A Fairer Private Rented Sector - Winners and Losers

A Fairer Private Rented Sector

The Government released their new White Paper 'A fairer private rented sector' promising a fairer deal for everyone on 16th June, resulting in much weeping and wailing and gnashing of teeth from landlord associations, concerns that it just wasn’t enough but was a step forwards from tenant associations - and a great deal of bewilderment from the average UK landlord who just has one or two properties in their portfolio as a retirement buffer.

Do they need to offload their properties? Are they being penalised for being homeowners? Are the tenants being given blanket permission to run riot? What in the name of Michael Gove’s haircut does this actually mean?

Section 21 Evictions Have Gone the Way Of the Dodo

Up until now, section 21 evictions have meant unscrupulous landlords weaponised evictions against tenants with genuine complaints and concerns. The new legislation removes that option.

Landlords can no longer evict without fault, but they can evict under certain circumstances. Those circumstances have yet to be announced but will be stipulated under law.

The Good: Tenants will need to give two months of notice before leaving, giving you time to get new people in and not leaving you high and dry.

The Bad: If you’re in a hurry to repossess the property, two months can be a very long time.

Rent Can Only Increase Once a Year

Under the new rules, landlords can only put through an annual increase in rent for all tenants, not just those on a periodic tenancy.

The Good: Both tenants and landlords should know exactly what the rent is for the next year.

The Bad: Unexpected property expenses can impact the landlords’ bottom line, leaving them to eat the expense.

Central Ombudsman

Tenants will be able to take landlords to a single centralised ombudsman. Landlords will be required to join and pay for the scheme, so make sure you add this to your costings when renting out.

The Good: Having evictions drag through the courts for months (in some extreme cases years) is detrimental to your bottom line, so having this fixed will come as a relief to beleaguered landlords.

The Bad: No set plans as yet on how this will be done, or on what sort of timeline it will happen.

Property Portal

There will be a property portal that tenants can check, with details of both rogue landlords and those that are compliant.

Think of it like TripAdvisor for renters, with local authorities and other landlords also able to use it.

The Good: Landlords will be able to check and access local support from other landlords and the local authorities.

The Bad: No word on how any appeals against rogue status will be applied, and the obvious concern that this could be weaponised.

Minimum Standards Will Be Mandatory

Landlords will no longer be able to rent the equivalent of a mouldy broom cupboard out as a place for people to stay, If your property doesn’t hit minimum standards, you won’t be able to let it out.

The Good: Keeping your buildings up to minimum standards means less repair work and financial outlay down the line, while properties in excellent condition tend to bring in higher rent.

The Bad: If you don’t have the finances to fix up your properties before letting them, this is going to leave you between a rock and a hard place.

High value property security CCTV

More Power to the Man

Local authorities will have investigative and enforcement powers increased. Civil penalties of up to £30,000 will be introduced, and the plan is to lower the threshold of civil penalty entry to cover all civil penalties.

The Good: Landlords can request help from the local authorities with regards to problem tenants.

The Bad: £30,000 is a lot of money if it turns out you’re in breach.

Refusing Tenants Just Got Harder

Agents and landlords will be prevented from refusing tenants on benefits and tenants with children. This isn’t going to be a guideline; it will now be illegal to discriminate against potential tenants like this.

The Good: Landlords will be able to get rent paid directly from the tenants benefits if necessary.

The Bad: Discriminating against these tenants will be a costly exercise.

Puppy Love

Tenants will now have the right to live with pets, with the Tenant Fees Act 2019 being amended so that landlords can require pet insurance under the permitted fees section to cover any property damage.

The Good: The requirement for pet insurance will cover your house.

The Bad: If you struggle with severe pet allergy and plan on living in the property in a few years, you’re going to have to deep clean. This sort of thing might fall under a medical exception, and it’s worth checking out.

Passporting Deposits

Right now, the intent is to monitor the existing marketing for lending and insurance products that help tenants move without struggling with a deposit. There is a chance for further legislation down the line, but right now the current situation stays as is.

The Good: Right now, there is no additional costs to landlords.

The Bad: Some tenants may still not be able to move into your property because they struggle to get their deposit back on time.

And finally - don't forget your landlord insurance

Don’t forget to check your landlord insurance policy to make sure your rented properties are properly covered and for the correct sums insured.

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