TDS welcomes Renters Reform Bill but warns of risks ahead
TDS has welcomed the long-awaited introduction of the Renters Reform Bill.
“We are strongly committed to the raising of standards in the private rented sector, and we think that many of these measures can achieve that ambition” says Steve Harriott, CEO of TDS, “But there are already over 160 different pieces of legislation affecting the private rented sector and the trick will be making sure the Bill really does deliver the changes that are needed.”
The abolition of Section 21 ‘no fault’ evictions will clearly benefit tenants in the short term, but this needs to be balanced with provisions to protect landlords. This is why the provisions for speedier court action in relation to anti-social behaviour and rent arrears, as well as improving and digitising the Court processes, are all in place before Section 21 is abolished.
Private Rented Sector Ombudsman
TDS fully supports the introduction of the Private Rented Sector Ombudsman, but further detail is required to fulfill its potential to truly provide redress, particularly for more vulnerable tenants.
Similarly, the proposed Property Portal can potentially offer possibilities to enforce against criminal landlords, but we need to learn from the mistakes made in creating the Rogue Landlord database, which clearly has not worked.
TDS is also supportive of planned new rules to require landlords to consider requests from tenants to keep pets. We think the removal of the Pet Deposit in 2019 was, in hindsight, a mistake and we need to make sure that the insurance market develops effective insurance policies to protect landlords where pets cause damage.
There is a risk that significant gaps will emerge between what the Bill hopes to achieve on paper and what it achieves in practice. Here we discuss three key issues that we will encourage the Government to consider as the Bill progresses through Parliament.
Education and Awareness
The Bill will only be effective if landlords and tenants are aware of, and understand, their new rights and responsibilities. Whilst the Government intends to use the new Property Portal to communicate changes to landlords and help tenants make informed decisions about their housing options, our research suggests that the majority of tenants are ignorant of these reform proposals.
In a 2022 survey carried out with a representative sample of over 2000 tenants [funded by the TDS Charitable Foundation], 86% of tenants had not heard about the Government’s plans for reforming the sector in England or knew anything about what they are proposing. Awareness of existing official information sources is also low; with only 34% confirming having received the How to Rent guide which all landlords must provide at the start of tenancy.
Ensuring landlords are also aware of the requirement to register with the Property Portal and the role of the Private Rented Sector Ombudsman will be a key challenge. Most landlords only have small portfolios of one or two properties, do not pursue property management as a business and are not members of professional organisations. In a 2022 survey [funded also by the TDS Charitable Foundation] carried out with 559 landlords, 70% said they felt changes in the law were not clearly communicated and that it was difficult to keep up to date.
TDS will support and encourage the Government to adopt an effective communication and education campaign. TDS will also assume an active role in providing impartial information and guidance to letting agents, landlords and tenants, through our website, Tlyfe tenant app and our newsletters.
Local authority capacity
TDS is supportive of the aim to raise standards in the private rented sector through the introduction of a Decent Homes Standard and a Property Portal. Compared to other tenures, private rented homes are more likely to have problems with damp or disrepair and to pose a threat to health and wellbeing. The introduction of the Property Portal may well be able to support enforcement by making sure local authorities have the information they need on their local private rented sectors. In principle, they should be better able to target criminal landlords that tarnish the reputation of the sector. However, this assumes that criminal landlords will comply with the new laws. A stronger focus on how the new law will be enforced is essential.
Much of the Renters Reform Bill’s proposals – including ensuring compliance with the requirement to register with the Portal and ensuring compliance with the Private Rented Sector Ombudsman decisions – will fall to local authorities. Enforcement powers will range from issuing a civil penalty of up to £5,000, through to a £30,000 fine or criminal prosecution and the potential for a Banning Order for repeat offenders.
However, how these enforcement activities will be financed is an important question that remains largely unanswered. Research shows that local authorities lack both the funds and staff necessary to enforce the legislation which already exists – let alone the new burdens. TDS will continue to encourage the Government to publish the new burdens assessment promised in the White Paper and ensure that adequate funding is made available.
Early resolution | prioritising an evidence-based approach
TDS welcomes the move towards reforming dispute resolution in the private rented sector through the introduction of a new Private Rented Sector Ombudsman. The current landscape is complex and when things go wrong, often the only option is to go to court. The role of Ombuds is to protect consumer rights, and only tenants will be able to complain to the Ombudsman.
Based on TDS’s success in helping landlords, letting agents and tenants to resolve disputes over deposits, TDS supports the wider use of out-of-court mechanisms to help resolve complaints early. However, we believe the evidence base for using different techniques within the private rented sector needs to be improved and that consideration should be given to a wider range of approaches that are available, and not just consider mediation.
Steve Harriott concludes:
“The Renters Reform Bill is potentially a ground-breaking piece of legislation which will shape the Private Rented Sector for decades to come, so it is important that Government gets it right and listens to tenants, landlords, letting agents and those organisations, like TDS, who have a long-term interest in a properly functioning PRS that works for everyone. We are committed to making this happen.”