Opinion & Analysis
Richard Walsh: 2020 – All change for private renters
08 Jan 2020
The Conservative manifesto promised a better deal for the many families in the private rented sector. It contained four key promises – abolish no fault evictions; a lifetime deposit which moves with the tenant; protection against revenge evictions and rogue landlords and strengthening rights of possession for good landlords. One of the barriers to purchase of IP in the private rental sector has been the inability to insure yourself against reasons other than sickness for being evicted from your home. These commitments are therefore extremely welcome and provide an added incentive to purchase IP.
The Queen’s speech for the next session of Parliament includes a new “Renters’ Reform Bill” The purpose of the Bill is to introduce a package of reforms to deliver a fairer and more effective rental market. We can therefore expect pretty rapid progress and the Building Resilient Households Group will be engaging with Government to get the best deal possible from an IP perspective.
The main elements of the Bill are:
- Abolishing the use of ‘no fault’ evictions by removing section 21 of the Housing Act 1988 and reforming the grounds for possession.
- Giving landlords more rights to gain possession of their property through the courts where there is a legitimate need for them to do so by reforming current legislation. In addition to this they will also work to improve the court process for landlords to make it quicker and easier for them to get their property back sooner. Another incentive for IP purchase.
- Introducing a new lifetime deposit so that tenants don’t need to save for a new deposit every time they move house.
- Developing and implementing measures to ensure wider access to and expand the scope of the database of rogue landlords and property agents. Giving greater powers to drive improvements in standards, and empowering tenants to make an informed choice about who they rent from.
It is important to note that the Bill only applies to England. It will be up to other devolved administrations to decide what to do in their areas.
The English Housing Survey 2017-18 found that the average length of residence in the private rented sector is 4.1 years. An earlier government consultation on longer tenancies showed that 79 per cent of tenants had only been offered tenancies of 12 months or less. Research by YouGov for Shelter showed that in the last five years, 1 in 5 families renting privately have moved at least three times. Under the current system, following the end of a fixed term, many tenants move to a periodic tenancy where they could be asked to leave with only two months’ notice, with no reason given.
According to the English Housing Survey, around three quarters of private renters paid a deposit at the start of their current tenancy. The Tenant Fees Act, which came into force in June 2019, capped deposits to 5 weeks’ rent.
Legal and General and LV= introduced new products last year specifically geared to the private rental sector. In 2020 I hope consumer choice will increase and we will see much greater uptake of IP in this sector.
There are some technical issues with IP and UC interactions which the BRHG will be working on but in practice, given the growing gap between rent paid and UC housing allowances, the only way private tenants can be sure all their rent will be paid is through IP. Although the Government have promised to end the benefits freeze so far there has been no similar commitment on Local Housing Allowance Rates.