Rayner recognised the important role of landlords and acknowledged that most are responsible and reasonable and provide decent homes for their tenants. She stated that although the Bill builds on the previous government’s work, it is fundamentally different, and goes further to deliver renters' rights, social justice, and fairness for all.
Evidence on rent caps heeded
When asked if the UK Government would consider implementing rent caps, the Secretary of State dismissed the idea, stating that rent controls restrict the housing supply, which doesn’t help anyone.
Propertymark is pleased to see this firm stance, having campaigned on this issue in England and the devolved nations.
No place for fixed terms
Housing Minister, Matthew Pennycook, MP, was clear that the UK Government does not accept that fixed term tenancies offer benefits to landlords and tenants, stating that the move to periodic tenancies will prevent tenants being trapped in substandard properties and allow them to adapt to changes in circumstances, such as a new job, more easily. However, he did acknowledge the need for further discussion around strudent tenancies as the Bill progresses.
Propertymark and other stakeholders have challenged the proposal to switch to periodic tenancies, and called on the Minister to undertake an impact assessment. A fixed term gives the tenant security of tenure whilst guaranteeing rent payments for the landlord, and are a fudamental tool in the student housing sector. Fixed term agreements are also frequently requested by tenants such as nurses working in hospitals for set periods and families who want to stay in an area because their children are at a local school.
The complete removal of an initial fixed term will result in every tenancy effectively becoming a short-term let which, with limited supply, will drive up rents for individuals, couples and families looking for a long-term home. In support of renters, Propertymark wants to see fixed-term tenancies retained as an option.
Court capabilities in doubt
Rayner asserted that the possession process in County Courts will be digitised to create a modern and efficient service, although no timeline has been given for this work to be completed. She also emphasised that through the new compulsory Ombudsman service, she expects most disputes to be resolved at an early stage, avoiding the courts altogether.
Propertymark’s research paper, Reforming the PRS: Letting Agent Views of the Renters’ Rights Bill, demonstrates that 88% of letting agents do not think the courts will have the resources they need after Section 21 is removed. In our briefing to MPs before the Second Reading, we drew attention to the fact that the wait time for a warrant to be issued in a PRS possession claim is around 29 weeks on average and can sometimes be as high as 40 weeks in London. This is unacceptable, and the situation could worsen unless changes are implemented.
We are urging the UK Government to expand online platforms for filing evidence, ensure that more hearings are conducted remotely, and increase the number of judges and bailiffs to reduce delays in issuing and enforcing warrants. We also believe automatic rights to a High Court Enforcement Officer should be given to landlords
Homes lost to short-term lets
Shadow Housing Secretary, Kemi Badenoch, MP, and others highlighted the issue of landlords exiting the private rented sector due to concern and uncertainty over new regulations, with many properties moving to the short-term lettings sector, which offers higher rents and, currently, no regulation.
Propertymark also drew attention to this in our briefing paper, adding that with no security of a fixed rental term for a landlord beyond the two months’ notice period and no long-term rent guarantee, many would find the holiday let market attractive.
The UK Government must enact the registration of short-term rental property requirements from the Levelling-up and Regeneration Act 2023 alongside PRS reforms to level the playing field for landlords and the long-term rental market.
Balancing power between stakeholders
Emphasising that good landlords have nothing to fear, Rayner explained that the PRS database will give property owners access to support which will help them understand, meet, and demonstrate compliance with the new decent homes standard and other regulations, such as Awaab’s Law.
Local Authorities will be able to use the register to target enforcement and will also be given increased ring-fenced funding to ensure they have the resources to carry this out. Greater powers will be given to councils to root out unscrupulous landlords, and maximum civil penalties will be increased to £40,000, creating a stronger deterrent.
The UK Government says tenants also have an important role in holding landlords to account and wants to incentivise them to take direct action against rogue landlords by extending rent repayment orders and ensure that offenders pay the maximum penalties more often.
What will happen next?
A Public Bill Committee of MPs will now scrutinise the draft legislation line by line and will provide the first opportunity to propose, debate and vote on suggested amendments and new clauses. The Committee stage is expected to be complete by 28 November 2024.
Whilst we welcome commitments from the UK Government to not introduce rent controls, it is clear that much more needs to be done to ensure the Renters’ Rights Bill gets the balance right for landlords, agents and tenants.
Many MPs raised Propertymark’s concerns that the UK Government hasn’t yet produced an impact assessment on the changes and the removal of fixed term tenancies that currently ensure tenants and landlords know how long the rental period is and what their rent costs are.
Propertymark will engage further at Committee Stage to ensure the Bill is evidence based and the role of property agents is incorporated fairly so they can support measures to drive up standards across the private rented sector. This will provide benefits for tenants and landlords alike.
Renters’ Rights Bill
Join us for a discussion on the second reading debate of the Renters' Rights Bill. We will outline its implications for property agents, examine MP objections, and review proposals to maintain a fairer private rented sector.
