The Renters (Reform) Bill has now completed its committee stage, and politicians have added some key amendments. How has it changed since its second reading?
Decent homes
The committee amended the bill to pave the way for a private rented sector Decent Homes Standard, but so far there are no details on what that would look like. The amendment only allows the Secretary of State to set standards for privately rented homes. DLUHC has already held several roundtables with sector stakeholders to help with their development, so it is possible that a set of standards could be revealed fairly soon. They are likely to be similar to the ones used in the social rented sector.
Student tenancies
Student landlords won a partial victory. The unamended bill would have made most tenancies open-ended, putting student landlords at risk of not being able to get their properties back at the end of the academic year. Politicians have now added a new ground of possession to take back a property at the end of the year to let it to students again. This puts them on a more level playing field with purpose-built student accommodation providers, who will still be allowed to let to students on a fixed-term basis.
But the new possession ground only applies to HMOs and not to properties housing one or two individual students. It will also only be valid when applied in cases concerning full-time students in their final academic term (June to September), so unless the court system speeds up dramatically, it could still be difficult to recover homes in time for the next year.
It also wouldn’t allow landlords to evict students and bring in non-student tenants if they want to exit the student rental market.
Discrimination
As promised, the government will additionally ban landlords and agents from discriminating against tenants who have children or receive benefits. For example, this means that they will not be able to specify “No DSS” in advertisements, bar such tenants from viewing properties, or refuse to enter tenancy agreements with them on a blanket basis.
Currently, landlords may be required to ban tenants with children or receiving benefits because of the terms of their insurance – either their own policy or a policy held by their superior landlord in leasehold properties. Tenants who receive benefits are seen as higher risk and may only be covered by specialist policies. However, under the amendment, insurance policy or mortgage terms that require landlords to ban these tenants will no longer be binding for contracts started or extended after the bill is passed.
Rent Repayment Orders
As part of the bill, the government will also overhaul Rent Repayment Orders (RROs). This will result in landlords paying more money to tenants if they breach certain rules, such as running an unlicensed HMO, failing to comply with an improvement notice, or illegally evicting tenants.
In the first change, the maximum RRO has been increased from an amount equal to 12 months of rent to 24 months of rent. Secondly, landlords and agents can also be made to repay rent if they knowingly submit false information to the new private rented sector portal.
Additionally, the bill will overturn the Supreme Court’s decision that tenants cannot seek RROs against a superior landlord. Tenants who rent from a rent-to-rent provider will in such cases be able to reclaim rent from the property owner. And the First-tier Tribunal will be able to split liability between the rent-to-rent provider and the superior landlord as it sees fit, or declare them jointly and severally liable for the repayment.
Opposition amendments
The government wasn't alone in introducing amendments to the Renters (Reform) Bill. Labour MPs on the committee tabled 26 of their own. While none made it into the legislation, they give some clues as to what a Labour government could do if they win a general election next year.
Among other changes, the opposition wanted to increase the fines that local authorities can hand to landlords, stop evictions if the tenant’s deposit is not protected, and require all landlords to join a redress scheme.
The party also introduced an amendment to stop landlords and agents from “inviting or encouraging bids” on rental properties – although with homes in short supply, tenants may not need any encouragement to offer a higher rent.
And while it wasn’t proposed as an amendment, senior Labour MP and Levelling Up, Housing and Communities Committee chair Clive Betts has proposed that the government seize properties from landlords who repeatedly break rental rules.
What next?
The Renters (Reform) Bill is now in the report stage, in which the whole House of Commons can debate it and consider further amendments. Industry groups will continue to lobby the government, and have already pointed out further changes that could be made. After the report stage, the bill will receive its third reading in the House of Commons, at which point it will be voted on by MPs and (if it passes) passed on to the House of Lords.
Other housing policy headlines
Pressure grows for ban on new leasehold flats – BBC
Record migration fuelling Britain’s rental crisis, warns Zoopla chief – Property Industry Eye
HMRC targeting ‘under declaring’ limited company landlords – LandlordZONE
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