Court reform critical to success of Renters’ Rights Bill, warn industry chiefs

Real estate bosses have restated the need for court reform alongside the Renters’ Rights Bill introduced to parliament today by housing secretary Angela Rayner. The Bill proposes banning section 21 “no-fault” evictions for new and existing tenancies, extending Awaab’s Law into the private rented sector and ending blanket bans for those on benefits or with children.  Rayner said: “Renters have been let down for too long and too many are stuck in disgraceful conditions, powerless to act because of the threat of a retaliatory eviction hanging over them.  “Most landlords act in a responsible way, but a small number of unscrupulous ones are tarnishing the reputation of the whole sector by making the most of the housing crisis and forcing tenants into bidding wars. There can be no more dither and delay. We must overhaul renting and rebalance the relationship between tenant and landlord.” Shockwaves Many in the sector accepted the introduction of the “long promised” Bill and said it “will lead to a better rental sector”. Ian Fletcher, director of policy for real estate at the British Property Federation, said: “Rental reform has been long promised and, like the new government, we want to see it done. Much of the provisions of the Renters’ Rights Bill we will support because they will lead to a better rental sector.” Fletcher said the BPF’s “primary concern” remains that the courts will struggle to handle an increased workload and that court improvements will be necessary. “We can see why the new government wants to inject new pace into reform and it has made some reassuring commitments to continue to improve the courts,” he added. “Without court reform and improvement, the new system won’t work well and deliver fair access to justice.” Scott Goldstein, partner and property disputes specialist at law firm Payne Hicks Beach, seconded Fletcher’s concerns about the abolition of section 21 placing more pressure on the court system. He said: “The plan to abolish section 21 no-fault evictions for existing tenancies as well as new tenancies will send a shockwave through the sector. It shows that the new government means business. Expect a huge surge in section 21 notices served in the time before the legislation takes effect, and a bulge in possession proceedings two months later when the notices expire. “The county court system is completely broken. It now takes many weeks to process claims. We must hope that the government invests in the courts to cope with the expected influx in new claims.” Database plans Helen Gordon, chief executive of Grainger, warned that the government should ensure that the Bill does not “undermine their ambitions for continued investment into the housing market”. She said: “The underlying pressures facing the housing sector in the UK are due to an undersupply of homes of all tenures, and it is essential that the government ensures these reforms do not undermine their ambitions for continued investment into the housing market and supply of new homes. We are pleased that today’s proposals do not include rent controls, a recognition that they are more damaging than helpful for renters in the long-run.” Foxtons chief executive Guy Gittins warned that legislative changes can “complicate investment and reduce buy-to-let profitability”, potentially deterring landlords from entering the sector and inadvertently leading to a reduced level of quality rental stock and higher rents. “It remains to be seen whether the court system is adequately prepared to deal with the ban on section 21 evictions,” he added. Government plans for a private rented sector database would help landlords understand their compliance obligations and provide tenants with the information they need to make informed choices about new tenancies. It will also allow councils to focus enforcement where it is needed most.  Fletcher said: “A landlord register is something we have campaigned for since 2007. Responsible landlords will also welcome the continued commitment to a private rented sector ombudsman. “Overall, we believe the rented sectors can make an important contribution to the expansion of housing supply. It is therefore reassuring to see the Bill contains nothing that resembles rent controls, and an appreciation that stability, certainty and clarity are the cornerstones of increased investment in the sector.” Image © Toby Shepheard/Story Picture Agency/Shutterstock