Why the Renters Reform Bill is Good News for Landlords
Much has been reported about the sweeping changes anticipated in the Renters Reform Bill – but the reality is that this legislation will take a good two years of debate and modification to come into force.
Whilst the bill is under discussion, there aren’t any immediate impacts on landlords. And, after careful analysis, the Tod Anstee lettings team believes there are several beneficial outcomes to the advantage of professional landlords.
We’ve summarised some of the key takeaways to alleviate concerns and clarify what the legislation is expected to include.
Renters Reform Bill Changes to Evictions
One of the big-ticket discussions is around Section 21 ‘no fault’ evictions.
It’s correct that the bill may include the abolition of the right to serve this type of notice, but the aim is to deter unethical landlords from putting tenants in challenging positions. We’ve encountered lengthy court backlogs and temporary moratoriums over the pandemic, so many landlords have struggled to evict problematic tenants.
Removal of section 21 may prove to be a positive outcome, as long as the grounds for eviction under section 8 are strengthened, and the courts are given additional resources or streamlined processes to deal with the volume of cases. Grounds will include circumstances such as needing to move back in or sell the property, so there is no indication that landlords will sacrifice their rights to reclaim an investment property should the need arise.
A similar change occurred in Scotland, introduced in 2017 without negative market impacts.
We expect these adjustments to take time to get used to, but overall to remove bad practises, reduce bottlenecks and help legitimate eviction cases proceed significantly faster.
The Potential for Landlord Licensing
Another controversial element is the potential introduction of landlord licensing, as has already been put in place in Wales.
Individual landlords may also be asked to join a Redress Scheme, (something Lettings agents are already required to do) operating as an ombudsman in the rental property sector.
A register would attempt to:
- Tackle poor conditions in the private rental sector, currently present in around 30% of properties.
- Combine with a database of rogue landlords, and improve accountability for unacceptable living conditions.
- Raise standards across the board, particularly relevant given the chronic public housing shortage and the government’s reliance on private landlords to shore up to a net loss of 22,000 social homes in the last 12 months.
Licensing applications could be time-consuming, but one option is to commission a capable letting agent to manage rental properties on your behalf. In this scenario, your letting agent holds the licensing and handles the compliance requirements without increasing time burdens.
There are considerable benefits to letting out West Sussex properties through an accomplished agent, including the security of income, adherence with legal requirements, full tenant vetting, and delegating the management of holding deposits and dealing with maintenance issues.
We predict that if the Renters Reform Bill incorporates some form of registration system, there will be a significant increase in the number of landlords opting to use a letting agency to manage the intricacies of complying with any new requirements.
With so many advantages, it is a reliable way to save time and potentially cut back on extensive paperwork and the risk of an unsuitable tenant!
Lifetime Deposits – The Arguments for and Against
Lifetime deposits are a concept based on the ability of a tenant to pay one deposit, which moves between landlords or letting agents as the tenant relocates.
The idea is good in principle but needs further examination to deal with potential stumbling blocks such as:
- Providing for a shortfall if an outgoing landlord needs to make deductions.
- Clarification around what happens if a tenant has a break from renting.
- Giving landlords certainty that they can claim deductions for damages.
As we’ve mentioned, the government is dependent on private landlords to prop up an ailing social housing sector, so it is hoped that considerable provisions will be made to avoid hampering responsible landlords from contributing to the market due to deposit snags.
There is a likelihood that the bill will include protections for landlords to ensure they have fully supported rights to claim deductions to cover the cost of repairs, but we’ll keep a close eye on any developments.
Raising Rental Accommodation Standards
Tod Anstee lettings is proud to work with a network of outstanding landlords, offering tenants exceptional properties throughout the cathedral city of Chichester and some of the most desirable market towns and villages in prestigious West Sussex.
Universal accommodation standards are positive for experienced landlords because:
- Price competition from substandard rentals will decrease.
- The majority of quality properties will already comply with much of the reform bill.
- Fair conditions mean that trusted landlords stand head and shoulders above the market and may command better rates from tenants seeking the assurance of a long-term family rental.
Properties maintained in great condition, offering exemplary living standards, with a commitment from the landlord to deliver excellent accommodation translate to premium rental incomes, supported by the strong market need for family and professional homes in this part of Britain.
Another interesting aspect is that 13% of surveyed tenants indicate that finding rental homes accepting family pets would be a desired rental market change. As reported in our guide almost a year ago, The Potential of Pet-Friendly Properties, the lengthy introduction of the Rental Reform Bill affords landlords a significant period to consider their business strategy and select opportunities to cater to demand
Government regulations are changing regarding allowing pets in rental homes as a default standard. However, there remain clauses available to refuse pets if it would be inappropriate in a specific property.
Adapting to these expected new regulations over the next couple of years will put landlords in an assertive position to meet an evolving market head-on and maximise their profitability as a result. For more advice about preparing for the Renters Reform Bill, please contact the Tod Anstee team for expert advice from an established specialist on West Sussex property rentals.