The Renters Reform Bill, post its second reading on 23rd October in the House of Commons, has brought forth significant amendments proposed by the government. The progress of the bill can be tracked here.
During the second reading, it became evident that MPs and the government are cognizant of the challenges that the proposed legislation may pose to the student accommodation sector. Clive Betts, MP for Sheffield South East, voiced concerns by saying, “Last year, Manchester students were actually being encouraged to live in Liverpool, due to a housing shortfall in Manchester. This is but a glimpse into the broader issue of protecting the student market, encompassing non-purpose-built accommodation.” This spurred a response from Michael Gove, stating, “…As the parent of a daughter currently studying at Manchester University, I fully grasp the hon. Gentleman’s point. We are committed to addressing this.”
The legislation’s intent to dissolve fixed term tenancies and no-fault evictions poses distinct challenges within the student accommodation sector:
- No-Fault Evictions: The inability for landlords or agents to ascertain the end of a tenancy in sync with the academic cycle hampers the property advertisement from a specified date.
- No Fixed Term Tenancies: With tenants having the leeway to provide 2 months’ notice to terminate their tenancy, landlords face the risk of properties going vacant midway through an academic year. This could lead to larger voids during the summer months, causing a ripple of chaos in the student lettings market with only a 2-month notice for re-letting once the tenants vacate.
Mr Gove has proposed a remedy to the first issue by introducing a new ground for eviction tailored for student accommodation, supplementing the one for PBSA already on the table. While this move is lauded by the sector, it doesn’t address the second issue. As the bill advances to the Committee Stage for a meticulous line-by-line review, there’s room for further deliberation and amendment.
MPs have endorsed a carry-over motion to ensure the continuation of the Renters (Reform) Bill proceedings into the next Session of Parliament if not concluded in the current session.
A Snapshot of the Proposed Bill:
- Abolishing Section 21 ‘No Fault’ Evictions and Fixed Term Tenancies: Transitioning all assured tenancies to periodic tenancies for enhanced tenant security, and setting defined reasonable circumstances for evictions.
- Reforming Possession Grounds and Notice Periods: Fortifying landlords’ possession rights and reshaping possession grounds to facilitate property recovery when warranted.
- Fixing the Process for Rent Increases and Appeals Against Above-Market Rents: Standardizing the rent increase process to once a year, with a structured appeal system against above-market rents.
- Introducing a New Ombudsman: Creating an Ombudsman to offer fair and binding resolution to tenant issues, encompassing various remedial actions.
- Introducing a New Property Portal: Launching a Property Portal for a comprehensive database of residential landlords and privately rented properties in England, to aid compliance and inform tenants.
- Allowing Tenants to Request a Pet: Empowering tenants to request pet ownership in their property, with reasonable considerations for landlord consent.
- Reforming the Court Process: Digitizing more of the eviction process to minimize delays and ensure a seamless transition into the new tenancy system.
- Extending the Decent Homes Standard to the private rented sector, prohibiting blanket bans on renting to certain tenant demographics, and amplifying councils’ enforcement powers with a new requirement for councils to report on enforcement activity.
Book a call with one of our team to discuss how the Renters Reform Bill affects your property investments.