How we live … securely: Government announces reforms to the private rented sector

5 minute read
17 June 2022

The Government has published its Fairer Private Rented Sector White Paper as part of "the biggest shake up of the private rented sector in 30 years". This is a component of a proposed much wider legislative programme of reform in the residential landlord and tenant arena. The proposals aim to set minimum standards for the quality of private rental housing and deliver a tenancy structure that provides greater security, stability and rights of redress for the consumer.

This broad package of reforms is anticipated generally to apply to landlords across the private rented sectors, including those in the build to rent, co-living, student housing and senior living sectors. Landlords operating in these specialist sectors will need to engage actively in any consultations around the emerging legislation to try ensure that the "one size fits all" approach of the proposals does not have unintended consequences for them.

In the White Paper the Government commits to:

  • Deliver on their levelling up housing mission to halve the number of non-decent rented homes by 2030 and require privately rented homes to meet a legally binding Decent Homes Standard (DHS) in the private rented sector for the first time.
  • Accelerate quality improvements in the areas that need it most. This will start with pilot schemes with a selection of local councils to trial improvements to the enforcement of existing standards and investigate different ways of working with landlords to speed up adoption of the DHS.
  • Abolish section 21 "no fault" evictions and deliver a simpler, more secure tenancy structure. This will be done by moving all tenants who would previously have had an assured tenancy or an assured shorthold tenancy onto a single system of periodic tenancies. This will allow:
    • Tenants to leave poor quality homes without remaining liable for rent or to move more easily when their circumstances change.
    • Landlords to recoup the costs of finding a new tenant and avoid lengthy void periods, as tenants will have to provide two months' notice when leaving a tenancy.
    • Tenants to be evicted only in reasonable circumstances that will be specified in legislation.
  • Students living in the general private rental market will be included in the reforms but Purpose Built Student Accommodation will be exempt,
  • Reform grounds for possession to make sure that landlords have effective means to gain possession of their property where necessary. . There will also be a new ground of possession for repeated serious arrears so that eviction is mandatory where a tenant has been in at least two months' rent arrears three times within the previous three years.
  • Only allow rent increases once a year, end the use of rent review clauses and improve tenants' ability to challenge excessive increases via the First Tier Tribunal. Any change in rent will require two months' notice and there will be a limit on the amount of rent a landlord can require in advance.
  • Strengthen tenants' ability to hold landlords to account and introduce a new single Ombudsman that all private landlords must join regardless of whether the landlord uses an agent. The Ombudsman's powers will include compelling landlords to issue an apology, provide information, take remedial action and/or pay compensation up to £25,000.
  • Work with the Ministry of Justice and Her Majesty's Courts and Tribunal Service to target the areas where there are unacceptable delays in court proceedings. As part of the Government's aim to support early engagement between landlords and tenants, it will shortly publish findings from the Rental Mediation Pilot which they will use as another method of dispute resolution.
  • Introduce a Property Portal to ensure that landlords, tenants and local councils have the information they need. Landlords will be required to register their property on the portal and will face enforcement if they don't. 
  • Make it illegal for landlords or agents to have blanket bans on renting to families with children or those on benefits (the "No DSS bans").  This may be extended to other vulnerable groups that may struggle to access accommodation, such as prison leavers. The intention is that landlords should make informed decisions based on individual circumstances.
  • Work with industry experts to monitor the development of solutions to passport deposits so that the inability to find a second deposit before the first deposit is returned is not a barrier to moving.

Legislation is needed to bring these measures into force and they will form part of the Renters Reform Bill, which is expected to be introduced in this parliamentary session. When the draft Bill is published, details of the changes will become clearer. We will continue to monitor this emerging legislation and the wider legislative programme of residential leasehold and commonhold reform, so please look out for further updates. If you have any queries on this or any residential leasehold related issue, contact Dominic Morris or Rob Bridgman.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.