Having had some time to think about the proposals within the renters reform bill and considering the timescale involved, which is likely to be touching on another year, potentially two. I have had some time to set down in writing some of my thoughts and comments on the proposals.
We also have to factor in and consider that this bill will be further discussed in parliament and the detail may well change over time.
With the abolition of assured shorthold tenancies to periodic, tenancies will be potentially longer or shorter, dependant on the requirement of both the landlord and tenant however, essentially the notice periods for tenants will increase from one month to two
We as a company have seen collective tenancy lengths increase (18-24 months on average) with tenants wanting to stay on for longer periods in their properties. This is long term a good thing, but a landlord MUST keep up to date with their legislative responsibilities such as maintaining gas safety certificates, maintenance, EICR updates etc etc, else considering the need to take back the property would be severely threatened.
Starting with pets. So far as I can see, there is
No real change in the law on pets.......
Contrary to what many people think, tenants are already, by default, able to keep a pet. The reason most of them can’t is because of a clause in their tenancy agreement prohibiting them. Virtually all tenancy agreements by default will prohibit pets.
The current situation (where there is a prohibition clause) allows tenants two possible windows of opportunity to keep a pet:
- If the clause is not compliant with the unfair terms rules – which require that landlords consider tenants’ requests to keep a pet and state that landlords should not refuse permission ‘unreasonably’. If the clause does not include this, then it will be invalid and unenforceable.
- The other ‘window’ is if tenants request permission. Here the landlord can either grant permission or can refuse on reasonable grounds. So if the reason for refusal is unreasonable – the tenant can keep the pet!
This is more or less what the Renters Reform Bill is saying, HOWEVER if the head lease or superior landlord states that a pet is not allowed then that will be the case. The comment "cannot unreasonably withhold consent" is very prevalent here within the bill and further comment or investigation into this section of the bill is certainly required.
Comment will also surely be made on over crowding within properties and those that are unsuitable to house pets, again we await further information in this regard.
The only new thing is the requirement for insurance against pet damage. The cost of this and also the degree of cover will surely be essential in the consideration of taking a pet into a property. However, effectively, landlords were already able to cover the cost of pet insurance by increasing the rent as a condition of agreeing to the pet. Landlords will also be able to claim against the insurance policy and / or the deposit for damage caused by a pet in a property
The incompatibility of security of tenure and the need to deal with anti-social behaviour quickly
The problem with giving tenants strong security of tenure is that it means that it is very difficult for landlords to deal with the appalling problems caused by anti-social behaviour. Which really need a swift removal of the relevant tenant so other tenants and neighbours can get on with their lives in peace.
But if it is made easy to evict anti-social tenants, this will drive a coach and horses through the security of tenure rules. And bad landlords could misuse them.
Likewise, if it is made easy for landlords to evict if they want the property back to sell, or to use for a relative, this can also provide a loophole for landlords to evict tenants they don’t like.
The abolition of section 21 now makes section 8 more prevalent and with changes being made to section 8, this then allows for the use of section 8 with 'legitimate reason' such as anti social behaviour, landlords selling the property and consistent late payment of rent.
The other issue of course for the regulatory bodies, is who is going to check (after the tenants have been evicted) that the landlord is really selling the property? Or that their relative is actually living there?
Some problems can only be solved by money & with a lack of man power i feel this feature of the bill is very difficult to uphold and monitor
One of the problems I see is that the government is trying to solve by new legislation problems where we already have legal solutions, but they are not being used effectively due to lack of funding.
For example, there are already regulations relating to the condition of the property and services. However, these need to be properly enforced by Local Authorities to be effective. And Local Authorities are unable to do this as they do not have the funds to employ and train staff to do the work.
For Local Authorities to effectively enforce the law, they need to be properly resourced.
Mandatory Redress Scheme For Landlords - every landlord will have to be a member of a redress scheme; Allen Residential are already a member of a redress scheme.
What this means essentially is that tenants will get much more protection should there be any issues with their tenancy and / or property. If you are a self managing landlord you will need to be completely up to date with all of your legislation or you may well need to seek the services of a letting agency such as Allen Residential to now make sure that you are fully compliant.
Private rented sector database - any landlord with a rental property would have to register their property onto the database so that then any member of the public can then look up the specific landlord and / or property to see if they have had any previous convictions or penalties relative to their property and its current legislative state. Whether a landlord has to load on all of their compliance data onto this portal we are not aware at this stage. Irrespective if you are a client of Allen Residential then we will have all of this catered for you within our fully managed service.
The other problem is that we don’t have enough housing. What we REALLY need is a massive housebuilding program for social housing. Many of those in the private rented sector would be far better off in social housing. Except that we do not have enough of it! Most of the best social housing has already been sold off.
So Local Authorities and Housing Associations need to be adequately resourced so new housing can be built.
The reason section 21 was brought in, in the first place, was to encourage property owners to rent to tenants. As the lack of a private rented sector was causing problems for the economy.
We already have a shortage of rented property – caused largely by landlords selling up due to increased taxation and bureaucracy.
If many more landlords sell up and their properties are withdrawn from the rental market, the current housing and homelessness problems could get significantly worse.
Do the government have a plan for this? I doubt it, and if i were a betting man, once they realise the impact this 'may' have on the market i suspect that the bill will be amended and / or different proposals made.
Landlords pay a hugely important role in the sector and are still able to operate and plan for the future.
Longer-term tenancies will prevail giving the tenants the long term security they crave and landlords an investment vehicle that they can trust.
Bear in mind that at this stage these are all PROPOSALS so may well change, everything may well change after consultation so we will monitor the situation and keep our landlord database appraised as to progress.
I for one am committed to investing in the property market 'longer term', working with my tenants to give them the property they deserve, under the legislative requirements stipulated, at a fair and reflective market rent.
I am under no illusion that as a bi product of this rents will still continue to rise, but so will the quality of the private rented stock as landlords improve the quality of their properties, working with their tenants to provide them a long term home.
For advice on renting out your property, making sure you are legally compliant and planning your long term future in property as a landlord, contact James Allen directly via phone or email as follows :-
Email :- james@allen-residential.co.uk
Tel :- 07773 412300