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Rental reform – what could autumn bring for the private rented sector?

Much of 2021 has seen a raft of new and changing regulations in the private rented sector, including the ending of the eviction ban and the first stage of the stamp duty holiday, changes to Right to Rent and more.

Earlier this year, the Queen’s Speech brought the Renters’ Reform Bill back on the agenda, confirming the government’s intention to ‘enhance the rights of those who rent’.

The government has promised a White Paper on rental reform, which is set to be released this autumn and will flesh out its plans for widespread changes to the PRS.

Here at Holland Properties, we discuss the Renters’ Reform Bill and how it could impact landlords operating in the private rented sector going forward.

What do we know about the Renters’ Reform Bill so far?

The government is due to outline the Renters’ Reform Bill in the autumn, which is set to include abolishing Section 21 rights for landlords, while strengthening the Section 8 eviction process.

The controversial Bill will also introduce lifetime deposits which can ease the burden on tenants when moving from one tenancy to the next, helping to speed up and reduce the cost of moving rental properties for tenants.

Other reforms include ensuring all tenants have a right to redress, and ensuring well-targeted, effective enforcement that drives out criminal landlords, which could potentially involve requiring all private landlords to belong to a redress scheme.

The Bill is also expected to explore improvements and possible efficiencies to the possession process in the courts, to make it quicker and easier for both landlords and tenants to use.

In addition, ministers would establish a new Building Safety Regulator to ensure ‘the tragedies of the past are never repeated’, in reference to the Grenfell tragedy.

How will lifetime deposits aid tenants?

As a fundamental element of the Bill, lifetime deposits will act as a transferable sum of money which follows tenants through their rental journey.

Currently, most agents and landlords take a five-week security deposit at the outset of a new tenancy. In most cases, a tenant will not have received the deposit on their previous property back before paying a deposit on the next property.

However, the Tenancy Deposit Protection Working Group noted that it’s ‘unclear how significant the problem of deposit affordability is for tenants and how they are managing to bridge the gap of needing to find two deposit amounts’.

While the government is yet to disclose any details on how lifetime deposits might work, potential issues have since been raised.

These include the question of what would happen if the previous landlord wanted to make reductions from the tenant’s deposit when they move. Would the new landlord receive a lower deposit, or would the tenant be expected to top it up?

Additionally, Money.co.uk’s review of the lifetime deposit concept pointed out that not all moves between rental properties are seamless, with gaps and overlaps between contracts. Therefore, it needs to be made clear what happens to the deposit in these circumstances.

When can landlords expect these changes?

While rental reform is at the top of the agenda of the government, it remains uncertain what reform will look like and when exactly it will happen.

However, landlords may be able to gauge how soon the government expects to launch its looming white paper after the Conservative Party Conference, which will run from October 3-6.

MPs Eddie Hughes and Richard Holden, who is an ardent supporter of turning ‘generation rent into generation buy’, are to front a fringe event on October 5, which will discuss the future of renting in the context of the Renters’ Reform Bill.

Until then, landlords will need to watch out for the launch of the white paper, which could be followed by further consultations or the launch of a version of the Bill to Parliament.

With much to anticipate, it’s important for landlords to keep an eye on the news while focusing on their existing compliance obligations. Working with a proactive letting agent can help to ensure that your property is in the best hands, and you’re always kept up to speed with rental sector changes.

Here at Holland Properties, we can promise just that, using our years of knowledge and experience to help manage your tenancies and allow you to get the most from your rental properties as a result.

For further guidance on any part of the lettings process in London, please contact us today. You can also request a free and instant online valuation to see how much rent you could be charging in the current marketplace.

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