Weekly landlord news digest: Issue 28

Hamilton Fraser Total Landlord Insurance’s weekly news round-up brings you the latest industry highlights and talking points.

This week, as Boris Johnson became the UK’s new Prime Minister, he didn’t waste time in beginning the process of forming his government. Robert Jenrick was named as the Secretary of State for Housing, Communities and Local Government as part of a cabinet reshuffle, replacing the previous incumbent, James Brokenshire. It is the first cabinet position held by 37-year-old Mr Jenrick.

Prior to his departure on Wednesday, Brokenshire had announced two new consultations earlier in the week – one to decide the scope of scrapping Section 21 no fault evictions and another to allow tenants access to a database of rogue landlords which would share their criminal convictions with tenants.

Other news this week includes this month’s official rent data, the launch of a new Eco Website for landlords and an extreme case of bad tenant behaviour.

 

Scrapping Section 21 may see two year buy to let sale ban

A new law scrapping Section 21 no-fault evictions may include a ban on landlords selling a rented home for two years after a tenant has moved in. The intention would be to give tenants more security in their homes.

Under the new law, Section 21 would be abolished, but landlords would still be allowed to take possession of a rented home if they or a close relative plans on moving in or if the property is to be sold.

The 75-page consultation paper New Deal for Renting explains the options and is asking landlords, tenants and other property professionals to tell the government how they think the law should change.

Brokenshire, the outgoing Secretary of State for Housing, considers that doing away with Section 21 will allow rolling tenancy agreements to replace assured shorthold tenancy contracts.

“Many landlords have the unilateral power to evict a tenant from their home without reason,” says the consultation paper.

“This creates an unequal dynamic that undermines the relationship between landlords and tenants, and potentially erodes trust between the two parties. Landlords who evict tenants for rent arrears or anti-social behaviour using a ‘no fault’ ground mask valid reasons for eviction, which fuels a culture of mistrust and uncertainty.

“The ability to use Section 21 rests in the assured shorthold tenancies regime. The government is of the view that, with Section 21 removed, the assured shorthold regime no longer serves a practical purpose.”

The consultation is open until 12 October 2019.

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Government consults on widening access for rogue landlords’ database

Rogue landlords convicted of serious housing offences may be named and shamed on an online database.

The Outgoing Secretary of State for Housing, Communities and Local Government, James Brokenshire, is supporting a move that lets tenants look up any convictions a landlord or letting agent may have for breaking housing laws, for example unfairly harassing tenants or breaching licensing conditions.

A law change would be required in order to allow tenants open access to the database.

Brokenshire proposed the new law in a consultation paper Rogue landlord database reform.

“This database has the potential to ensure that poor quality homes across the country are improved and the worst landlords are banned and it is right that we unlock this crucial information for new and prospective tenants,” said Brokenshire.

“Landlords should be in no doubt that they must provide decent homes or face the consequences.”

The National Landlords Association (NLA) welcomes the opportunity for greater transparency but it believes that local authorities should be given more support to supplement their enforcement activity.

“It’s all well and good to open the database up to tenants, but if local authorities aren’t using the powers they have to identify and enforce against these landlords, it’s not really going to be of much use to anyone. The inability of local authorities to enforce against bad practice is the main issue facing the private rented sector (PRS). Instead of spending time and money on a consultation, the Government would be better off giving that money to local authorities for the sole purpose of tackling criminal landlords.”

Chris Norris, Director of Policy and Practice at the NLA

What can landlords do?

Landlords can make an individual response to the consultation. It is available online from the Ministry of Housing, Communities and Local Government (MHCLG) website.

The consultation is open until 12 October 2019.

Landlords see disappointing rent rises

Rent rises seem to have hit a wall in June, according to new data.

Although the UK annual increase was 1.3 per cent in June, the figure was the same as for May, says the Office for National Statistics (ONS), the government’s official agency.

The rise for England was the same as the UK increase.

In Wales, rents rose at 1.1 per cent – and have stayed the same since February – while Scotland showed a marginal 0.1 per cent increase from 0.8 per cent in May to 0.9 per cent in June.

“Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period,” says the ONS report.

“Rental growth has started to pick up since the end of 2018, driven by strengthening growth in London.”

In financial terms, a tenant paying £500 rent in June 2018 would pay £506.50 in June 2019.

London rents are standing still as well, at 0.9 per cent for May and June, but the figure is the highest rate since September 2017.