Following the publication of the Government’s plans for A fairer private rented sector a number of creative responses, or reactions of horror, were published far and wide, writes Karen Bright, a Partner and Head of the Litigation & Dispute Resolution teams at solicitors Bishop & Sewell.
Reported here the Joseph Rowntree Foundation (JRF) is calling for policies that deliberately target reducing the size of the private rented sector (PRS). Apparently, who owns the 25 million homes available today in the UK, and who they are available to, is as important as new construction, in their opinion.
The JRF’s blue sky thinking is to give tenants a right to buy their property off the landlord. It’s hard to see what legislation the government could draft that would compel a landlord to comply with such a request. But the JRF’s perspective is that, “Landlords are likely considering their future in the sector due to planned reforms to the PRS to improve tenants’ rights alongside existing tax changes and obligations on landlords to meet higher energy efficiency standards.
“The government should see this as an opportunity to implement policies which see homes change hands from landlords to tenants. This would help budding homeowners previously unable to access the market find affordable, secure homes and give them the chance to build wealth.”
Darren Baxter, Senior Policy Advisor at JRF, says: “The housing market is not working. In recent decades we have seen the rapid growth of the private rented sector alongside the decline in the proportion of households in social housing or owner occupation. Consequently, millions of people are stuck paying unaffordable rents, worried about being evicted by their landlord and have little opportunity to save.”
Much of this is true, but making it harder for landlords to evict tenants who are in arears will ultimately only shrink the size of the available market available to rent.
Along with many lawyers in this sector I disagree with the plans for the abolition of no fault evictions (s.21 Notices). Recent reports by lettings agents here in London have shown there are often over six applications for every tenancy available. It is very difficult to secure any type of rental property (leaving aside whether it is affordable) at the moment. Trying to remove the option to evict, will likely result in there being less properties on the market for rental. This will simply push up rental prices.
What the government fails to consider is the burden on landlords, particularly those who are not professional landlords and who may only have one or two properties. Where there is a tenant in situ, stops paying rent the legal costs to get a property back can often be in excess of £5,000 (more, if the proceedings are defended). It can take six months or more from when a tenant stops paying rent until a landlord may get its property back.
Tenants often do not leave forwarding addresses and have no assets, leaving the landlord unable to recover the arrears of rent or legal costs. With the reduction in how much a landlord can take for a deposit and all the hoops that have to be jumped through to serve a s21 Notice, the current situation is already far more favourable to tenants.
Perhaps the Government should give more thought to extending the length of the s21 Notice; where a tenant is up to date with their rent payments, to allow the tenant more time to find alternative accommodation.
As Inside Housing reported recently the transience of housing ministers continues. We have had twenty since 1997. The portfolio seems to quickly defeat everyone grappling with the challenge that the UK needs more homes. Stuart Andrew MP resigned after just 148 days in the role.
Karen Bright is a Partner and Head of the Litigation & Dispute Resolution teams. Should you require any further advice or assistance, please contact her quoting re CB345 on email: [email protected] or call her, on 0207 7079 2410.
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