East Midlands landlords may be getting an unexpected boost as the Rental Reform Bill winds its way through the various parliamentary committees before ratification. These committees are made up of a variety of MP’s from across the House and their job is to identify weaknesses and injustice and resolve these with their recommendations.
Section 21 Issues
The Committee found that the vast majority of section 21 evictions were in respect of rent arrears and anti-social behaviour and not a case of no fault evictions of good tenants at all. The Committee pointed out that section 8 evictions simply do not work as post Covid the court system is broken. The reality is that a landlord will take a year or more to evict an undesirable tenant, which is why section 21 is used to evict bad tenants as it is much quicker. The Committee recommends that the Government creates a specialist housing court to handle bad tenant issues, and when this system is working effectively the Government can then abolish section 21.
The legislation plans to give tenants the opportunity to terminate a tenancy by giving two months notice, regardless of when they moved in, so, a tenant could effectively give notice as soon as they moved in which means the landlord gets no security of tenure, so the Committee recommended that a tenant cannot serve notice until they have been resident for a minimum of four months.
The Committee addresses no fault evictions by stating that a tenancy agreement should have a minimum term of 12 months and the notice period a landlord must give is a minimum of four months, to allow a tenant to find a new home and save for the expense of moving.
Student Accommodation
The Government plans to abolish fixed term tenancies and move to open ended agreements, thus giving security for tenants. This is a benefit in the buy-to-let market but is totally unworkable in the student market. Students rent for specific terms, normally 9 months or so, so would find it difficult to find somewhere to live if the previous set of students have not moved out, and you cannot force them due to the proposed changes.
Tax
The Committee stated that the Government has no idea what is happening in the private rental sector and what role the PRS has in the wider housing mix, all we know is that given the changes to how the sector is taxed the Government want smaller landlords out of the sector completely. The Government needs to be more transparent regarding their plans and if they are not then move the tax system to how it was.
The Government has two months to respond to the committee and may decide to ignore all the recommendations but if they do organisations like the NRLA will be a constant thorn in their side for years to come. The recommendations from the Committee are very logical and benefit the whole market, not just landlords so there is no reason why the Government should gives these serious consideration.
This provides an unexpected boost for East Midlands landlords and if the Government take on board these recommendations then this may stop the outflow of landlords from the PRS.
If you are an East Midlands landlord looking for a solution to any of these issues then contact us for a no obligation chat.
