Following publication of the various party manifestos and prior to the result of today's General Election, we have reviewed and summarised each parties’ intentions for the private rental sector.

Whilst it is impossible to predict any legislative amendments at this stage,  widescale changes to the Assured Shorthold Tenancy market,  particularly as to how such tenancies can be terminated, seems very likely regardless of the successful party.  Any changes  will dictate the way in which your lettings portfolio is managed during  the next Parliament.

Labour

“We will immediately abolish Section 21 ‘no fault’ evictions, prevent private renters being exploited and discriminated against, empower them to challenge unreasonable rent increases, and take steps to decisively raise standards, including extending ‘Awaab’s Law’ to the private sector.”

Labour have echoed the Conservative’s long held desire to end the use of section 21, ‘no fault' evictions.  Whilst this could not, in fact, be introduced immediately upon Labour taking office, we presume that an urgent reintroduction of the Renters (Reform) Bill (“the Bill”) would occur, with tweaks and changes (see recap below).

It seems likely that a Labour version of the Bill would be more tenant friendly, though the manifesto stops short of confirming the introduction of a rent cap.

Awaab’s Law already exists in the social housing sector, and this is something that you are likely to be complying with already in relation to defects, but an extension into the private sector of the requirement for landlords to adhere to statutory timescales to address hazards such as damp and mould in their properties is likely.

Conservatives

“[would] pass a Renters Reform Bill that will deliver fairness in the rental market for landlords and renters alike. We will deliver the court reforms necessary to fully abolish Section 21 and strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour.”

There will be a renewed effort to pass the Bill that was going through Parliament before the General Election was called.  It is likely that a Conservative version of the Bill would take account of Landlords’ concerns about being able to obtain possession of their properties without evidence of default or other grounds and the time this would take under the current Court system.

The Conservative Manifesto therefore also refers to the need to reform the Court process before this is done.  Key areas to be addressed had been identified and include:

• Digitising more of the court process to be simpler and easier for landlords to use.
• Exploring how the courts can prioritise cases that involve antisocial behaviour. This includes mandating that tenancy agreements should have clauses that antisocial behaviour can result in an eviction.
• Improving bailiff recruitment and retention - reducing administrative works in order to prioritise possession.
• Providing early legal advice and better signposting to help tenants.

RENTERS' REFORM BILL RECAP

To recap, the key items of the Bill as it existed prior to the dissolution of Parliament were:

• Abolishing section 21 notices and ending Assured Shorthold Tenancies (“ASTs”)

Section 21 notices were to be abolished under the Bill, which would mean that all notices seeking possession would be ground-based notices under section 8 of the Housing Act 1988 (“the HA 1988”). This would also mean that all tenancies going forward, subject to any transitional provisions, would be assured tenancies. 

It is thought that tenancy deposit protection, a key feature of the current AST regime, would continue to apply so that a failure to comply with the tenancy deposit rules will prevent service of a valid section 8 notice for almost all grounds.

There was no indication that service of a section 8 notice would be made conditional upon landlords complying with their other duties, such as serving a gas safety certificate or EPC.

• Ending fixed-term tenancies

Instead all tenancies would be periodic (open ended). The periods of a tenancy would have to be monthly or not longer than 28 days. Tenants will be able to end the tenancy by giving two months’ notice to quit.

A carve out for student lettings may be inserted.

• Reform of possession grounds

Some existing possession grounds would be kept, together with the introduction of new grounds. Key changes included the expansion of Ground 1, where the landlord requires possession as their own or their spouse’s/civil partner’s only or principal home, to include close family members. There would also be a new Ground 1A for landlords who intend to sell the property. Both grounds could only be used after six months and where a tenant leaves following service of a notice, the landlord is prohibited from letting or marketing the property for three months.

There would be a new mandatory rent arrears ground (Ground 8A) where a tenant is in at least two months’ arrears on three separate occasions over a three-year period prior to service of the notice. The current mandatory Ground 8 (two months’ arrears at the date of service of the notice and the hearing) would remain, but the notice period would be increased from two weeks to four weeks.

• Discretionary Ground 14 (nuisance) would be broadened, so that any behaviour ‘capable of causing’ nuisance or annoyance will provide a ground for possession (as opposed to behaviour ‘likely to cause’ nuisance or annoyance).

There would also be a new mandatory ground (Ground 6A) for compliance with enforcement action, allowing a landlord to seek possession if, for example, the landlord is in breach of a local authority enforcement notice or the landlord has been refused a property licence.

• Restricting rent increases

Landlords would only be able to increase rent annually using the statutory notice procedure set out in section 13 of the HA 1988 and the notice period will be increased from one to two months. Tenants could challenge a rent increase in the First-tier Tribunal (Property Chamber). Crucially it was intended that Landlords would no longer rely on contractual rent review clauses in their tenancy agreements.

• Right to request a pet

A new term would be implied into assured tenancies that a tenant may keep a pet with the landlord’s consent unless the landlord’s refusal is reasonable.  Landlords would be able to require tenants to obtain insurance to cover pet damage and the Tenant Fees Act 2019 would be amended to make this a permitted payment.

Whatever the result today, reform in this area is a key part of both Labour and the Conservative’s manifestos and it is likely that we will start to obtain clarity about the changes that will be introduced in fairly short order. 

Forsters is on hand to provide you with updates and advice in this area, including a detailed review of your existing tenancy precedents and renewals processes.