At the start of the year, I predicted that the long-promised bill on rental reform could finally emerge early this year. The publication last week (9 February 2023) of a House of Commons report does perhaps mean that prediction may have been a little optimistic.
The Levelling Up, Housing and Communities Committee have published their report, following an inquiry that commenced in the summer of 2022 into the proposed reform of the sector.
The report is lengthy and detailed, reporting on the various aspects of the reforms, including the proposals to improve the quality of housing.
The parts of the report that are most likely to prompt debate however relate to the proposed reforms regarding ASTs and the ability to grant fixed term tenancies.
The Committee flags concerns from both landlord and tenant representatives concerning letting to students, and how the removal of the ability to grant a fixed-term tenancy will impact this sector, with the recommendation being that fixed-term student lettings should be allowed to continue, provided landlords of student accommodation sing up to a government-approved code of conduct.
The key proposal regarding the abolition of section 21 and reform of the possession grounds was, unsurprisingly, the focus of much of the debate. The report discusses the evidence it heard regarding the proposed new grounds for possession, the issues with the current possession grounds and the difficulties with the court possession system. The notable committee recommendations include:-
· That landlords be prevented from using the proposed new ‘sale’ possession ground during the first year of the tenancy, with that ground then needing a 4 month notice period
· Encouraging sale with sitting tenants, possibly by preventing notice being served unless a property has initially been marketed for sale with sitting tenants for 6 months
· Asking the Court to reconsider the establishment of a specialist housing court
· Require the courts to prioritise rent arrears and anti-social behaviour possession cases
There are parts of the report that landlords may welcome. The committee formally record that there is a belief that, both the proposed reforms, combined with changes over recent years (notably to the tax regime) seem to be designed to force landlords with small portfolios out of the market, with the committee asking the Government for comment on the role it anticipates small portfolio landlords to play in the sector.
But it is difficult to see how the committee can, on the one hand, note the concerns the proposed reforms may have on the sector as a whole, when on the other hand propose recommendations that could have a really significant impact on landlords – and particularly those with smaller portfolio. From the landlord point of view, it is difficult to read the recommendations concerning tenancy reform without expressing concern at best, exasperation at worst!
The Government has 2 months to respond. It will be interesting to see if any of the recommendations do make it to the draft legislation in due course.
For anyone involved with the private rented sector, the report is certainly worth a read. It can be found here: Reforming the Private Rented Sector - Levelling Up, Housing and Communities Committee (parliament.uk)
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