Renters’ Reform Bill: what does it mean for social landlords and tenants?

The change comes as new figures published by the Ministry of Justice on court eviction proceedings on Thursday showed a 116% annual rise in no-fault evictions, while 61,000 households have been threatened with homelessness via Section 21 evictions since the ban was announced. 

However, there are concerns that landlords will be able to use loopholes to get around the new rule. New grounds for possession include selling the property, moving a family member in, needing it for student accommodation, and social housing providers selling as part of the Rent to Buy scheme. 

For all grounds other than anti-social behaviour – for which it says the court cannot make a possession order until 14 days after notice is served – the bill sets out specific notice periods. 

Of particular concern is a new ground for possession that would allow a landlord to serve a tenant with an eviction notice if they or a family member want to move in. They can do this six months into a tenancy.

After the tenant has moved out, the landlord must wait three months before letting or advertising to let the property. If not, they could face a £5,000 penalty, issued by the local authority. 

Simon Mullings, co-chair of the Housing Law Practitioners’ Association, has raised concerns about how that would work. “It will be very easy for them to circumvent the safeguards. It’s similar to how it works in Scotland – and in Scotland, anecdotally, landlords just get round it very easily,” he says.

“The timescale is also tiny – three months.” Mr Mullings adds that overall, he believes the bill is “disappointing” with a “whole raft of landlord-friendly stuff being brought in under cover of Section 21 being abolished”.

“I can imagine there’d be quite a lot of landlords who would just take a punt on not getting caught, because by and large the odds would be that they wouldn’t be”

Giles Peaker, solicitor and partner at Anthony Gold, who is overall more positive about the reforms, says of the new ground: “The practical difficulty is how on earth are councils going to know? Unless the former tenant notices and informs them, there’s nothing in it for the tenant.

“I would have thought the obvious thing to do – and maybe this will be introduced down the line – would be to make it a rent repayment order offence.”

This would allow tenants to claim a year’s worth of rent because they were illegally evicted and could serve as a more significant deterrent. 

“I can imagine there’d be quite a lot of landlords who would just take a punt on not getting caught, because by and large the odds would be that they wouldn’t be,” Mr Peaker says.

Other changes include an increase in the notice period for rent arrears eviction grounds from two weeks to four. And if a tenant’s arrears are only because a Universal Credit payment that they are entitled to has not yet been paid, they cannot be evicted.

But the bill also introduces a heavily criticised new ground for possession for repeated rent arrears. It means that tenants who – over a period of three years – have failed to pay two months’ rent for at least a day on three separate occasions can be evicted. 

Mr Peaker says: “It’s completely possible to imagine someone who’s had a series of unfortunate events, for example a standing order didn’t get transferred over when they changed their bank account or they were between jobs for a couple of months so that various spikes of two months arrears arose, paid off instantly. No other areas in the interim and they would still be caught by that.”

Mr Mullings is concerned that social landlords would also use this ground.

On this, Will Jeffwitz, head of policy at the National Housing Federation, says that housing associations have pledged not to evict anyone as a result of financial hardship “where the tenant is engaging with their housing association to get their payments back on track”.

Mr Jeffwitz says an eviction is “always a last resort in social housing and tends to follow rare cases of severe anti-social behaviour or very high rent arrears”.

“We support the decision to end no-fault evictions in all rented homes, including social housing. We are aware that this may cause some operational issues in some cases, but it would be wrong for social tenants to have less statutory protection than private sector tenants,” he adds.

There are also concerns around whether ending shorthold tenancies and Section 21 evictions may lead to an unwillingness of landlords to offer up their properties to homeless people. 

Mr Mullings says: “For some time, the government has been shifting the provision of all kinds of homelessness accommodation towards just introducing people to private landlords. What that did was just basically mean that the assured shorthold tenancy became the major way in which local authorities carried out their duties to homeless people.

“Statistically, the greatest cause of homelessness is the ending of a shorthold tenancy. This obviously does do away with the assured shorthold tenancy. How that plays through in the willingness of private landlords to put their accommodation up to local authorities for use for homeless people, we will have to see.”

He adds: “It may be that a lot of landlords were previously willing to do that because they always had Section 21 to bring it to an end whenever they wanted to.”

Offences and enforcement

The new powers given to local authorities to penalise landlords for breaking the rules – such as misusing possession grounds – are a significant part of the reforms. These powers allow them to issue fines of up to £30,000 or prosecute for a criminal offence.

The bill gives the secretary of state the power to appoint a lead enforcement authority, or lead enforcement authorities, for the purposes of any relevant provisions of the landlord legislation. 

Although the move is welcomed, the crucial element will be whether councils are given the initial funding for enforcement.

The bill says that the secretary of state “may give financial assistance (by way of grant, loan guarantee or in any other form) or make other payments to a local housing authority” in respect of the new powers.

“It’s designed to get the bad private sector landlords. My only fear is that bad landlords are bad landlords and there are lots of protections which should be enforced at present to protect tenants”

Darren Rodwell, executive member for regeneration, housing and planning at London Councils, says that boroughs want to work with government to make a success of the reforms. “But it is vital that councils are provided with the powers and resources we need to enforce the new rules,” he says. 

London Councils also said in a statement that with the decreasing availability of PRS properties in London, boroughs believe it is “vital the government’s reforms support landlords and positively encourage them to increase standards”.

Charlotte Cook, a partner at Winckworth Sherwood who represents housing associations and councils, says the bill is positive and should not have any adverse impacts on social housing providers. 

“It’s designed to get the bad private sector landlords. My only fear is that bad landlords are bad landlords and there are lots of protections which should be enforced at present to protect tenants. 

“It’s a brilliant thing – it will be super if it does what it says and if local authorities are given the powers and the support, financial and otherwise, to enforce this. 

“We’ve had things like the Protection from Eviction Act 1977… but there are still those landlords who are not going to take a blind bit of notice of this and those are the ones that it really is meant to be getting at.”

What is missing from the bill?

Justin Bates, barrister at Landmark Chambers, highlights three things previously proposed by government that were missing from the bill.

Although the government said ahead of the bill’s publication that it would make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or families with children, this was not mentioned in the first iteration. Neither was the new Decent Homes Standard for the PRS promised in the white paper, but this will likely come at a later date.

The bill is also missing detail on how councils will enforce their new powers. “If they just don’t have the relevant officers, they’re not going to do anything. You should and I think could have a statutory duty to always have to have at least one tenancy relations officer,” Mr Bates says.

“And given that there are loads of ways to impose fines on landlords and keep the money, you should be able to have this relatively self-funding.”

But he adds that the bill is “broadly good”, and “gives much stronger security of tenure with provision of Section 21”.