Landlords must stop ‘no fault’ evictions and house benefit claimants – Britain’s buy-to-let shake-up explained
But landlords will be given new protections to regain possession of their properties in cases with anti-social tenants and will be able to sell as and when they need to, the Government said.
It is billing the White Paper as a “New Deal” for renters as part of its levelling up agenda and support for the cost of living crisis.
The Government has proposed that all rental properties meet the Decent Homes Standard, the minimum benchmark that is currently in place for the social rental sector. It means homes must be free from serious health and safety hazards and be clean and usable. If homes do not meet the standard, tenants will be able to take their landlords to court to seek repayment of rent.
All tenants will move onto a system of periodic tenancies – rolling tenancies with no fixed end date – as opposed to fixed term tenancies. They will only end if the tenant decides or the landlord has a valid reason. Tenants will also get stronger powers to contest rent rises.
Tenants will get new rights to request to keep pets in their rental properties. Landlords will not be able to refuse without good reason.
It will also outline plans for a Private Renters’ Ombudsman so that landlords and tenants can settle disputes without having to pay the fees to go to court.
Housing Secretary Michael Gove said: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe and cold properties, with the threat of unfair ‘no-fault’ eviction orders hanging over them.
“Our New Deal for renters will help to end this injustice by improving the rights and conditions for millions of renters as we level up across the country.”
What will change when “no-fault” evictions are abolished?
Landlords currently have two ways to evict tenants. If they have breached the terms of their contract, a landlord can use Section 8 of the 1988 Housing Act to gain possession of the property. This involves going through the courts and landlords must be able to prove wrongdoing. If the tenant has made no breach of the terms of the contract, a landlord can evict them using Section 21. These “no-fault” evictions are much faster and less bureaucratic, and are therefore the most common type of eviction. Under new Government plans, Section 21 will be removed from the 1988 Housing Act. This is to make it easier for tenants to challenge poor practice and unfair rent increases without fear of retaliatory eviction.
Will landlords’ rights of possession be extended?
Removing Section 21 will make it harder for landlords to gain repossession of their properties unless they can prove tenant wrongdoing. To counter its loss, Mr Gove has said the Government will also introduce new, stronger grounds for eviction tied to repeated rent arrears. It will also reduce the notice periods required to evict tenants for anti-social behaviour.
But experts are sceptical. Adam Kingswood, of Kingswood Residential Investment Management, a buy-to-let specialist in Nottingham, said: “If it is done wrong, it will be a major problem. There is a significant risk to the market. If it gets to a point where there is too much risk that landlords won’t be able to get their properties back, it will be a huge deterrent to new landlords, as well as an incentive for existing landlords to sell up.” Some landlords are acting preemptively. Last month, Telegraph Money spoke to one buy-to-let investor who chose to evict her problem tenant early, rushing to use Section 21 before it disappears.
What will the Decent Homes Standard mean for landlords?
The Government wants to halve the number of poor quality private rental properties by 2030. To do this, it plans to introduce the Decent Homes Standard, which currently sets minimum standards for social rent properties, to the private sector. The standard measures to what extent a home meets a “reasonable state of repair”. An estimated 800,000 private rental sector properties will need to be upgraded. The cost of upgrading a three-bedroom property typically sits between £12,000 and £15,000.
Will landlords be forced to accept pets?
Under the plans, tenants will have new rights to request to keep pets in their properties and landlords will not be able to refuse without good reason. However, it is understood Mr Gove will grant landlords powers to request tenants with pets have insurance to cover any potential damage as part of his rental reforms.