The Renters (Reform) Bill passed its second reading on 23rd October 2023. As is normal at this stage of a bill, there was no vote. Instead, the bill will progress to the committee stage at a date that’s yet to be announced. However, the debate on the bill was of great interest to landlords – especially on the topic of Section 21 reform.
What’s the Renters (Reform) Bill about?
- Rent. Landlords will only be able to raise the rent once per year. They will need to give at least two month’s notice.
- No more fixed-term tenancies. Tenancies will essentially become rolling contracts.
- A compulsory landlord register. Landlords won’t be able to advertise or let properties without registering.
- Landlords won’t be able to unreasonably refuse pets.
- Properties must meet the Decent Homes Standard.
- No bans on tenants on benefits or with families, as long as they can pay the rent.
- A Property Ombudsman to resolve problems between landlords and tenants.
- An end to Section 21 ‘no fault’ evictions. Landlords will have to rely on Section 8 evictions if tenants are in arrears, breach their tenancy agreements or the landlord needs to sell the property.
Will Section 21 reform be abolished?
The proposals to end Section 21 ‘no fault’ evictions caused rather a backlash in the run up to the bill’s second reading. A significant number of MPs are landlords themselves. Many felt that abolishing Section 21 would encourage private landlords to sell up and leave the sector. This in turn would make the housing shortage even worse.
During the recent debate on the bill, Levelling Up Secretary Michael Gove reiterated that the government remains committed to removing Section 21. His argument was that Section 21 gave landlords the ability to intimidate tenants, threatening them with eviction if they complained.
What next for Section 21?
While Mr Gove is committed to Section 21 reform, it will now be postponed. According to Landlord Today, Section 21 reform will only happen after courts improve the way they handle repossession cases. These improvements will include:
- Digitising court processes to make them more user friendly
- Better prioritisation of some cases such as those involving antisocial behaviour
- Improved bailiff recruitment and retention coupled with reduced admin
- Earlier legal advice and help for tenants to help them solve their housing problems
In the words of the government, it will not remove Section 21 “until we judge sufficient progress has been made to improve the courts.”
Other issues with the Renters (Reform) Bill
Also during the debate on the bill, Michael Gove acknowledged it had flaws. One area he highlighted was the student housing market. By scrapping fixed term tenancies, landlords would have no certainty that students would leave at the end of a year. Indeed, students could also leave during the year with just two months’ notice.
Currently, purpose-built student accommodation will be exempt from the proposed reforms. Privately rented properties are not. The government says it is engaging with both students and landlords, but it seems likely that the rules for all student accommodation will be tweaked as the bill progresses through parliament.
How long will it take for Section 21 reform to happen?
It’s almost impossible to know when Section 21 reform will happen. By making it dependent on improvements to the courts system, it does feel like the issue has been kicked into the long grass. With a general election looming next year, much may depend on which party or parties form the next government. Labour, which is currently ahead in the polls, is committed to Section 21 reform. So while landlords have a breathing space for now, there’s every chance that the end of ‘no-fault’ evictions is still in sight.
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About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.