What Does The Fairer Private Rented Sector White Paper mean for landlords?

1. Section 21 will be abolished and improve grounds for possession under section 8

Section 21 will be abolished, so that landlords will only be able to evict a tenant in reasonable circumstances.

Currently, a section 21 notice can be served on tenants any time after a tenancy has started. So, by removing Section 21 the government believes the balance between landlords and tenant will become fairer.  However, the grounds of possession under section 8 will be reformed so that they are “comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property”.

There will be a new mandatory ground for repeated arrears, this will make eviction mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years.  The notice period for the existing rent arrears eviction grounds will increase to four weeks and the mandatory threshold of two months’ rent arrears at time of serving notice will remain and the court hearing process will remain.  The amount of arrears outstanding at a court hearing is no longer important. 

A new ground will be introduced for landlords who wish to sell their property and the ground will allow landlords and their family members to move into a rental property they own.

In cases of criminal behaviour or serious antisocial behaviour, the notice period for the existing mandatory eviction ground will decrease.

2.           All tenancies will be periodic

All tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy will be moved onto a single system of periodic tenancies.

Tenants will need to provide two months’ notice when ending a tenancy. Landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law.

There will be a transition period and periodic tenancies are being introduced so that both parties will better understand their rights and responsibilities.

3. Notice periods for rent increases to be doubled

Rent increases will be limited to once per year and  the minimum notice landlords must provide of any change in rent will be increased to two months.

The Renters’ Reform Bill white paper outlines plans to end the use of rent review clauses. The government will “make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal”.

4. Private rented properties will be required to meet the Decent Homes Standard

Minimum housing standards for the private rented sector (PRS) will be introduced by widening the application of the Decent Homes Standard, which currently only applies to the social housing sector.

Under the Decent Homes Standard, homes must be free from health and safety hazards and landlords must keep homes in a good state of repair. 

It will give local councils the ability to enforce the Decent Homes Standard and ensure they are able to crack down on non -compliant properties.  Also, the government confirmed their aim to upgrade  private rented properties to EPC Band C by 2030.

5. The rights of tenants to have pets in properties will be improved

The government will legislate to ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their home, with the tenant able to challenge a decision.

The Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. This means landlords will be able to require pet insurance, so that any damage to their property is covered.

6. It will be illegal for landlords to have blanket bans on renting to families with children or those in receipt of benefits

It will become illegal for landlords or letting agents to have blanket bans on renting to families with children or those in receipt of benefits (“No DSS”).  The government will also look at whether action is needed to support other vulnerable groups.

7. A new ombudsman will be stablished covering private landlords

A single government-approved Ombudsman covering all private landlords who rent out property in England – regardless of whether they use a letting agent – will be introduced and membership will be mandatory.

Penalties will be as high as £25,000 and the Ombudsman’s decision will be binding on landlords, should the complainant accept the final determination and failure to comply with a decision may result in repeat or serious offenders being liable for a Banning Order.

8. New Property Portal for private landlords and tenants

A new digital Property Portal will be introduced to help landlords understand, and demonstrate compliance with their legal requirements but the extent and nature of the portal is yet to be agreed.  It will require extensive testing to ensure it works for tenants, landlords and local councils.