A REAL DANGER THAT RENTERS REFORM BILL COULD END UP HURTING THE VERY PEOPLE IT IS MEANT TO HELP
Published 17 May 2021
As predicted, Tuesday’s Queen’s Speech in Parliament signalled movement in the introduction of a Renters Reform Bill, with the intention of enhancing tenants’ rights in the private rental sector.
Given that many more people are now finding themselves renting long-term, either because they are unable to buy their own home, because they need more time to save for a deposit to buy, or simply because they don’t want to be lumbered with a mortgage, the issue of tenants’ security has increasingly come to the fore.
It will be vital that while this new Bill is being formulated the detail is properly thought through – otherwise it could end up being detrimental to the interests of both landlords and tenants.
The part of the new Bill which is likely to receive most attention is the proposal to abolish Section 21 ‘no fault’ evictions.
The problem with this proposal is that if the government makes it too difficult for landlords to get their properties back – effectively making every tenancy a long-term secure tenancy, whatever it might say in the tenancy agreement – then a proportion of landlords will simply leave the market, especially ‘accidental landlords’ and those who are renting their homes out temporarily.
There is already a severe shortage in supply of private rented properties; any measure which takes properties out of the market will simply result in a bigger mismatch between supply and demand, and hence higher rents. Which might be good news for the remaining landlords, but I suspect it’s not what tenant groups had in mind when they called for reform.
The other headline proposal is the concept of ‘lifetime deposits’ which can be ported from one tenancy to the next, with the aim of speeding up and reducing the cost of moving between rental properties for tenants.
This is another good idea in theory, but is again one which could easily be tripped up in practice. The law must ensure tenants get a fair deal, but it must also look after the interests of honest landlords facing being out of pocket due to defaulting tenants or those who have damaged their property.
Politics is all about making headlines, and no doubt the introduction of a Renters Reform Bill will gain the hoped-for column inches. But unless the detail is thought through, and there is a proper balance when it comes to protecting the interests of both tenants and landlords, the whole thing could be counter-productive and end up with a shortage of available homes.
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