The King’s Speech heralded a new bill for the Private Rented Sector. It is no longer a Renters Reform Bill but a Renters Rights Bill.
Which indicates that it will be more focused on renters’ rights than landlords’ rights.
So how can landlords prepare for this? Apart from evicting your tenants and selling up.
Here are my three top tips:
1 Ensure that your rent is a market rent
It is likely that there will be some kind of rent regulation. Labour have in the past ruled out rent control (which has been proved to be ineffective). However, the King’s Speech briefing notes indicate that tenants will be given the right to challenge rent increases.
This is something tenants can do now, if their rent is increased by the notice procedure set out in s13 of the Housing Act 1988.
The Renters Reform Bill restricted landlords’ right to increase rent to this procedure. It is likely that the Renters Rights Bill will do the same. There may also be power given, maybe on a local basis, to Local Authorities to limit rent increases in some way.
Many landlords do not do regular rent increases and allow rent to remain the same for long periods of time. With irregular large increases if they find that the rent is becoming uneconomic.
However, with the new regime, it will be important that your rent is either at, or maybe very slightly below, market rent level. As large increases may become impossible (plus they are often unaffordable for tenants and feed the narrative of ‘greedy landlords’).
So if your rent is massively below market rent, you should be looking to increase it to this level. Although preferably not all at once.
You should then do small regular rent increases annually or when permitted by the new legislation. As, if the law is changed as anticipated, you will only be able to increase rent once a year.
If you keep your rent at or just below the market rent and only do modest annual increases, your rent should be unchallengeable. Plus, small regular increases are much easier for your tenants to manage.
2. Make sure your property is in good condition
The majority of private sector landlords are proud of their properties and take care to keep them in good nick. However, it has to be said that there is a substantial minority of landlords whose properties are in a poor or shocking state.
It is only right that these landlords should be made to improve their property condition. This will also benefit the good landlords as they will be less likely to be tainted by association.
We are told that ‘Awaabs law’, which requires landlords to deal with complaints about property condition (particularly as regards damp and mould issues) within a strict time scale, will be extended to the private sector.
I suspect that Local Authorities will be given additional enforcement powers and tenants greater rights to claim against landlords. Remember that once the act is in force, they will no longer be vulnerable to no-fault evictions. As section 21 will be gone.
So, you should take steps to ensure that your property is in good condition. And work to keep it that way.
Regular inspections are the best way to keep your property under review. Then you can implement timely repair and improvement work before it becomes expensive.
Landlords who are worried about property inspections will find our Property Inspection Kit helpful.
3. Be very careful who you accept as tenants
Remember that when section 21 goes, you will, if you wish to evict your tenants, be left with the section 8 notice grounds for possession.
It may not be too difficult to evict for rent arrears (always assuming this remains a mandatory ground). However, evicting for anti-social behavour is difficult, long-winded, and (if you use solicitors) expensive.
So you need to take care that you avoid any tenants who are likely to exhibit anti-social behavour or are otherwise likely to be undesirable tenants. Better to leave the property empty for a while until you find someone more suitable.
So make sure that you check all applicants very carefully not forgetting to get credit referencing done.
So long as you avoid unlawful discrimination and indirect discrimination you can choose who you like as tenants. So don’t feel under pressure to accept someone you feel uneasy about.
We have an article here which can help plus detailed guidance on checking tenants is available for my Landlord Law members.
And finally
At the time of writing, we don’t know what the Renters Rights Bill will contain, although we have a good idea of some of its likely provisions.
However, I am pretty sure that taking these three precautions will help you with compliance and help you avoid problems.