Reforming the Private Rented Sector

Wednesday 17th May 2023 Written Statements

[The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)]

The Renters (Reform) Bill, introduced into Parliament today, will deliver the Government’s 2019 manifesto commitment to “bring in a Better Deal for Renters”, including abolishing “no fault” (section 21) evictions and reforming landlord possession grounds. Alongside these reforms, we are reforming court processes to make this process faster and more efficient, so landlords have strengthened rights and means of possession. As we promised in the 2019 commitment our Bill “will create a fairer rental market: if you’re a tenant, you will be protected from revenge evictions and rogue landlords, and if you are one of the many good landlords, we will strengthen your rights of possession.”

The Bill builds on the strong progress this Government have made over the last decade to increase protections for tenants, such as giving councils stronger powers to drive out criminal landlords by introducing banning orders through the Housing and Planning Act 2016; action to stop retaliatory evictions (in relation to housing conditions) through the Deregulation Act 2015; and shielding tenants from excessive deposits and fees with the Tenant Fees Act 2019.

A healthy private rented sector is a vital part of our housing market—providing much-needed flexibility and in many cases serving as a stepping stone towards home ownership. The overall number of privately rented properties has doubled since 2004— peaking in 2016 and remaining roughly stable since. Some renters face a precarious lack of security as a result of section 21 “no fault” evictions. Short notice moves worsen children’s educational outcomes, make it challenging to hold down stable employment, and prevent families from putting down roots and investing in their local area.

The Government remain fully committed to improving the court system for landlords and tenants. Following the recommendation of the Levelling Up, Housing and Communities Select Committee, we will align the abolition of section 21 and new possession grounds with court improvements. This includes end-to-end digitisation of the process and our work with the courts to explore the prioritisation of certain cases, including antisocial behaviour.

It is wrong, too, that nearly a quarter of private rented homes do not meet basic decency standards. The tragic death of two-year-old Awaab Ishak shone a light on the unacceptable state of this damp, cold and dangerous housing—but these problems are not limited to the social rented sector. The Government intend to tackle these issues in the private rented sector by legislating to apply a decent homes standard. These dilapidated and dangerous homes are costing the NHS an estimated £340 million per annum and are holding back local areas, making them less attractive places to live and work.

The current system of regulation for the private rented sector is also failing responsible landlords. They face challenges when evicting tenants who wilfully do not pay rent or exhibit antisocial behaviour. They also suffer by being undercut by a minority of criminal landlords. We should celebrate the overwhelming majority of landlords who do a good job and give them peace of mind that they can repossess their property when a tenant is behaving badly, or their circumstances change. We have and will continue to work closely with representative organisations such as the National Residential Landlords Association, as well as groups such as Shelter, and local government when developing measures in this Bill.

Measures on the face of the Renters (Reform) Bill

The Renters (Reform) Bill will address these failures for both the 11 million private renters and 2.3 million landlords in England. Our reforms have been developed in consultation with landlord and tenant groups over the past five years. As set out in the “A Fairer Private Rented Sector” White Paper, we will:

Abolish section 21 “no fault” evictions and move to a simpler tenancy structure where all assured tenancies are periodic—providing more security for tenants and empowering them to challenge poor practice and unfair rent increases without fear of eviction;

Introduce more comprehensive possession grounds so landlords can still recover their property (including where they wish to sell their property or move in close family) and to make it easier to repossess properties where tenants are at fault, for example in cases of antisocial behaviour and repeat rent arrears;

Provide stronger protections against backdoor eviction by ensuring tenants are able to appeal excessively above-market rents which are purely designed to force them out. As now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed. To avoid fettering the freedom of the judiciary to make full and fair decisions, the tribunal will continue to be able to determine the actual market rent of a property;

Introduce a new privately rented sector ombudsman for private landlords which will provide fair, impartial, and binding resolution to many issues and. prove quicker, cheaper, and less adversarial than the court system;

Create a private rented property portal to help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement. It will also support local councils—helping them target enforcement activity where it is needed most; and

Give tenants the right to request a pet in the property, which the landlord must consider and cannot unreasonably refuse. To support this, landlords will be able to require pet insurance to cover any damage to their property.

Further measures we will legislate for in this Parliament

Working closely with landlord, tenant and local government groups we will deliver further measures set out in the 2022 White Paper. We will bring forward legislation at the earliest opportunity to:

Apply the decent homes standard to the private rented sector to give renters safer, better value homes and remove the blight of poor-quality homes in local communities. This will help deliver the Government’s levelling up mission to halve the number of non-decent rented homes by 2030. We will update this decent homes standard in consultation with stakeholders over the coming months to ensure it is fit for purpose and proportionate;

Make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children—ensuring no family is unjustly discriminated against when looking for a place to live; and

Strengthen local councils’ enforcement powers and introduce a new requirement for councils to report on enforcement activity—to help target criminal landlords.

I look forward to the further discussions which will take place as we debate and scrutinise the Renters (Reform) Bill.

[HCWS778]