Rumours that the Renters Reform Bill might not survive the parliamentary session due to end on 7 November were finally ended when the Bill received its second reading on 23 October. At the same time the Government released its response to the Housing Select Committee’s report on the Bill published nearly 10 months earlier in January 2023.
The Renters Reform Bill introduces periodic ongoing tenancies that can be ended by the tenant with two months’ notice, or by the landlord through use of Section 8, much more likely to result in court action. There were three areas of the Select Committee report that were of particular interest to landlord and investor communities. Firstly, the Select Committee had proposed that fixed terms should be allowed for all student tenancies, not just those in purpose-built student accommodation as proposed by the Bill. Secondly, Committee Chair and Labour MP Clive Betts expressed the Committee’s concern at the abolition of Section 21 – so-called ‘no fault’ evictions – before reforms to clear the court back log and improve efficiency are introduced. Thirdly, in a first acknowledgement by a parliamentary body on the impact of section 24 tax changes, the report proposed a review of taxation for “smaller landlords.”
On students, the government has listened and said that it will introduce a new ground for possession “that will facilitate the yearly cycle of short-term student tenancies.” Universities across England breathed a collective sigh of relief at these proposed measures, which as they stood threatened an exodus of student landlords at a time when student numbers are growing. There is as yet no detail beyond the announcement, only questions about how the ground might work. How will a “short term student tenancy” be defined? A new ground for possession implies court action, so just how onerous will this new system be? It could rely heavily on students vacating when they are supposed to and just one sharer staying on could result in lengthy section 8 court proceedings.
The second surprise announcement from the Government is that the abolition of section 21 will be delayed “until we [the Government] judge sufficient progress has been made to improve the courts. That means we will not proceed with the abolition of section 21, until reforms to the justice system are in place.”
The Government’s aim is to “digitise more of the process to make it simpler for landlords to use.” But the key issue will be just how many cases result in a court hearing and the capacity of a system which is not known for its thirst for modernisation. The Government acknowledges problems in recruitment and retention of bailiffs and wants more cases to be resolved in mediation to reduce the need for court hearings.
