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Renters’ Rights Bill latest: industry bodies object to amendment

Yesterday, the Renters’ Rights Bill was debated in its third reading in the House of Commons, but while some support the proposed legislation, there are concerns among industry insiders.

On 14th January, the Renters’ Rights Bill received its report stage and third reading, where the components and amendments to the Bill were debated, and new amendments could be made before it progresses to the next stage.

The Bill has been a divisive one for the housing industry, with some – such as homelessness charity Shelter – arguing that the legislative changes are needed to protect tenants, while others are concerned it could have a negative impact on the private rented sector, leading to more hardship for tenants in the long run despite its objectives to the contrary.

Some of the biggest changes within the proposed legislation include changes to eviction rules, removing discrimination against tenants on benefits and with pets, and doing away with assured shorthold tenancy agreements in favour of periodic tenancies. The finer details of all aspects of the Bill have yet to be determined.

Yesterday, one of the major topics up for debate was the government’s plans to limit the amount of rent landlords can take in advance of a tenancy, which is an additional amendment to the Renters’ Rights Bill.

Rent up front: the debate

The National Residential Landlords Association (NRLA) is one of the industry bodies leading the objection to banning landlords from taking rent up front, alongside a number of other organisations from the UK rental sector.

It has flagged “serious concerns” with the government that to do so would cause “significant problems for landlords and tenants, making it harder for some groups to access homes to rent”.

In some instances, landlords ask for rent in advance when tenants have a poor credit history or a variable income. Taking rent ahead of time (such as three months’ rent or six months’ rent in advance) can mitigate the risk for the landlord, while allowing them to offer accommodation to someone who may not be seen as a reliable tenant.

The argument is that these tenants may otherwise struggle to find landlords that will take them, and therefore banning this practice through the Renters’ Rights Bill would ultimately be detrimental to tenants.

The coalition of industry bodies, made up of the NRLA alongside British Property Federation, Propertymark, Goodlord, and Leaders Romans Group, said: “We accept that Section 21 repossessions are ending, and support measures to ensure every rental property is of a decent quality.

“However, the Government’s proposed changes risk making access to rented housing harder for the very people we want to support.

“Limiting rent in advance, combined with frozen housing benefit rates and not enough rental housing will make it all but impossible for those with poor or no credit histories in the UK to prove their ability to sustain tenancies.

“These include international students, workers from overseas and those employed on a short-term or variable basis with an income that fluctuates.

“Cutting off any assurance landlords might seek when renting to those who cannot easily prove their ability to afford a tenancy is neither practical nor responsible. Those who will suffer are those most likely to struggle to pass affordability checks.”

Other Renters’ Rights Bill amendments

Also commenting on the proposal in the Renters’ Rights Bill of banning landlords taking rent payments upfront, Sarah Taylor of Excello Law said: “This can leave landlords at risk of unpaid rent.

“However, it is onerous and potentially discriminatory to require large payments of rent upfront. Tenants may be able to pay their rent regularly but may not be able to save up a significant amount of rent to pay up front. This proposal should assist in making rental accommodation accessible. It highlights the difficulties in trying to balance the interests of landlords and tenants in the legislation.”

According to the parliamentary paper, the amendments tabled for the report stage of the Renters’ Rights Bill also include:

  • Limit a guarantor’s liability for rent following the death of the tenant
  • Introduce a new ground for possession of alternative accommodation provided during redevelopment

On the first point, Sarah Taylor noted that this seemed “sensible” as it would put the onus on the landlord to recover possession of the property and re-let it as quickly as possible, which is beneficial for both the landlord and the supply of housing in the private rented sector.

On the second, she noted: “There is also a proposal to introduce a new ground for possession of alternative accommodation provided during redevelopment. It will be interesting to see how this is dealt with practically if the amendment is agreed.”

You can keep up to date with any legislative changes or updates, including the latest on the Renters’ Rights Bill, on our UK property news pages here.

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