Impact of the Renters’ Reform Bill

In our last blog, we discussed the proposed Renters’ (Reform) Bill (the “Bill”) and its potential impact on the private rental sector.

Despite the Bill evidently aiming to ease pressure on the rental market, there has been further criticism about the impact it will have on both private landlords and tenants.

Student Housing

The Bill as it stands has caused concern in relation to student lets as these do not seem to be carved out as an exception to the Bill creating potential disruption to landlord’s annual letting models. It is worth noting that the Bill provides an exception for universities and halls of residences but fails to extend this to student let landlords.

While the Bill seeks to protect tenants and create a fairer rental sector, it is crucial to consider the potential unintended consequences that may arise if student housing is not adequately addressed or excluded as the student let landlord business model is based around a letting for an entire academic term.

In response to the comments that this will create a more difficult housing market for students in university towns, the Secretary of State for Levelling Up, Michael Gove, is reportedly already considering an amendment to the Bill. Although not formally introduced yet, suggestions have been made that this will be as follows:

1. introduce a specific possession ground for student tenancies, allowing landlords to end periodic tenancies at a specific point in the academic year;
2. introducing a clear definition of student tenancies; and
3. allowing reasonable notice periods.

The above could provide a solution that covers both student let landlords and students.

Section 21 Notices

The removal of section 21 notices intends to restore a power balance between landlords and tenants. The Bill provides for landlords to repossess on the grounds of ‘antisocial’ behaviour.

It has been reported that this is intended to allow for repossession on the basis that the tenant is proving a nuisance to neighbours and other tenants. However, this means that landlords will now be heavily reliant on their local authority and police in proving that a tenant has committed nuisance or been unsociable in order to be able to evict a tenant on these grounds.

This has raised the issue that we will need the courts to provide guidance on what is considered to be such behaviour that warrants eviction and what evidence will be needed to establish this ground. The threshold that will need to be proven may be challenging which will affect the actual effectiveness of this ground for possession but we have yet to see.

Looking Ahead

The Bill is still in its very early stages and we expect there to be quite a few further amendments to the Bill as drafted. In addition to this, the Labour Party has already heavily criticised the Bill noting it falls far short of the expected end of the ‘feudal’ leasehold reform the Government had pledged to do.  However, that will be a very difficult task and one that cannot be looked at as a quick fix solution as there are many wide-ranging issues that are likely to be covered and will radically alter the legal landscape of the property market in England and have wide implications for property owners and tenants alike.

As the Bill progresses, it is essential to ensure that the concerns and perspectives of all stakeholders, including landlords and students, are taken into account and we suspect there will be considerable lobbying on the subject.

If you have any issues or questions regarding the Bill or its implications please do contact either Stephen Brower or any member of the Property team to discuss further.

If you aren’t receiving our legal updates directly to your mailbox, please sign up now