After multiple delays, the Renters Reform Bill was finally published on May 17, 2023. This bill introduces significant changes to the landlord-tenant relationship in England. In addition to discussing key measures outlined in the bill, this blog will also delve into insights about the current housing market and the challenges faced by tenants and homeowners.
Key Measures of the Renters Reform Bill:
- No-fault evictions: The bill abolishes Section 21 evictions, granting renters the power to challenge landlords without the fear of losing their homes. Landlords can reclaim their property for legitimate reasons, such as selling the property or housing close family members.
- ‘No pet’ policies: Tenants will now have the right to request keeping pets in their homes, and landlords must provide a valid reason if they refuse. Additionally, landlords can require pet insurance to cover any potential property damages.
- Protections against ‘back door’ evictions: While landlords can increase rents to market value, tenants can appeal against excessively high rents designed to force them out.
- Ombudsman and property portal: The introduction of a Private Rented Sector Ombudsman aims to provide fair resolutions to issues, offering a quicker and less adversarial alternative to the court system. Furthermore, a Private Rented Property Portal will offer guidance on legal obligations and rights for both landlords and tenants.
Insights on Housing Market Challenges:
- Missed rent and mortgage payments: The Which? Consumer Insight Tracker reveals that in April 2023, 5.2% of renters and 3.1% of mortgage holders missed their payments. Rising mortgage rates and landlords passing on increased costs contribute to this issue.
- Deposit-free mortgages: While deposit-free mortgages are marketed as a means to help renters and first-time buyers onto the property ladder, caution should be exercised. Predictions of falling house prices and the potential for negative equity raise concerns about affordability, especially considering the current economic climate.
- Demand and limited availability: Propertymark’s Housing Insight Report highlights the staggering ratio of tenants to available homes, with an average of 106 prospective tenants registered per branch and only 10 properties available for rent. Rising demand has also been observed in the property sales market.
The Renters Reform Bill introduces crucial changes to the landlord-tenant relationship in England, offering renters more rights and protections. However, challenges persist in the housing market, including missed payments and a significant imbalance between tenant demand and property availability. It’s essential to navigate these complexities while considering the broader economic outlook and historical lessons to ensure sustainable housing solutions for all.