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Renters reform bill – bad news for problem tenants?

The Government’s Renters Reform Bill is currently working its way through Parliament.  Much of the commentary has focused on the removal of so-called “no fault” evictions, that is to say a notice served by the landlord under Section 21 of the Housing Act 1988 requesting possession only on the grounds that (i) the fixed term of the tenancy has expired and (ii) the landlord has given the requisite 2 months’ notice.

As a counter to this, however, and to allay the fears of landlords that it may be more tricky to remove tenants whom they no longer wish to have occupying their property, the grounds on which possession can be obtained due to the “fault” of the tenant have been loosened.  This is not necessarily all good news for tenants, for three reasons:

Firstly, buy-to-let landlords are likely to be a great deal fussier when it comes to referencing and vetting prospective tenants.  The demands for face-to-face assessments and consideration of general employability and skills are likely to be utilised more, and guarantees from third parties, such as parents or other family members, could become the norm rather than the exception.  Those in need of housing that do not fit certain criteria are therefore likely to find it more difficult to obtain any form of housing in the private sector.  This is exacerbated by population growth continuing to exceed the capacity of new housing being built.  Landlords can, and will be, choosier as to the tenants to whom they are content to rent their properties.

Second, landlords may be less likely to be as forgiving where there are late payments of rent or problems uncovered by a regular inspection.  They may feel a pressure to take action to terminate straightaway on the basis of a breach of the lease, rather than, as they might at present, simply serve the requisite section 21 notice and wait until the end of the current tenancy.

Third, a landlord who is looking to sell a vacant property within the near future may be best advised not to re-rent the property at all, rather than risk marketing the property only to those buyers who are looking to acquire a property to let.  This could result in a shortage of properties coming to market, and an increase in properties that are allowed to lie vacant for a number of months, or potentially even a couple of years.  A shortage of housing stock will put further pressure on land values, potentially increasing rents across the board as well as selling prices.

As with all such legislation, the devil will be in the detail and with tenancy security and housing costs being of great concern to the electorate and politicians of all parties, we can expect to see some charged debates and perhaps numerous amendments to the legislation before it is passed. / 01202 674425

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