Abolishing No-fault evictions & Rogue Landlords
On 15 April 2019, the Government announced: “Private landlords will no longer be able to evict tenants from their homes at short notice and without good reason.” This was followed by a consultation process which ran between July and October 2019.
The consultation paper proposed the abolition of section 21 of the Housing Act 1988. This is no-fault eviction ground that allows landlords to seek for possession of their properties without reason.
MP’s have recently stated that the Government risks undermining its plans to ban the no-fault evictions unless it fixes delays in the court system, says the cross-party Levelling Up, Housing and Communities (LUHC) Committee.
The report warns that the Government’s proposed grounds that would replace the no-fault ground, which are sales and occupations grounds, in the White Paper could be “too easily exploited by bad landlords and become a backdoor to no-fault evictions”. The Committee recommends a series of changes to the sales and occupation grounds to help combat unfair eviction and insecurity of tenure.
The report welcomes the Government’s plans to introduce a legally binding decent homes standard (DHS), but points to a series of obstacles threatening the ability of local councils to enforce the standard, including precarious local government finances, shortage of qualified enforcement staff, and a lack of reliable data.
The report recommends the Government introduce a tougher civil penalties regime in the proposed renters reform bill to ensure councils have the capability to collect financial penalties on landlords who breach standards.
Clive Betts, Chair of the Levelling Up, Housing and Communities Committee, said:
“By its own admission, the Government’s White Paper did not address the underlying cause of the affordability crisis in the private rented sector, namely the decades-long failure of successive Governments to build enough homes. Only a significant increase in housing, particularly affordable housing, will ultimately tackle the rocketing costs of renting for many tenants. We call on the Government to recommit delivering the affordable homes the country needs, particularly the 90,000 social rent homes needed every year.
“The Government should remedy the blight of unfair evictions and insecurity of tenure experienced by too many tenants today. From our inquiry, it’s not clear the Government fully appreciates that a creaking and unreformed courts system in England risks undermining their own tenancy reforms, including the welcome commitment to ban ‘no fault’ evictions. For landlords and tenants, it’s vital the Government now finds a practical way forward to enable courts to fast-track claims.”
While welcoming the Government’s proposed abolition of fixed-term tenancies, the report warns against applying this to the general student private rented sector market. The report finds abolishing fixed-term contracts risks making letting to students considerably less attractive to private landlords and could ultimately push up rents or reduce the availability of student rental properties, at a time when the market in many university towns and cities is already very tight. The report calls for the Government to retain fixed-term tenancies in the entire student housing sector but require all landlords letting to students to sign up to one of the existing government-approved codes of conduct.
The Committee’s report concludes that the proposed sales and occupation grounds could be exploited by bad landlords and recommend the Government:
- Increase from six months to one year the period at the start of a tenancy during which the landlord may not use either grounds; and
- increase from three months to six months the period following the use of either ground during which the landlord may not market or re-let the property.
The report notes the recent trend associated with the apparent decline of the PRS, the rise of the short and holiday-let market, particularly in tourist hotspots such as Cornwall and Scarborough. The report recommends the Government use the powers in the Levelling-up and Regeneration Bill to implement a tourist accommodation registration scheme and report back on whether the scheme could be used to allow local authorities to protect their communities from the holiday-let market.
Since 2015, the private rented sector has seen new regulation after regulation with the aim of increasing the standards of housings, driving out rogue landlords, and to prevent homelessness.
The problem is that this is slowly driving investors out of the private rented sector. The vast majority of landlords do provide at least a reasonable and safe standard of accommodation; it is only a minority of landlords that are rogue.
The Government has stated time and time again that the reason for all the new laws that Parliament churns out creating more and more regulation that landlords need to comply with is because of rogue landlords. We’ve heard MP’s mention this time and time again when introducing new laws in the private rented sector.
There are over 4.5 million privately let residential properties in the UK. But how many rogue landlords are there?
The Database of Rogue Landlords and Property Agents has operated since April 2018. Yet this database has 177 entries on it. Before the database was launched, the government claimed that 10,500 rogue landlords were operating in England.
So out of the total number of landlords in England, around 0.25% of those are rogue landlords. So why are all landlords being demonised in the media, and being subjected to so much regulation aimed at rogue landlords? We certainly don’t have the conclusive answer to that. But it is questionable as to whether the Governments approach to reducing homelessness and resolving the housing shortage is to simply make it more difficult for all landlords to obtain possession of their properties. If this is correct, it will likely be no more than a short term resolution as we see more and more landlords leave the sector and an increase in student, short term and holiday lets.
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