Expert discusses the detail of the bill
A bill prohibiting landlords from evicting tenants without justification has been published as part of the government’s plans to overhaul the private rented sector in England.
Mortgage Introducer has sought to understand the detail of the bill, to better appreciate its potential impact.
Seeking balance
David Hollingworth (pictured), associate director of mortgage broker London and Country, said strong demand for rental property remained, as aspiring homeowners grappled with high prices that required substantial deposits and large mortgage borrowing, often making ownership a stretch or even out of reach.
“Landlords therefore play an important role in meeting that demand for good quality rental property,” he said.
However, Hollingworth said tenants could find themselves in a precarious position with little security, and worries that they woild either face being evicted or rental hikes at any time.
“The Renters Reform Bill seeks to balance the needs of tenants and landlords, to give some additional security to tenants and hopefully help support good landlords,” Hollingworth said.
The headline measure of the bill was to abolish Section 21 no fault evictions, which Hollingworth said would remove the ability of landlords to evict tenants without any reason.
This should, he believed, help beef up the security for tenants and avoid some of the situations where tenants did not mention a problem for fear of being seen as ‘difficult’ and risked being turned out.
“There will also be stronger protection against ‘backdoor’ evictions, where a landlord effectively forces a tenant out, for example through a big hike in rent,” Hollingworth said.
There wiould still be an ability to increase rents according to the market price, and Hollingworth said a tribunal could be used to make an independent judgment.
Hollingworth said landlords would still be able to gain possession of a property on certain grounds, whether that was because they planned to sell it or to make it available to members of close family.
“The bill also intends to make it easier for landlords to evict tenants that have persistent arrears or due to anti-social behaviour,” he added.
Other measures included the introduction of a new Private Rented Sector Ombudsman, which Hollingworth said was intended to improve the resolution of disputes by making it quicker and cheaper.
“As well as this, there will be a new property portal, which is designed to provide a national register, aiming to help tenants and landlords; and tenants will have the right to request a pet in the property,” Hollingworth said.
Wider perspective
Overall, Hollingworth said this was a substantial shift and should bring improvements, in particular for tenants who might feel that this would rebalance things in their favour, especially around no fault evictions.
“It should not frighten good landlords and the new portal will help give tenants and local authorities more information on landlords,” he said.
The prevention of blanket bans on tenants in receipt of benefits, Hollingworth said, would also give tenants a better chance of securing a property in a tight market.
“We will have to see if there may be loopholes that landlords use to get round these measures, as this will negatively impact tenants and the vast majority of landlords that will carry on playing by the rules,” Hollingworth added.
He believed it would mark a big move for the private rented sector, and its success would be measured on how well it could strike the right balance of improving tenant security without making life any harder for good landlords to maintain control.
Landlords had faced a tough enough time in recent years, and Hollingworth said it was important that to retain good landlords rather than risk pushing more to consider exiting the market, given the pressure from rates, criteria and tax changes.
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