The Bill is looking to abolish fixed-term tenancies, including assured and assured shorthold tenancies and replace them with periodic tenancies with a monthly rental period.
Balancing the needs of tenants and landlords
Propertymark has long argued that a fixed term allows security of tenure for the tenant and a guarantee of rent payments for the landlord.
For tenants with low income or poor credit history, the fixed term allows a guarantor to be confident about the length of time they are signing up to support them. This is an area that the Minister highlighted he wanted to investigate.
Furthermore, the student rental market relies on fixed-term agreements to facilitate the availability of properties in line with the academic year.
The UK Government must tackle redress and keep fixed-term contracts
Representing members, Timothy Douglas, Propertymark’s Head of Policy and Campaigns, presented evidence at the first sitting of the Public Bill Committee on the Renters (Reform) Bill citing member data that demand for rental property was up 32% in August 2023 and underlining the importance of the PRS to the UK housing market, which is struggling due to the lack of affordable housing.
More mandatory grounds are essential
The removal of Section 21 is the cause for the greatest concern amongst landlords because there is a lack of confidence that the remaining grounds provide them with adequate protection.
We also highlighted to the Minister the need for more mandatory grounds including breach of tenancy, deterioration of property and acquiring a tenancy by using a false statement.
Between January 2022 and January 2023, a 120% increase in tenancy fraud was reported by Homeppl, with an overwhelming majority of cases involving fake documents. However, with serious grounds such as these remaining discretionary, landlords risk lengthy and costly court procedures with no guarantee of regaining access to their property.
Make redress consistent before expanding membership
Propertymark also reiterated that only fully self-managing landlords should join a redress scheme, not landlords who do not manage their property full-time. Self-managing agents should be required to join one of the two existing approved schemes rather than a new one being created.
However, alignment of the existing redress schemes is needed. The Property Ombudsman and the Property Redress Scheme currently do not operate to the same criteria or adjudicate against members in the same way, which leads to inconsistencies in agent complaint procedures and a lack of clarity for consumers.
Customers do not know what they should expect and are unaware that they must complain to the agent before the redress schemes can act, and this will be the same for landlords once they are also required to register.
We had a very positive meeting with the Housing Minister who is absolutely engaging on all aspects of this important piece of legislation. We know from member agents the importance of retaining fixed-term tenancies as well as ensuring the reformed grounds for possession are robust and fit for purpose.
The road map for regulation and the landscape for how landlord redress will work in practice are also key concerns that we raised with the Minister on behalf of members. We look forward to continuing to work with the UK Government to ensure the Renters (Reform) Bill delivers its aims, reduce unintended consequences, and it works for everyone.
