The Centre for Social Justice (CSJ), a policy study group, has expressed strong support for the Renters (Reform) Bill, which is slated for debate in the Commons. Rishi Sunak and Levelling-Up Secretary Michael Gove are the key figures advocating for this significant piece of legislation.
This Bill primarily aims to terminate assured shorthold tenancies and, with them, Section 21 evictions, which currently allow landlords to evict tenants without a stated cause. However, it doesn’t just stop there. The CSJ underscores that the Bill is designed to recalibrate the equilibrium, ensuring that both tenant and landlord rights are more evenly balanced.
Empowering Responsible Landlords
The report, entitled “Raising the Roof,” highlights the government’s correct stance in concurrently revamping Section 8 of the Housing Act 1988. This action is poised to bolster the rights of conscientious landlords.
In particular, it recommends more robust criteria for landlords to regain possession of their properties, particularly when they intend to sell or need the properties for family members. The overhaul also stipulates that serious recurring issues like significant rent arrears, property damage, or anti-social behaviour by tenants constitute clear reasons for landlords to repossess their properties.
CSJ’s CEO, Andy Cook, has refuted the exaggerated narratives of a landlord exodus, pointing to Scotland’s 2017 experience when it terminated no-fault evictions without witnessing any significant departure of landlords.
“The independent assessment of this Bill indicates that landlords will face negligible average net costs, merely £10 per tenancy. The legislative change aims to shield approximately 11 million individuals from the threat of unwarranted eviction, thereby fostering a sense of security and reducing instances of homelessness,” Cook explained.
Growth and Changes in the Rental Sector
According to the CSJ, multiple elements suggest that both renters and landlords will benefit from the new Bill. Even with increased taxation on landlords, the private rented sector has expanded by over 2% in the past four years, encompassing close to 5 million properties.
Although the number of landlords has diminished, primarily affecting smaller buy-to-let owners, this hasn’t translated into fewer available properties. Larger landlords have filled the gap, leading to a consolidated sector. Data indicates that while 78% of landlords owned a single property in 2010, this figure has decreased to 43%.
The report emphasizes that the proposed abolition of Section 21 is counterbalanced by modifications granting landlords enhanced rights to repossess their properties in cases where tenants are at fault, or the landlords need to sell.
The Urgency for Specialist Housing Courts
A key proposal from the CSJ is the establishment of specialized housing courts. These courts, staffed by judges proficient in housing issues, would handle all housing cases, ensuring a more efficient and quicker resolution than what the current system allows. The report cautions about severe court backlogs today, where landlords may wait up to a year to reclaim properties using Section 8 procedures due to existing system constraints.
Moreover, the CSJ advocates for the immediate implementation of these specialist housing courts. Without them, the anticipated surge in disputes between landlords and tenants following the new reforms could cause significant delays in an already overburdened civil court system.
Mandatory Ombudsman and Property Portal
Another major stride is the introduction of a compulsory Ombudsman for private landlords, a system that will delve into complaints and ensure that persistent administrative shortcomings are identified and rectified. This measure is part of a broader initiative to professionalize the rental sector, providing high-quality options for both private and social housing tenants.
The report also supports the government’s proposed mandatory Property Portal, which would empower local authorities and tenants to confirm the credibility and quality of landlords or properties they intend to rent, thus avoiding deceitful and unscrupulous ones.
A Growing Need for Stable, Quality Rentals
The CSJ’s analysis reveals a significant shift over the past two decades, with a substantial increase in young, low-income households opting for private rentals. The study underscores the urgent need for the private rented sector (PRS) to provide the stability necessary for tenants to establish communities and settle in specific areas.
Currently, over 1.2 million households are on social housing waiting lists, while the percentage of young, low-income households residing in social housing rentals has almost halved since the early 2000s.
Former Housing Minister Eddie Hughes MP has lauded the report and expressed his support for the Bill, noting, “This Bill embodies the most extensive and comprehensive reforms in the sector in a generation. Initiatives such as terminating Section 21 ‘no-fault’ evictions, ending fixed-term tenancies, and establishing an Ombudsman for all private renters will forge a new pact for renters, grounded in fairness, security, and accountability.”
CSJ housing expert Sam Bruce added, “The increased presence of young, low-income households in the Private Rented Sector compared to twenty years ago necessitates confidence in challenging absentee landlords and seeking redress. The majority of landlords are reliable, and reforms to Section 8, the new Property Portal, and an Ombudsman should reassure them and promote excellence in the sector.”
Bruce warned, however, that ineffective enforcement could undermine attempts to establish a more equitable rental market. Both landlords and renters need assurance that they won’t be caught in legal purgatory in the event of disputes or issues. “We must guarantee that local authorities have the capacity for proper enforcement, and that the courts are equipped to handle an uptick in cases. Instituting a dedicated housing court system will provide that security,” he concluded.