually fall behind any reasonable return on capital. Anyone who remembers the old Rent Act days, as I do, will be OUT.
One reason for perhaps accepting these changes?
3.2 Reformed grounds for possession
Recognising that landlords’ circumstances can change, we will introduce a new ground for landlords who wish to sell their property and allow landlords and their close family members to move into a rental property. We will not allow the use of these grounds in the first six months of a tenancy, replicating the existing restrictions on when Section 21 can be used. This will provide security to tenants while ensuring landlords have flexibility to respond to changes in their personal circumstances.
So if the First-tier Tribunals start to hold back rents below a reasonable level (which I think they will do, based on my very long experience extending back over 60 years) then we can elect to sell the freehold and thereby regain possession?
And with all that, I keep having problems! I’ve been looking for a 2-bedroom house for a year and a half and I’ve been politely refused… by all the agencies!
Why have you been refused? What’s your circumstances?
Problem for tenants is there are so few properties now as many landlords have sold up because of changes government have made, and the changes they may well make soon. Social housing was allowed to be bought by tenant and not replaced by government leaving huge under supply.
Therefore landlords will choose the lowest risk tenants as they have the choice. Ie No pets, full time long term employment, good credit etc.
I understand that it is only a proposal, I know that it is not a law, but that means that there is a problem… that’s why they proposed! I have heard many situations where the landlord had to lose because of the tenants. But I am convinced that in life you should not generalize, all people are different! For example, I love animals, this love of mine also implies responsibilities, I have friends who come to me and say that they don’t even realize that a cat lives in my room! I clean carefully after her because I like to live with my girls (the oldest is 17 years old and the youngest is 2 years old) in a clean house. I work full time, for an indefinite period, I also work overtime, and I have UC to take the baby to daycare. The reason why I am looking for the house is that I now live in a shared house. I need a 2 bedroom house for me and my girls, and I am politely refused.
Only when youve given someone a chance with a dog and then faced the consequences of an irresponsible owner would you perhaps really understand the pet thing.
Personally i see cats as much lower risk and do consider cats. Tenants forget they are living in someone else house. “Their house their rules”.
50 plus applications for a single property is almost normal, why choose someone with a dog, more time, more hassle, high risk. No chance of recovery of loss from tenant. Just far too many reasons why not to go this route (been discussed on here hundreds of times).
DSS rental arrear stats dont lie. I think the issue is the blanket banning which is unfair. I am quite happy with someone who works and claims a benefit.
The changes are too heavy against LL and do not fix the system, it makes it worse for tenants. Landlords will be even less likely to take on benefit tenants as the new laws will make them even harder to evict, this will force landlords to choose the absolute lowest risk tenant, whereas before at least they had a chance.
Best thing any tenant can do is write to their MP protesting against the changes, more specifically LL must have a fast eviction process for problem tenants. Housing allowance must be paid direct to the LL as standard and tenant should not be able to change this. Currently HB goes direct to tenant! Also there needs to be a much higher bond allowed. 5 weeks rent cap is simply not enough especially for people with dogs.