Private renters’ reform — what does it mean for councils? Matthew Warburton, Policy Advisor at the Association of Retained Council Housing (ARCH), discusses the A Fairer Private Rented Sector White Paper and the potential ramifications for councils.
Boris Johnson chose widening home ownership as the centrepiece of his speech on 9th June. The headline proposal was to extend the Right to Buy to housing association tenants. But a White Paper launched a week later by Michael Gove may prove much more influential in the long run. Gove’s White Paper, A Fairer Private Rented Sector, proposes the biggest shake-up of the private sector since the 1980s and might easily signal the end of the buy-to-let landlord, easing the way for buyers wanting their own home. Reform could also have big implications for local authorities.
The Government has been under pressure for some years to outlaw so-called ‘no fault’ Section 21 evictions — that allow landlords to terminate tenancies without giving any reason. It consulted on the issue in April 2019 and a Renters Reform Bill was announced in that year’s Queen’s Speech. The Bill was not introduced before the 2019 General Election so abolition of Section 21 was included in the Conservative manifesto.
This year’s Queen’s Speech duly included a Renters’ Reform Bill for which this White Paper paves the way, but A Fairer Private Rented Sector proposes a more radical approach than previously envisaged. It proposes an end to fixed-term private tenancies — currently known as assured short-hold tenancies — and the transfer of all existing short-hold tenants onto periodic — indefinite — tenancies that can only be ended on legally-defined grounds.
Local authorities currently have the power to grant fixed-term tenancies, and many do. Older readers may remember that David Cameron’s government proposed to make them mandatory — and the power to do so remains on the statute book. Arguably, the Government should now act to restore parity between the two sectors.
A duty on private landlords
The Levelling Up White Paper signalled the Government’s ‘mission’ to halve the number of non-decent rented homes by 2030. Accordingly, a second major proposal in A Fairer Private Rented Sector is to place a duty on private landlords to comply with the Decent Homes Standard. The White Paper is, however, not clear on whether this duty will apply to the current DHS or a new version including the updates currently under consideration. Nor are any details given on the timetable for introduction of the duty and how long individual landlords will be given to comply with it.
The Government’s Clean Growth Strategy includes an ambition to raise private rented homes to EPC Band C or better by 2030. It is equally vague on how this will be delivered or how in interfaces with the Decent Homes agenda. The White Paper is, however, clear on one point — local authorities will be expected to play a leading role in holding landlords to the new standards and enforcing improvements, although there will also be a new Ombudsman for the private rented sector with similar powers to the Housing Ombudsman. Councils will get new enforcement powers and there will be higher finest for landlord non-compliance.
The first step is pilot schemes with a selection of local authorities to explore different ways of enforcing standards and work with landlords to speed up adoption of the DHS. The introduction of assured short-hold tenancies in 1988 was one of the key steps that unleashed the emergence of the buy-to-let landlords and the spectacular growth of the private rented sector over the next two decades. Mortgage providers have generally been keen on them to ensure repossession if landlords get into arrears. Scrapping them may make lending to landlords less attractive; equally, it may encourage a substantial number of landlords to sell. More may prefer to sell than spend money on improvements to meet the DHS or decarbonisation standards, which they cannot recoup through increased rent.
Sale of the property will be a legitimate ground for possession under the White Paper proposals. Loss of a private tenancy is already the commonest reason given by homeless applicants for local authority housing. Councils should stand ready for even more homeless applicants as a by-product of these reforms, laudable though they are.
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