Game-changer or disaster? Rental sector reacts to the first reading of delayed Renters Reform Bill

 (Daniel Lynch)
(Daniel Lynch)

Sweeping reforms to the private rental sector have been published today as the long-awaited Renters Reform Bill had its first reading – though it could take months to pass through parliament.

The Bill makes good on the Conservative 2019 manifesto pledge to ban no-fault evictions. It also protects benefit claimants, families with children and pets from blanket bans, doubles notice periods for rent increases and requires private rental housing to meet the Decent Homes Standard.

But campaigners are concerned that it contains possible loopholes for landlords, including a bolstered Section 8, which addresses evictions where a tenant is deemed in breach of contract.

Speaking on Radio 2 this afternoon, Michael Gove said: “It’s also the case that we’ve taken steps that if tenants are anti-social, that landlords can evict them more quickly, and also if tenants are persistently and deliberately evading their responsiblity to pay their rent, then they can also be evicted more quickly.”

Radical reform – or a missed opportunity?

Housing charity Shelter warned that the wording of the Bill must not be watered down as it makes its way through parliament. A first reading is a formality – just the title is read out – but debates and a later line-by-line assessment could alter the contents.

The Bill will then follow the same process in the House of Lords.

Shelter said: “If the government gets this bill right it will be a gamechanger. But it’s vital that the bill is as strong as possible. It must deliver genuine security for renters as it goes through Parliament, and not create loopholes.

“It’s pivotal that MPs keep the millions of private renters – who have been waiting years for these changes – front of mind as this bill makes its way through Parliament.”

It has been more than four years since the first consultations into the proposed changes started.

Data from The Department of Levelling Up, Housing and Community shows that more than 48,000 households in England were assessed by local councils as a homelessness risk due to section 21 evictions between July 2019 and June 2022.

Overall nearly 230,000 private renters have received a no-fault eviction notice in those three years, according to research called out by Shelter and Yougov.

On Twitter Green Party MP Caroline Lucas described the Bill as a “missed opportunity” with a “loophole to help landlords avoid [the ban on no-fault evictions], no proper rent controls, nothing to tackle cold & damp in homes”. Renters deserve justice, she said – and “this doesn’t cut it”.

Labour MP Rebecca Long-Bailey welcomed the abolishment of Section 21, but called for four-month notice periods, in-tenancy rent increase caps and protection from eviction in the first two years of a tenancy.

Will landlords sell up en masse?

Landlord groups have warned that the Bill, which follows a year in which many have seen their mortgage rate rise, would make landlordship a less attractive proposition.

They suggest a significant number of the UK’s roughly two million landlords could throw in the towel and sell up if the Bill comes to pass in its current form – and the shortage of supply could push rents up further.

A survey commissioned by the National Residential Landlords Association (NRLA) claims that in Q1 2023, 33 per cent of private landlords in England and Wales said they planned to cut the number of properties they rent out – up from 20 per cent in the same period the year before.

Sue Colson, the CEO of council-backed housing procurement scheme Capital Letters said that “we may see an unintended consequence of good quality, responsible landlords leaving the sector due to a perceived lack of power and an increased risk”.

But Dan Wilson Craw, acting director of campaign group Generation Rent, pointed out that “overall supply won’t be affected”.

He said: “Landlords have always sold properties for a range of reasons and there is little evidence to suggest they are doing so in greater numbers than normal. The Bill will still allow landlords who have legitimate reasons to evict tenants to do so, so most landlords will not be affected by the reforms.

“Even if we see a lot of landlords who currently abuse Section 21 evictions to bully tenants start to leave the market, it’s not like their properties will disappear. The homes will still be lived in.

“The reason for the record unaffordability of rented homes that we’re seeing at the moment in London is a chronic lack of housing across all sectors. We need to build enough homes to meet demand to address this”.

What does it mean for Londoners?

Jon Tabbush, Senior Researcher at think tank Centre for London, said the Bill is “good news” for London’s more than one million private renters, but warned “the power for landlords to evict tenants at short notice due to anti-social behaviour must be strictly defined and enforced carefully.”

The London Renters Union, who have campaigned to end no-fault evictions for five years, say this is “the bare minimum” and called for stronger action to prevent rent hikes.

Londoners may have hoped to see stronger protections in the Bill, on the back of a report by Hamptons earlier this week that found London rents hit a record £2,210 per month in April.

Michael Gove ruled out the introduction of rent caps in an interview with the i newspaper today, saying that while a legislative means of fixing rents would give temporary relief, “in the medium- to long-term it would be bad for the many people who will need homes in the future” due to a diminished supply of new rental properties.

There is also concern about how councils could cope with being handed extra responsibility for enforcement.

Last November, cross-party group London Councils warned that the city’s local authorities could face a 700m funding gap this year.

The government will have 18 months to bring the Bill into law before the next election. Its passage through parliament may not be smooth sailing – recent delays came amidst reports that Tory MPs are unhappy with what they perceive as anti-landlord legislation.