Peter Littlewood, co-founder of iHowz landlord association, discusses what we can expect from the Renter’s Rights Bill following it’s second reading, and how landlords can best prepare.
Is the Labour Government really trying to decimate the Private Rented Sector (PRS), or are they merely carrying on the job started by the Conservatives?
As I am sure you are aware, Labour has introduced the Renters Rights Bill, and it has just recently received its second reading in Parliament. This Bill is very much the son of the Conservatives Renters Reform Bill, but with any concessions removed. It’s clear the Government is pushing hard to make it law as soon as possible and will be tough on any future proposed amendments – after all, they do have the majority. Additionally, I think they assumed they would get complete Conservative support, precisely because it is the spitting image of the Reform Bill.
But interestingly enough, the Shadow Secretary of State, Kemi Badenoch, opened the debate for the opposition in the second reading by saying that it was the son of the Conservative’s Bill, and then went on to virtually rubbish the Renters’ Reform Bill, saying that they recognised it had many problems, which is why they hadn’t brought it in.
Politics is a fickle game!
As I am sure you know by now, when the Rights Bill becomes law, it promises tenancies for life. As such, the landlord will need a reason (Ground) to be able to recover their property, and many of these grounds are discretionary – i.e., at the discretion of the court whether to grant repossession or not.
Set this against the twin evils of an overcrowded/lengthy court system and judges with insufficient knowledge of rental law, the future is set to become rocky for some landlords- but not all. It should be remembered that according to the English Housing Survey (2022/23), 63% of tenancies were ended by the tenants, not by the landlords.
And of course, we have the spectre of anti-landlord taxation in the budget at the end of October. We wait to see what joys that brings.
All this is a good indication of lack of Government joined-up thinking, and a politician’s requirement to play to the crowd. It looks good to the majority of voters to continually criticise all landlords, without recognising the vast majority are extremely well meaning. This landlord-bashing, coupled with the Government’s inability to provide sufficient housing (especially genuinely affordable housing or Government assistance for first time buyers), has led to this self-made housing crisis.
And, by the way, I lay the blame at all the parties, whatever colour.
On the positive side, it was nice to see the Secretary of State open the second reading debate stating: ‘I want to be clear from the outset that this Government recognises the important role of landlords, most of whom provide good-quality homes for their tenants.’ That was encouraging, apart from the fact she then went on to say, ‘but this is a sector in serious need of reform’.
Should landlords be worried?
Not especially, provided they remain calm and professional they should be able to survive – remember, the PRS houses some 20% of the UK population; that would be many people on the street if landlords continue to leave the sector en-masse.
Make sure you prepare for the future:
- Review your existing paperwork
- Review your portfolio and your existing tenants (MFB offers complimentary portfolio reviews to help you review your finance options)
- Strongly consider guarantors
- Reference all prospective tenants and occupiers
- Consider rent guarantee insurance
- Have good check-in/check-out procedure
- Ensure regular inspections
- Don’t allow rent arrears
- Don’t forget new rent might take months
If you treat your business seriously, ensure you have dependable tenants (albeit this is easier said than done), and don’t allow debts to get out of hand, you should be OK.
And the outcome? Only extremely dependable tenants who are able to get excellent referencing will be offered rental homes. Tenants who must be evicted will now suffer a Section 8 notice, thereby gaining a record of the grounds which was avoided with the use of Section 21. If the Government think that by discontinuing the Section 21, the level of evictions will drop radically, I fear they will be proved incorrect.
And the eventual losers; the tenant!
