Renters’ Rights Bill - the potential impact on local authorities

With the Renter’s Rights legislation likely to be passed this summer, we spoke to and experienced revenues and benefits manager currently working within Oxfordshire and dealing with specific challenges around the private sector rental markets, about the impact it may have on local authorities. The two main aspects of the bill that will most affect local authorities are the removal of section 21 and the decent homes standard.

Section 21 removal

Referred to in the media as “no fault evictions”, giving notice under section 21 is a fairly fast process for landlords to regain possession of property with two months’ notice , that can be issued even when there are no arrears or anti-social behaviour.

With the removal of section 21, all evictions will have to go under Section 8, which is slower and there are conditions that need to be met before the notice can be issued, such as arrears or anti-social behaviour.

The new legislation is going to change Section 8 to include the ability to sell a property, but the landlord will still need to give four months’ notice.

This could mean that there is less housing stock available and that rental prices will go up. It could also mean an increase in temporary accommodation requirements placed on the local authority particularly if there are a lot of section 21 notices issued before the legislation comes in (which does seem to be the case).

Many cities do not have enough housing stock and uses a lot of private landlords; where are fewer social landlords in a city, this leads to a high level of demand.

Even though the new legislation will say that a landlord cannot refuse a tenant who is on benefits, the landlord will still be able to choose which tenant they want in the property and they can set the rent at the beginning at a rate which would price out the social tenant.

The legislation is likely to mean less supply, more demand and higher rents.

Decent homes standard

Whilst the council welcomes the changes - no tenant should live in sub-standard accommodation - it does bring in more bureaucratic processes, with the need for new processes, dealing with compliance and having fast turnarounds in place.

Awaab’s Law requires social landlords to fix dangerous damp and mould in rental properties within set timeframes, as well as address all emergency repairs within 24 hours.

The Renters’ Rights Bill is going to extend this law into the private rental sector, which will probably increase the volume of complaints raised.

There are other aspects of rental standards in the private sector that may cause some issues, particularly in towns and cities where there are properties that have planning restrictions on them. The landlord might well want to put changes in place, but is unlikely to get planning permission to do so.

Enforcement

Local authorities already have the right to enforce decent standards and appropriate behaviours of landlords and can issue fines. The new legislation will give increased powers to investigate landlords and fines will increase, particularly for persistent offenders. This will give more strength and power to the local authority, which will retain any revenue generated from fines.

Some councils already have a licencing scheme for all landlords and enforces standards, so has the systems in place. However, this may be more of a challenge for local authorities who do not have those set up already, so may choose not to go down the enforcement route.

In conclusion, many local authorities rely on the private rental sector and there could well be an increase in temporary accommodation, which may be out of area, as a result of supply shortages.