Residential change comes – eventually

As the saying goes, “change comes eventually” – and the social and private rented sector is not immune. Over the past 50 years, governments of all hues have implemented legislative reforms to stimulate, liberalise and regulate the sector. These changes have altered the relationship between residential landlords and tenants. In some instances, they have also directly impacted on the availability of housing stock in both the social and private rented sector. The end of no-fault evictions Under the Conservative government’s flagship new deal for renting and its levelling-up agenda, the promise of further root-and-branch reform to the sector has continued. The first ripples of change occurred in April 2019, when the then-secretary of state for housing, communities and local government, James Brokenshire, announced that the colloquially termed “no-fault” evictions under section 21 of the Housing Act 1988 would be abolished. The policy had previously been championed by the opposition Labour party, but its adoption as government policy was seismic. Following a period of consultation, the abolition of no-fault evictions made its way into the government’s Renters Reform Bill, which is due to form part of the government’s legislative programme for this parliamentary year.  It is hoped the abolition of no-fault evictions will give some residential tenants greater security of tenure. Landlords will only be able to obtain possession using the procedure under section 8 of the 1988 Act and relying on one or more of the grounds set out in schedule 2 to the 1988 Act. To ensure that the pendulum swings as evenly as possible, the government has also promised to introduce new mandatory grounds for possession. The new grounds will be designed to enable landlords to easily evict tenants who commit antisocial behaviour and repeatedly fall into substantial rent arrears. The abolishing of no-fault evictions is commendable. Yet I appreciate that the proposal may have unintended consequences; namely, encouraging some buy-to-let landlords to exit the market. The perception among many residential landlords is that no-fault eviction offers a faster and more cost-effective procedure for recovering possession of their properties. If the government fails to streamline the section 8 possession procedure and, more importantly, invest in the court system to ensure that claims for possession and execution of warrants are dealt with expediently, the abolition of no-fault evictions could prove to be a double-edged sword. Affordable homes in an unaffordable age The cost-of-living crisis, fuelled in part by the rise in energy prices, has made the provision of decent and affordable homes an even more important target. Encouragingly, one of the reform successes in the social and private rented sector has been the improvement in decent home standards over the past decade.  The Decent Home Standard initiative was first introduced by the Labour government of Tony Blair to ensure that, by 2010, dwellings in the social rented sector met the prescribed standards. In its white paper, A Fairer Private Rented Sector, the current government has promised to extend the Decent Home Standard to the private rented sector to ensure that the number of non-decent homes is halved by 2030. The definition of a decent home is a dwelling-house that (a) meets the current statutory minimum standard for housing (namely, a home without a serious category 1 hazard); (b) is in a reasonable state of repair; (c) has reasonably modern facilities and services; and (d) provides a reasonable degree of thermal comfort through efficient insulation and heating. The English Housing Survey 2009-2010 found 23% of dwellings in the social rented sector were classed as non-decent. This figure was worse in the private rented sector, where 31% of dwellings were found to be non-decent. The landscape had markedly improved by the time of the English Housing Survey 2019-2020, where 12% of dwellings in the social rented sector were found to be non-decent and 23% in the private rented sector. The legislative changes that have brought about improvements in decent home standards include the Homes (Fitness for Human Habitation) Act 2018, which came into force in March 2019. Under the 2018 Act, both social and private landlords are required to ensure that dwellings let for a period of less than seven years are fit for human habitation not only at the start of the tenancy, but also throughout its duration. Further, the Energy Efficiency (Private Rented Property (England and Wales) Regulations 2015 introduced Minimum Energy Efficiency Standards. Since 1 April 2020, all properties let under an assured or regulated tenancy agreement must meet a minimum energy performance certificate rating of band E, unless an exemption has been obtained. Any rating less than band E is deemed to be substandard and the property cannot be let. Interestingly, in its white paper the government has also touted the idea of extending the rent repayment order regime, to cover repayment for non-decent homes. The current use of RROs is primarily for rogue landlords who commit housing-related offences, such as the control or management of an unlicensed house in multiple occupation or for the unlawful eviction or harassment of tenants. Average rents in England are on the increase. The English Housing Survey 2020-2021 statistics revealed tenants in the private rented sector spent on average 31% of their income on rent. Tenants in the social rented sector spent on average 27% of their income on rent. The reality is that, without an increase in the residential housing stock, the basic economic problem of scarcity will continue to push up rents in the social and private housing sector. The current government, in its Levelling up the United Kingdom white paper, has set ambitious targets for the building of 300,000 new homes per year in England, including the provision of 180,000 affordable homes and more social housing. Delivering on promises With the festive season not too far away, I have an early wishlist for Father Christmas. The first item would be for the government to make good on its promise to build more homes, and in particular social housing – this would represent a true phoenix rising from the ashes. The million-dollar question is – how can this be achieved? In my opinion, the starting point is to empower local authorities to take up the baton to once again build social housing on a large scale.  The means of financing this, especially in the current climate, is not easy. Yet, the lifting of borrowing caps on local authorities has been a step in the right direction. Further, the provision of increased grants from central government to local authorities would also help. Lastly, a proposal suggested by some housing think-tanks, which in my opinion would assist in reducing build costs, involves an amendment to section 14 of the Land Compensation Act 1961, to remove the payment of “hope value” to landowners when land is purchased by local authorities with the aim of building social housing. The second wish would be for the policy, first introduced under the government of David Cameron in 2015 and reintroduced by Boris Johnson during this government, to extend the right to buy to tenants in housing association properties to be dropped definitively. Change is coming for the social and private rented sector. Yet, as with all change, only through the prism of time can its success or otherwise be measured. Elizabeth Dwomoh is a barrister at Lamb Chambers Image © Gerard Lacz/Shutterstock