What’s the latest on proposals to scrap Section 21, introduce lifetime deposits and provide greater access to the database of criminal landlords and agents?
Since the Conservatives’ decisive election victory in December 2019, letting agents have been keeping a keen eye on the Renters’ Reform Bill’s progress.
The Bill, which includes a set of pledges to provide a ‘better deal for renters’, was set out as part of the Queen’s Speech after Boris Johnson was elected as Prime Minister.
The headline policy of the Renters’ Reform Bill is removing Section 21 from the Housing Act 1988, but it contains a range of other measures affecting letting agents.
It was expected that the Renters’ Reform Bill would make swift progress through Parliament during 2020 as the Government made clear on several occasions that it was looking to scrap Section 21 as quickly as possible.
However, the Covid-19 pandemic put many things on hold, not least pending legislation such as this. The Renters’ Reform Bill has not been presented to Parliament, so its timeline for introduction remains uncertain.
A long delay for the Renters’ Reform Bill?
In early 2020, before the pandemic took hold, the Government said the Bill would be introduced ‘when time allows’. However, later transpired that the Renters’ Reform Bill had joined a long list of pushed back legislation as civil servants remained tasked with managing coronavirus’s impact.
During September, Housing Minister Christopher Pincher told the Commons: “We will do that at the appropriate time when there is a sensible and stable economic and social terrain on which to do it.”
Pincher’s statement suggested a potentially long delay for the Renters’ Reform Bill. However, one of his Labour counterparts, Thangam Debbonaire, said the legislation ‘could not wait’.
“The situation facing renters couldn’t be more urgent. Lifting the ban on evictions as we head into a second Covid spike is irresponsible and a betrayal of their promise that no renter will lose their home because of Coronavirus,” she said.
“Renters are being served Section 21 notices, leading to automatic evictions, as we speak.”
Despite Labour’s protests, it could be some time before the Renters’ Reform Bill is introduced. It’s important to remember that the Tenant Fees Act – introduced in June 2019 – took over three years to become law after it was announced during a time when there was nothing like the Covid-19 pandemic to contend with.
Although there is no date set for the Bill to make its way through Parliament, it’s important that letting agents continue to monitor its progress over the coming months.
Even more so as announced in January by Kelly Tolhurst, a minister at the Ministry of Housing, Communities and Local Government (who has since resigned for personal reasons), that a Renters’ Reform Bill would be introduced ‘very soon’.
She told MPs: “The government are committed to enhancing renters’ security by abolishing no-fault evictions. During the Covid-19 pandemic, our collective efforts have been focused on protecting people during the outbreak. This has included introducing longer notice periods and preventing evictions at the pandemic’s height on public health grounds. We are committed to abolishing no-fault evictions under section 21.”
The industry has also been given a taster of what’s to come as most evictions have been banned for extensive periods of the last 12 months.
Reminder – what does the Renters’ Reform Bill propose?
As mentioned above, the Renters’ Reform Bill intends to remove Section 21 – which currently allows landlords to regain possession of a property without providing a reason – from the Housing Act 1988.
It has been proposed that Section 21 will be replaced with a more comprehensive Section 8, which will require landlords to give a ‘concrete, evidenced reason already specified in law’ if they want to repossess a rental property.
The Bill also proposes to introduce a lifetime deposit system for tenants so they can avoid having to raise funds for a security deposit before receiving their existing one back when moving between rental properties.
While details on how this proposal could work in practice have been limited, it is believed that the Government intends to devise a system whereby renters hold a digital certificate which has all the details of their security deposit.
When they come to move, they would present the certificate and then the deposit would be transferred from the existing landlord to the new one.
It has not yet been made clear how a lifetime deposit system would allow for necessary deposit deductions or how it would work in practice when renters are part of a shared tenancy agreement.
The other main proposal outlined in the Renters’ Reform Bill is to extend access to the Government’s database of rogue landlords and property agents.
Currently, the database – which keeps a record of every landlord or letting agent who has received a banning order, been convicted of a banning order offence or received two or more Civil Penalties within 12 months – is only accessible to local authorities.
It has been proposed that the database would be made available to tenants, agents, landlords, employers and professional bodies. It is believed this step would help consumers to avoid criminal firms and landlords, while employers would have access to key information about prospective applicants where necessary. Although it could still be a while before these measures are implemented, they will affect all agencies when they are introduced. Although the Renters’ Reform Bill’s progress remains uncertain, it’s clear the Government intends to ban Section 21 evictions as soon as possible. You can keep up to date with the Bill’s latest developments here.