The new bill will also strengthen the rights of private renters by applying the legally binding Decent Homes Standard to the sector and introduce a new ombudsman for private landlords to help resolve issues without having to go to court.
A new property portal will be introduced under the act, where landlords can access information about their obligations and tenants can get performance information that will help them hold their landlord to account.
Landlords and lettings agents will also be required to accept pets as part of the reforms being proposed.
There has been a sharp rise in tenants moving property in order to accommodate a pet, according to the latest survey from The Deposit Protection Service (The DPS).
Around a thousand tenants who had moved property between October 2021 and March 2022 took part in the DPS’ 2022 tenant survey, with 30% saying that they had done so to accommodate a pet – making it the most common reason for moving.
David Reed, operations director of Richmond estate agents, Antony Roberts, commented: “The devil will be in the detail but any railroading of landlords to accept any pet, or any potential pet, will only further limit the supply of property to rent and exacerbate the problems that tenants already face.
“I believe that the previous way (before the Tenants Fees Act), of dealing with pets worked relatively well – in consideration of the landlord accepting a pet, if they wished to do so in principle, then the tenant was expected to pay a higher deposit to help protect the landlord against the perceived risk of pet damage and additional cleaning.
“One of the major issues in the private rental sector is the loss of droves of landlords over recent years by way of ongoing legislative intervention by the Government. This has caused the restricted supply of property available to rent for most current and would-be tenants today. As a result, they face higher rents, limited choice and a bunfight in many cases.
“Of course, we welcome driving up standards of safety, security and maintenance and rightly punishing landlords that abhorrently fail to meet these standards, but in order to have a healthy rental market, the government also needs to help attract new or previous landlords to offer their property for letting.”
Nathan Emerson, Propertymark CEO, commented: “After waiting three years to see exactly what this reform will look like, we’ve now got a set of proposals titled ‘The Fairer Private Rented Sector White Paper’. But there are some elements that don’t appear to be so. How is it fair that a tenant can simply end a tenancy at a time of their choosing, but an agent or landlord has to present a valid reason that is defined in law?
“We’ve already set out broadly what we think reform should look like in our The Future of Renting paper.
“Now we have the detail of what’s being proposed, we will be closely scrutinising it and working with Ministers to help them understand how on a practical level it will impact our letting agents members and their landlords.
“Our sector provides around 4.4 million households in England with a place to live. Property is a good long-term investment but the number of property owners choosing to withdraw from this area is growing*. That’s the result of a decade of tax and regulatory burden that simply does not incentivise investment, especially for single property landlords who make up 43% of the market.
“The private rental market is already under huge strain with renters outstripping available properties and we need to be able to attract new investment.
“If Ministers really do want to create a ‘fairer private rented sector’, they must work with us to ensure these reforms are carefully balanced and any interventions to achieve short-term objectives do not constrain the market in the longer term.”
Ben Beadle, chief executive of the National Residential Landlords Association, said: “Whilst headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful, the detail to follow must retain the confidence of responsible landlords, as well as improving tenants’ rights.
“We will be analysing the government’s plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.
“The eventual legislation needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”
Richard Donnell, executive director of research and insight at Zoopla, said: “With the backdrop of the cost-of-living crisis putting pressure on renters, these reforms are welcome and timely, particularly as they’re largely focused on boosting the quality of housing in the rented sector. The private rented sector plays an important role in the housing market, providing much needed homes for a wide spectrum of households. These reforms mark another milestone in the journey to create a suitable equilibrium between renters and private landlords who provide the majority of homes for rent.”
“However, it’s important to note that the private rented sector is under growing strain due to lower levels of new investment by private landlords, largely a result of tax changes and more regulation. There are a growing number of amateur, private landlords exiting the market, offsetting the increased investment from corporate landlords and institutional investors into the build-to-rent market. There is a delicate balance to ensure reforms don’t compound these supply-side challenges which continue to keep an upward pressure on rents, which have risen 11% in the last year. Ensuring decent homes is paramount but so is the investment into this important sector of the housing market.”
“The Zoopla Lettings Advisory Board has advocated a range of initiatives to improve the transparency over the process of owning and renting homes. In particular, the need for a property register for rented homes to help with compliance on standards of accommodation and the move to define when homes meet the Decent Homes Standard for private rented homes. This will also boost transparency for renters and landlords who both have to deal with often complex regulatory requirements. There is a lot of detail to work through in how this is rolled out and Zoopla will continue to work with our advisory board and estate agency partners to seek operational efficiencies in the lettings market through our software platforms.”
Ian Fletcher, director of policy at the British Property Federation, commented: “Efforts to create a better and world-leading rental sector for tenants and investors is something we very much welcome. Good landlords know that reform can be win-win, protecting and enhancing renters’ rights but also encouraging residents to feel at home, increasing the time they stay and ultimately benefitting tenants and investors.
“There are occasions when issues arise on both sides of a tenancy, and while it is a last resort the renters’ reform will result in more disagreements between investors and tenants being seen in court. It is vital that the government delivers on its digitalisation of the courts’ agenda ahead of these reforms to ensure a swift resolution to these cases. Investors will feel let down if that is not the case.
“It is now important the sector works with government to ensure that the reforms deliver for renters and investors. That was the promise given by the Government in 2019, and we look forward to playing our part in ensuring the reforms deliver a stable home and customer excellence for renters – two of the key pillars on which the Build-to-Rent sector has been built over the last decade.”
Daniel Evans, chair of the AIIC, remarked: “This has come a lot sooner than expected, which suggests political expediency and distractions on everything from the Rwanda debacle to the vote of no confidence last week are part of the reason for the White Paper appearing so suddenly. While the clarity and sense of certainty will be welcomed by the industry, it seems likely that parts of the lettings industry will be happier than others about what is included.
“The issue of pets is a thorny one, and something that is difficult to mandate, but it seems like the government is trying to make it more of a right to keep pets.
“The Section 21 and Section 8 stuff has largely been baked-in already, with it long being known that these would be subject to reform, but it’s interesting that the government seems to have quietly shelved the idea of a landlord register or mandatory redress, which some had argued would improve compliance and help rid the sector of rogue operators.
“It seems certain that there will be opposition against some of what is included in the White Paper, so we’re all in for a bit of a bumpy ride yet.”