The government seem to be giving out mixed messages in this last week about the long-awaited Renters’ Reform Bill. This was promised in 2019, when the government announced it would be introduced to the House of Commons during 2020, but with Covid, and until recently Brexit, taking up so much of ministers’ time, it has fallen through the gaps, but seems as if it may now be back in the government’s sightlines.
Kelly Tolhurst, a minister at the Ministry of Housing, Communities and Local Government, answered a question in the Commons last week, about the security of tenants in the private rental sector. Her announcement – “We will introduce a renters’ reform Bill very soon,” has started a flood of speculation over the various elements that may be contained in it.
We know the government want to continue with the abolishment of the “no-fault” Section 21 evictions. A Section 21 Notice is used by landlords in England & Wales, when they want to evict tenants and gain possession of a property, at the end of a fixed term assured shorthold tenancy. This issue is very much on the agenda, as the government have recently extended the ban on serving notices for another 6 weeks. The unfortunate consequence of this blanket ban, is that there is no distinction between giving notice and eviction. At present, at least 6 months’ notice needs to be given to a tenant, and the backlog of Section 21 evictions is unprecedented. If the government scrap Section 21 and do not replace it with anything, landlords will only have Section 8 to use, which is meant for when the tenant has breached the agreement, or fallen into rent arrears.
“Transferable lifetime deposits” is another element expected to be included in the bill. Also known as “deposit passporting,” or “transferable rental deposits”; this new system will mean that renters will not have to save for a new deposit each time they move, but instead their deposit will be transferred from property to property. Details on how this will work in practice have not been made available yet. For renters, the current problem, is that to move to a new place, they need to find a deposit to lodge with the new landlord whilst their old deposit is still tied up with the old landlord. For landlords, the problems include how they make a deduction, to cover the cost of damage caused by the outgoing tenant if the deposit is simply transferred. One option for this, has been the suggestion that each tenancy will have a zero deposit insurance policy, which a landlord can claim against.
Once the bill appears in the Commons for debate, it will be interesting to see how its journey progresses, and the final outcome.