THE WHITE PAPER PROPOSALS FOR THE PRIVATE RENTED SECTOR (PRS)

MY POSITIVE SPIN ON THE WHITE PAPER PROPOSALS FOR THE PRIVATE RENTED SECTOR (PRS)

You will have all seen or heard by now of the proposals contained in the governments new White Paper published in June.  Unlikely to become law until next Spring 2023. The White Paper builds on the vision of the Levelling Up White Paper and sets out plans to fundamentally reform the PRS and level up housing quality. It offers up a 12-point plan. I have taken 6 of them that I consider might have caused the biggest stir and include my ‘observations’ as both an Agent and a Landlord myself. 

Removing landlords’ rights to evict tenants ‘without fault’ and then give them more powers to evict, but only for established and set reasons

“On the basis that it is proposed that the Section 8 will encompass some of the reasons we would have used under Section 21 in the past, are we worrying more than we need to at this point in time? 

How many times as a landlord have you issued a Section 21 just because you felt like it?

In my years of experience, I would say I have only issued a Section 21 twice that potentially might not be permitted under the proposals.  The majority have been for selling purposes or landlord or member of family moving in or rent arrears that didn’t come under a Section 8.  Yes, I appreciate there might still be the nice tenant that turns into a nightmare tenant but there will, I am sure still be other grounds for eviction based on breach of tenancy as there are now!”

Government will introduce a property portal for all UK rented homes that will include information from the official rogue landlord database and details of a landlord’s compliance

“Unless you are a ‘rogue landlord’ I would hope this would not worry you. I guess for you readers, good ones, the issue will be how much you have to pay to be ‘registered or on this list’ but other than that you are great landlords who tick all the compliance boxes and maintain your properties to a good standard, so maybe a good thing to eliminate those not so good”

Agents and landlords will be prevented from refusing tenants on benefits without good reason

“As an agent this does not worry me as I would always include perspective applications from tenants on benefits when offering landlords, a choice and very often tenants openly offer reasons why they are on benefits that they are happy to share with Landlords.  If landlords wish to take out Rent Protection (more and more are likely to start doing this due to the cost of living increase) tenants have to pass referencing or have guarantors that do, so I am assuming referencing companies may need to adjust their criteria if this currently does not include tenants on benefits?”

Any tenant who wishes to live with their pets will have a ‘right’ to do so, albeit subject to a reasonability test

“I would say most landlords or potential landlords I speak to are likely to agree to ‘Pets considered’ when we go to the market.  Yes, there are a few of you that will say NO but please don’t let this proposal worry you at this point, let’s see how it irons out and what is ‘reasonable’ – will it be reasonable for a landlord with a dog allergy to choose a tenant without a pet of a tenant with a golden retriever?  We already apply a reasonability test of sorts when ‘considering a tenant with a pet…1 small dog in a flat or house with no garden; far more reasonable than 3 dogs; Great Dane in a 1 bedroom first floor flat – No! There will have to be some sense in this and still landlords get the choice, and actually a wider choice sometimes is not a bad thing, there are some fantastic applicants with pets that have great jobs, great incomes looking for long term lets who are as house proud (often more, with the vacuum!) as the next. There is likely to be a requirement for some kind of pet insurance alongside this proposal so watch this space….”

Rents will only be allowed to increase once a year

“When was the last time you increased your rent?  I suspect for the majority of you it will be “mmmm I haven’t since they have been there”.   If you have long term tenants in and have not increased the rent for some time maybe now is the time to consider a fair and sensible increase (increase in utilities considered of course).  Maybe use the opportunity to get them to sign a new AST? Start with a fair rent and tenants expect a small increase every year (which most AST’s currently include but not actioned).”

All new tenancies will be periodic and governed by the new rules, ushering out ASTs. By periodic, the government means fixed-term tenancies. Tenants will only be required to give two months’ notice at any time during that period, and landlords only able to evict them under circumstances including both ‘fault’ (i.e. rent arrears or anti-social behaviour/damage under the Section 8) or no-fault (i.e. to move back into a property or sell it) and giving 2 months’ notice

“Without a doubt, and understandably this has sent a ripple of panic through the PRS and I totally understand entirely why in some cases (Student Landlords especially).  My positive slant on this is that it will be even more about doing our best to select the best applicant, given all the extra choices you will have (noted above!)  Being thorough in your investigations and referencing and getting to know the applicants in the first instance to help you make the right choice.  Your rental property will be compliant and tick all the health and safety boxes so notice for those reasons should not be an issue.   If unexpected things happen like a job loss in the first 6 months, then wouldn’t you rather let them than end up with rent arrears?  Again, it’s all in the communication, early and ongoing.   Yes, I appreciate things can still go wrong and you may end up with a tenant wanting to leave within 2 months but most that I deal with are looking for long term homes and even those that aren’t will all be part of the application and choice process. The majority of the time this is all manageable with good choices, good communication and relationships”

There ends my POSITIVE take on the White Paper –

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