15th
Jan 2025
The agency part of a property services group has formally expressed its opposition to certain aspects of the Renters Rights Bill in a letter to the government.
Yesterday (Tues 14th Jan) the Bill received its Third Reading in the Commons, meaning it now goes to the House of Lords. It is expected to become law in the spring.
The group in collaboration with other industry organizations, has raised major concerns specifically about some government-backed amendments to the Bill.
Below is the letter addressed to Matthew Pennycook MP.
Dear Minister,
We write following publication of the Government’s New Clause 13 and 14 to the Renters’ Rights Bill.
Combined, we are seriously concerned they will severely restrict access to the private rented sector for those on the financial margins. Given this, we would welcome your responses to the following:
- Government New Clause 13 will prohibit the payment of multiple months of rent upfront. Whilst we understand the desire to reduce cost pressures faced by tenants, how are those likely to struggle to pass affordability checks supposed to prove their ability to cover their rents, and sustain a tenancy?
- Additionally, New Clause 14 further undermines landlords’ ability to limit risk by preventing them from requesting the first month’s rent prior to entering into the tenancy agreement. Are landlords to be expected to take it on faith that an applicant with a poor payment history will meet their obligations?
- How will guarantors for tenants operate given the end of fixed term tenancy agreements? It’s unlikely many people would be prepared to guarantee rents for an indefinite period.
- What impact will the decision to freeze housing benefit rates from April have on the ability of claimants to access the sector, especially given the Bill’s objective to tackle discrimination faced by benefit claimants?
- To what extent has the Government considered the impact on tenants in receipt of benefits, or with lower or less stable incomes, of changes in how landlords assess risk? The Bill increases the amount of rent arrears a tenant can build before landlords can seek to repossess a property. Likewise, landlords will be unable to regain possession on a property if rent arrears are caused by a delayed Universal Credit payment. This is despite private landlords, unlike those in the social rented sector, not having a right to know if a tenant is claiming Universal Credit or not.
- Given the above, what support will the Government provide to those households unable to access homes in the private rented sector, due to the impact of reform on landlords’ perception of risk? Those who will be most affected are those unable to easily prove their ability to sustain tenancies.
In addition, we welcome your commitment that implementation of the Bill will not be fixed two months after Royal Assent, and appreciate the constructive discussions held so far with the Department about what will be needed to ensure the sector is ready of the changes.
However, in light of these, and given the sheer extent of the changes in the Bill, when doe the Government expect to publish a roadmap outlining how, and when, it plans to implement the various elements of the Bill?
Tenants and responsible landlords deserve smooth implementation, without any cliff edges.
The Government must be clear about exactly how this will be achieved. In respect of the justice system, we remain severely concerned at the lack of a detailed plan, with clear objectives, to improve it for both tenants and landlords. On 11th September 2024, you told LBC Radio that the Government was working to ensure the courts were ‘ready’ for the system replacing Section 21. Given this, how does the Government define what ‘ready’means and looks like in practice?
In addition, how will the Government prevent the Property Tribunal being overwhelmed with rent appeal cases?
We understand the ambition to make it easier for tenants to challenge above market rent increases. However, at present there is no consistent recommended mechanism for tenants to first establish if a proposed rent increase is above market rates or not, meaning only the Property Tribunal will be able to make that decision.
To prevent the Tribunal being overwhelmed, we believe tenants should first be able to establish from the Valuation Office Agency (VOA) if a proposed rent increase is within market rates or not. This would make use of the VOA’s expertise on local market rents and reduce waiting times for cases that do need to be decided by the Tribunal.
According to Freedom of Information requests by the NRLA, in Scotland, it takes Rent Services Scotland – which has similar rental market duties to the VOA in England – just five days to respond to a rent determination. In contrast, it took the Property Tribunal an average of 18 weeks to determine a Section 13 case in England last year.
We would welcome an opportunity to discuss these issues with you as a group and look forward to hearing from you. Perhaps your office could email policy@nrla.org.uk to establish when might be suitable for such a meeting. We look forward to your reply.
Yours sincerely
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