Today (17th May 2023) the Renters’ (Reform) Bill has been introduced to Parliament.
The Bill will crystallise plans to abolish section 21 ‘no fault’ evictions and help renters challenge poor landlords without fear of losing their home.
A new ombudsman will be established to oversee dispute resolutions while a digital “property portal” will be set up to assist property managers in understanding their obligations, the government said.
TPI CEO, Andrew Bulmer says, “The delayed Bill is finally out, and we welcome the clarity it will bring. We will be delving deeply into the detail and then responding to the upcoming consultation. Have your say - let us know your response.
This is a flagship bill for the Tories who will be pushing to get it through before the election next year. It will create change in the sector, intended to raise standards and provide greater protection for tenants.
Key points are the removal of no-fault evictions, the application of the Decent Homes Standard, mandatory subscription to an Ombudsman, and pet and benefits friendly tenancies. There is no sight of rent control.
My prediction? It will send a shiver through BTL landlords and some will sell. A proportion of small landlords do not have the resilience or appetite to face Court processes to remove a bad tenant, however improved the system might be. One bad tenancy can wipe out the returns on a property for decades. However, they may grumble, but many will face a CGT bill to exit. Thus, after a small flurry of sales, I moot there will be no mass exodus but instead a gradual decline as some landlords exit when it suits them. The test will be whether the usual churn of new landlords continue to replace exiting landlords. If new landlords are deterred, that may fuel a decline in 'mom and pop' buy-to-let stock.
With supply down, there will be further upward pressure on rents. BTR operators and resilient BTL landlords may benefit, with larger landlords able to amortise the risk of bad tenancies across their portfolio. BTR yields, currently challenged against today's interest rates, could improve.
However, rising rents and a shift to higher quality homes will apply yet more pressure on struggling tenants, and those on lower incomes will find getting a roof over their heads even more of a struggle than now. The poorest will suffer the most unless a dramatic increase in the supply of social housing (as opposed to merely 'affordable') is delivered and fast.
Our call is clear - build more homes, including decent social homes, now. For this bill, it is important that the new protections for landlords against that minority of bad tenants are made to work, giving them confidence to stay in the game and provide good homes to the deserving majority of renters.”
