Tackling Rental Reform

Posted by British Property Federation on 16th April 2021 -

Successive Governments have been promising rental reform for some time now but have been thwarted by events. If the Labour Party had won the general election in 2015 it would have reformed residential tenancies, probably moving to a 3-year fixed-term tenancy, but the Party lost that election. In the 2017 election, Jeremy Corbyn did rather better than expected and although defeated, much was made of his ability to reach out to younger voters, who amongst other things, were unhappy with their housing situations.  Leading a minority Government, the May administration knew it could face an election at any time and it wanted to appeal to the same voters who had flocked to Corbyn, so it rushed through a policy proposal that would have ended section 21 no fault evictions, whilst leaving much of the rest of the 1988 Housing Act in place. Such an approach was driven in part by the scarcity of Parliamentary time in a world where Brexit was all-consuming. The current Government therefore inherited a position of tenure reform, which it embraced, and that was confirmed in the December 2019 Queen’s Speech with a proposed Renters’ Reform Bill.

Thus far, the pandemic has put paid to any plans to bring a Renters’ Reform Bill forward, but the intent remains strong and with all the main political parties committed to reform it is not a case of if but when reform will take place. Rental reform in the devolved nations, most notably Scotland, has perhaps also made politicians less fearful of intervening in a market, which history tells us such intervention does not always lead to good outcomes.

And whilst politicians have contemplated reform, the market has not stood still. Build-to-Rent has introduced lots of innovation for its customers, no fees - long before bans came into effect, longer-term tenancies of typically three years, and no deposits for some providers. All this illustrates that larger institutional landlords are embracing and often leading change, but that change must be practicable and workable.

In that regard, there has not been a convincing narrative from any political party yet that will comfort landlords that they will be able to protect their investments and have access to their property in the rare circumstances when they need to. Grounds for possession will need to be reformed and access to justice via the Courts far more efficient if rental reform is going to work for landlords. Although there is much to laud in the Scottish Government’s approach to reform the disappointment so far, even pre-dating current pandemic conditions, has been the new housing tribunal, which has not been able to cope with its volume of work, and hence has not been speedy, or delivered the less court-like and more informal atmosphere that it was meant to herald.

The pandemic south of the border has also led to a huge backlog of cases for the courts, that will take many months to clear. If tenure reform is to be palatable to landlords however, efficient access to justice, and therefore fairness, will need to be improved. The Government has offered the prospect of housing courts, and whilst greater specialism will be welcome, it is not sufficient. Only full digitalisation of the court process will deliver a system that can deal with the volumes tenure reform is likely to generate. Will Government be up for making that sort of commitment to invest? Will MHCLG and the Ministry of Justice be sufficiently joined up to deliver comprehensive reform? Only time will tell, but in an age where anyone can track their dinner or shopping half-way across the country, there is really no excuse for a court system that still relies on paper applications and phone calls to track cases.

To help inform our position on tenure reform the BPF has a working group. It is issuing a series of working papers to glean the views of our wider membership. Please consult the first two on grounds for possession and court processes -and let us have your views?