New Government White Paper for Landlords explained by Greater London Properties
Recently the Government have published a new Bill discussing potential changes to the rental sector in order to tackle properties that are being rented in poor conditions and therefore protecting tenants... read on to hear the potential changes to the law.
The Bill also fulfils their manifesto commitment to replace Section 21 ‘no fault’ eviction notices with a modern tenancy system. There are no dates set for implementation and this will only apply to tenancies that you would currently create as an Assured Shorthold. Non-Housing Act Tenancies, such a company lets, rents over 100k, second homes, and resident landlords, will sit outside these big changes.
Our Greater London Properties team have collated the information into clear concise bullet points as per below, however you can also download the full Government Bill here.
New Tenancy Type – Periodic Tenancy
- Fixed terms will be abolished, and all tenancies will run on a periodic basis (we’re assuming this will be as agreed with the tenant i.e.. weekly, monthly).
- Tenants will be allowed to end the tenancy with 2 months’ notice at any time
- The landlord will be able to serve notice under breach of tenancy and the new grounds for selling or moving in a family member (more detail in the section on possession below)
- This will also include student lets, unless you are a Government approved provider. In terms of Central London, this will be a big issue, considering a student property is harder to let halfway through an academic year.
- There will be at least 6 months’ notice of the implementation of this new tenancy which will then become the default tenancy. After the first implementation date, there will be at least a further 12 months’ notice before ALL assured shorthold tenancies in existence will fall under this new tenancy. In previous discussions the Government did mention a 3-year transition, which seems to have been reduced to 12 months.
New Possession Grounds/The Courts
- There will be 3 new grounds added to a Section 8 notice. The first 2, being selling and a close family member moving in (no definition of what is deemed to be selling or a close family member yet). These 2 new grounds will require 2 months’ notice to the tenant and cannot be used in the first six months of occupation. The third new ground, which will be mandatory, will be repeated serious rent arrears ground, where a tenant has been in arrears of 2 months or more, at least 3 times in the previous 3 years.
- The current notice periods for rent arrears, being Grounds 8, 10 and 11, will be increased from the current 14 days to 28 days.
- There will be shorter notice periods (no set period confirmed) for the Ground 7A, where a tenant has been convicted on anti-social behaviour grounds.
- The Government promise a more robust and efficient court system, with certain possession cases being able to be flagged up as urgent. We’re assuming without the ability to serve a section 21 notice, then there may be less housing law related court hearings. However, it may simply just transfer from issuing a section 21 notice to a section 8, where an actual court hearing is required.
A Positive Rental Experience
- The legislation already exists, but the Government has reiterated, and will include in the legislation making it illegal to ban those applicants who claim benefits and those with children. In addition, they mention they will also look at other vulnerable groups such as prison leavers.
- In addition to hens, rabbits, service and therapy animals, the Government intends to legislate that landlords cannot refuse animals/pets without good reason. If they refuse, the tenant can appeal (not sure to whom at the moment). They will also amend the Tenant Fee Ban to allow for the payment of pet insurance.
- Confirmation about introducing a more flexible deposit passporting scheme.
Rent Reviews and Rent in Advance
- Rent increases clauses stated in tenancy agreements will be abolished.
- Rent increases will only be allowed once per annum.
- All rent increases must be via the Section 13 notice procedure and at least 2 months notice must be given by the landlord (up from the current one month). If the tenant disagrees, they can utilise the First Tier Tribunal to appeal. The FTT cannot set a rent any higher than the amount noted on the Section 13 notice by the landlord.
- The Government have indicated they will bring in powers to limit the use of large sums of rent in advance if such requests become widespread.
Decent Home Standards
- The Government has indicated that they will amend the Housing Health and Safety Rating System (HHSRS) to reflect more modern times. This has been mooted for numerous years prior to the white paper so is nothing new.
- A property portal will be available for both landlord and tenants to check the compliance of a property. We are assuming this will include GSR, EPC, EICR, and any licensing required as standard. It will also include the landlord details, but to what extent, in terms of private address or contact information, we don’t know.
Landlord Ombudsman
- This will apply to all landlords, whether or not, they are using an agent.
To clarify, nothing is yet law however, as always, we wanted to keep you fully up to speed with these potential changes so if/when they do become law we can ensure all our landlords are compliant and fully informed.
In the mean-time, if you have any questions please do not hesitate to call your Branch Manager, details below:
Megan Cutforth – 0207 734 4062
Ediz Giritli – 0207 113 1066
If you require an updated Property Valuation for Sale or Rent or would like to explore our Property Management options, please feel free to contact myself or Meg directly.
Warm Regards
Rob Hill, Director