What is being done to fix the UK's rent crisis?
BY Ned Browne
20th Mar 2024 Property
2 min read
Between bidding for eye-watering rents, strict tenancy agreements and landlords selling up, the UK's rent crisis is acute—could new reforms finally fix it?
An industry-wide renting crisis
In recent years, average rents have skyrocketed and competition for rental properties in some sectors has become a bun fight. Group viewings have become the norm, and some renters have been offering to pay a year’s rent in advance just to secure a place to live.
On the flipside, landlords have exited the market in droves as increased regulations, rising tax liabilities, a flat-lining market, and higher interest rates have turned once profitable businesses into loss-making enterprises.
Acts of parliament
New government reforms could outlaw no-fault evictions
The current state of the housing market is definitely a vote loser. Could reforms make it a vote winner? According to the latest government figures there are 11 million private renters and 2.3 million landlords in England alone.
The Renters (Reform) Bill aims to make the market work for both buyers (renters) and sellers (landlords). The bill was first introduced to parliament in May 2023 and has been in the Committee stage since November 2023.
Early in February 2024, Housing Secretary Michael Gove told the BBC that he will outlaw Section 21 "no fault" evictions, a key part of the legislation, before the looming general election, which has to take place before the end of January 2025.
This would indicate that the government is keen to push through this legislation in the coming months. But will it work?
What is being proposed?
- The cornerstone of the legislation is to abolish section 21 "no fault" evictions and move to a simpler tenancy structure where all assured tenancies are periodic. In other words, all tenancies would have no fixed end date. This would enable tenants to, in the words of the government, “challenge poor practice and unfair rent increases without fear of eviction”.
- To balance this, the government has promised to introduce more comprehensive possession grounds so landlords can still recover their property. Few details of these proposals have been made public as yet—watch this space.
- Tenants will also be able to appeal excessively above-market rents “which are purely designed to force them out”. Landlords will still be able to increase rents to market price for their properties. However, an independent tribunal will be able to make a judgement on this, if needed.
- There is also a plan to create a Private Rented Sector Ombudsman, which would “provide fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system”.
- In addition, the government will set up a Privately Rented Property Portal which will help landlords understand their legal obligations and provide better information to tenants to make informed decisions when entering into a tenancy agreement.
Pets not at home
Landlords could require pet insurance for tenants looking to keep pets under new legislation
It’s reckoned that almost 60 per cent households own a pet, but some landlords have, historically, not allowed tenants to keep pets at their properties.
However, the new legislation will give tenants the right to request permission to keep a pet in the property, which the landlord “must consider and cannot unreasonably refuse”.
To support this, landlords will be able to require pet insurance to cover any damage to their property.
The verdict
Overall, should key parts of the bill become law, this could provide a much-needed shot-in-the-arm for this sector. But, of course, the devil is in the details—and this is where things will get interesting.
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