By The government has launched a 12-week consultation, to set out how changes to tenancy law in England would work in practice, as one of the final moves made by Theresa May, before leaving office this month. ARLA Propertymark has also revealed it is now an active participant in the consultation.
Mrs May’s government proposed the scrappage of Section 21 eviction notices, which are used by landlords as part of no-fault evictions. However, Mrs May faced criticism from landlords and associations, who believed the move would open the door to indefinite tenancies.
The government argued that it wished to ensure that evictions would be carried out, only if landlords could provide a good reason, without subjecting tenants to evictions at short notice.
Other reforms proposed
As well as consulting on changes regarding Section 21, the government consultation on tenancy reform will focus on proposals such as amending Section 8 eviction procedures, allowing landlords to have a smoother process, when seeking repossession through the courts.
The consultation is to be carried out in a non-retrospective fashion, with existing tenancies remaining unaffected by current proposals. The Ministry of Housing, Communities and Local Government (MHCLG) intends to work with the Ministry of Justice, concerning reforms involving court procedures.
This departmental collaboration is understood to be in place to ensure that the court process for repossessions will be increasingly digitalised and that procedures can be run at a quicker pace.
Impact of proposals
ARLA Propertymark was keen to stress that the effects of recent changes, especially the recent tenant fees ban, were not yet being fully felt, and that the government must not underestimate the potential impact of its tenancy reform proposals on landlords.
David Cox, chief executive of ARLA Propertymark, explained: “Strengthening Section 8 is essential, and it must move to a system of mandatory grounds with anti-social behaviour and rent arrears being top of the priority list.”
Mr Cox added that the private rented sector (PRS) had succeeded greatly, specifically because there was great flexibility within the PRS market for landlords and tenants alike. ARLA Propertymark revealed it was already engaged with the government in the consultation.
It was specifically hoping to ensure that barriers to longer tenancies could be overcome, and that there could be sufficient evidence presented, when it comes to understanding and seeking to improve the experience of people using the courts in property cases.
Mr Cox looked to the tenancy reform consultation, saying: “The government must make changes based on tenant behaviour, not just demographic change amongst renters. Reform to the justice system is vital, and digitalisation, privatising bailiffs and investing to ensure a properly functioning system, must be advanced in order that confidence amongst landlords and within the sector is maintained.”
RANT OF THE DAY The Conservative party or as I now refer to them the cons. They conned investors to invest is the private rented sector following the earlier political disaster of the Rent Act 1977. George Brown had raped the pension scheme discouraging people investing in pensions. The Insurance companies rip off pension scheme with extremely low and even negative returns driving people to invest elsewhere, housing being one choice. George Osbourne then hit investors with damaging taxes which encouraged many landlords to transfer their property into companies with possible CGT implications.
Further targeting individual landlords with a discriminatory higher CGT rates. The abolition of fees so landlord pay to check out tenants and setting up tenancies etc run up landlords costs and increase rent.
Now abolition of S21 where landlords might (if they are lucky) be able get possession on ground they want their property back for themselves of their family. It could, I guess, be bad lack if you transferred your property into a company to get around s24 as it would be doubtful you could claim it to be family occupation if you want it back!!! if the property is in a company name?
It appears to me ( a personal view) that the conservatives have schemed, plotted and planned for the private investors to be forced to provide a social housing market via the back door. The alternative is to have Corbyn who has already suggested rent control and trying to take over housing from the PRS; so not just kill you but hang draw and quarter you!
This is how I see the politicians and the housing market. With the recent history of the Conservative party can they ever be trusted again? Politicians now actively fight against democracy and are self serving. Brokenshire told me that the Abolition of S21 would be subject to consultation – misleading.
Yes there is a consultation but the abolition will go ahead come what may. The consultation is only on the detail NOT THE ABOLITION.
It is perfectly possible to get out of AST lettings and convert to lodgers.
Convert the mortgage to a residential one and take in LODGERS.
No S24 or S21 etc required.
You only need to attend a residential property once per month and that is just to satisfy residential insurance requirements.
No need to stay overnight.
In practice you would go once per week to collect mail and deal with chores which always need attending to.
Plus you catch up with the lodgers to see everything is OK.
Currently it is impossible for HMRC to detect how much cash rent a live-in LL receives.
So the Room For Rent Allowance of £7500 is a voluntary cap on rental income.
Govt should really just remove the RFRA and abolish all tax on lodger income.
It is ignored anyway but by making it public policy it would encourage many LL out of AST lettings into lodger lettings.
It would cause many LL to sell BTL properties and reduce to just a few Residential properties.
You can have as many Residential properties as you like; all of which you may have lodgers.
There are no regulations as to how many days you spend at your Residential properties.
1 day at each per tax year is sufficient.
Obviously having lodgers means not being able to let to family units as you earn more by charging lodgers per room.
So to avoid HMO Mandatory Licensing you could have 3 Lodgers plus you making no more than 4 occupiers.
So only a 4 bed house is needed.
As AST HMO are sold off or converted back to family housing the demand for rooms will remain the same but with no supply.
Spare rooms in residential property will answer that requirement.
So the LL business will just morph into 4 bed residential properties.
Where this leaves families who knows and who cares.
It won’t be of any concern to a live-in LL with multiple residential properties.
The AST game has had it.
Of course the beauty of a lodger is they have extremely limited tenure rights.
If the LL wishes a lodger to go there is nothing the lodger can do to prevent this.
So lodgers would usually behave themselves knowing they could be booted out very quickly by the live-in LL.