The Future of the Private Rented Sector

As many will be aware, there has been a significant increase in interest rates in the last month alone, and some mortgage lenders have even withdrawn deals for new buyers. These two factors mean things do not look great for those individuals stuck in the private rented sector who likely won’t be going anywhere soon. The increase in the construction of “affordable housing” that the government has been pushing can only do so much. Plus, the price of even a new build starter home is well beyond the reach of many they were intended to help. 

It is currently estimated that over 33% of homes have at least one individual over 45 in the private rented sector. It is predicted that this number will be closer to 50% by 2035. This indicates that an increasing number of households with older individuals will be living in privately rented accommodations for many years to come. 

The Governments White Paper

“A Fairer Private Rented Section” is the name of a recently published government white paper. In the report, the government has set out a range of proposals that refer to the reform of the private rental sector under the “Renters Reform Bill.” Anyone having issues with a rented property, either as a tenant or a landlord, is recommended to seek advice from a specialist solicitor like O’Donnell Solicitors. 

There is a 12-point action plan set out in the paper, aiming to deliver “a fairer, more secure, higher quality private rented sector”. A part of this plan looks at the government’s intention to abolish section 21 evictions. Section 21 evictions are the part of the law that currently allows any private landlord to repossess property from an assured shorthold tenant whilst not having any requirement to establish a fault on the part of the tenant. This is often referred to as a “no-fault” eviction. It is this requirement that there be no need to show a fault, together with the reasonably short notice period that a landlord can give that has been critiqued. It has been seen to offer very little security to private rented tenants. This is a situation that can have a knock-on effect on the mental health of an individual as well as their general well-being. Plus, it can also prevent them from planning effectively for the future.

What does it mean to tenants and landlords?

This new “Renters Reform Bill” offers tenants more security as their landlords would be required to provide valid grounds for possession. At the same time, these grounds for possession are to be reformed. These reforms will allow landlords to gain possession of a property should the need arise. The current grounds for possession based on anti-social behaviour and rent arrears have been amended to strengthen landlords’ rights. At the same time, new grounds will be put in place that would allow a landlord to move a close family member into a property or sell it.

What happens next?

The reforms, which were set out in a white paper in June 2022, will need legislation to pass them. The bill is hoped to be passed during the 2022-23 parliamentary session. At the same time as all of these changes will be taking place, the government’s response to the consultation on the “case for a housing course” will get a response. This will outline the plans that could improve the speed and efficiency of possession cases through the courts. 

The white paper is being hailed as a “game-changer” for anyone in private rental. However, those who represent landlords have been vocal in their concerns that these new reforms favour the tenant too much. They have also raised concerns that the already struggling court system will be overloaded if every eviction should need a court hearing. The new process could take a landlord several months to complete, whilst lost rental revenue adds up.