iHowz view of the proposed Renters’ Rights Bill
iHowz Landlord Association submit this paper with their views on the proposed Renters Right Bill
The iHowz View
Key facts
• The PRS supports over 390,000 jobs across the UK (3)
• Almost a fifth (18.8%) of UK homes are privately rented, as of 2023(4)
• The total economic contribution (GVA) of small and medium landlords in the PRS is £45bn(5)
• private landlords paid around £8.6bn in tax for the 2017/18 tax year(6), with
- £3.8 billion coming from income tax,
- £1.5 billion from capital gains tax, and
- the remainder from SDLT and other taxes
- Income Tax on Rental Income: £5 billion
- Capital Gains Tax: £2 billion
- Stamp Duty Land Tax: £3 billion
- ATED: £500 million
• The latest English Housing Survey (8) found that private renters had lived in their home for 4.3 years on
average. This is up from 4.1 years recorded in the 2017/18 Survey and 3.9 years in the 2016/17 report.
• In 2022-23, 77% of tenancies were ended by the tenant (9)
• Claims to repossessions median timeliness has increased to 23.7 weeks, up from 21.7 weeks in the same
period in 2022 (10)
Additionally:
• 17% of households in England live in social housing (11)
• Total social house building completions were 156,000 in the year to March 2021 (12)
• There were 1.21 million households on local authority waiting lists on 31 March 2022 (13)
iHowz Recommendations
In this paper, iHowz recommends:
1. Courts:- Review the decision to not have specialist Housing Courts.
- Reintroduce the arbitration service introduced during Covid.
- Remove the requirement for an uncontested Ground 8 (rent arrears) case to go to a court hearing by the introduction of an Accelerated Procedure, as currently used for Section 21.
- Make Ground 14a (Section 8) a mandatory clause.
- Allow evidence from affected tenants without the requirement for them to be identified or attend court.
3. No fault given notice:
Amend Section 8 to allow for a no fault given possession notice, subject to:
- A sliding scale of notice depending on the length of tenancy.
- The last two months of the tenancy to be rent-free.
4. Ensure Awaab's Law ensures tenants also take responsibility to use all provided facilities correctly.
5. Allow larger deposits where a tenant requests to keep a pet.
6. Phase in these proposals, with court changes taking priority.
iHowz Background
iHowz has responded to all previous Bills and White Papers on the PRS, and now present our arguments with regards to the potential contents of the Renters Right Bill.
We call on the Government to take an inter-departmental view of the housing crisis, and to add to their Mission Delivery Board(14) so all appropriate Ministries/Departments can be involved.The Proposed Bill
(Based on our understanding of the proposal – see Appendix)
Registration/ombudsman/portal.
Drawing on the success of the two existing Agent Redress Schemes(15) we question the need to start another scheme, when there are two schemes with proven track records, thus reducing the risk of a new scheme.
If a tenant's complaint against a landlord is not upheld and proves to vexatious, there should be financial penalty against the tenant, in the same way as there would be against the landlord.
We would call for the Portal for each property to be accessed via the Unique Property Reference Number (UPRN)(16) and to include:
- EPC (already a public document) *
- Gas Certificate (CP12) *
- Electrical test Certificate (EICR)
- Licensing documents*
- Proof of title
Registration for these schemes should be central.
It should be possible for a member of the public to search for a prosecuted landlord or agent.
All agreements should be in writing
All agreements should be in writing. While not specifically mentioned, we recommend this be included as it is necessary. It is surprising how many agreements are oral, and almost always cause problems in court. The Law Society tried to bring this in over 20 years ago, but the Government of the day were not convinced to implement it.
Rent increases.
Use of a proven process, the Section 13 notice, and use of the First Tier Tribunal (FTT) is sensible to continue. However, we urge more phased resources be put into the FTT before it becomes bogged down, as the court system is now (17).
Non-Discrimination
We do not support discrimination, but we would point out that as a tenancy agreement is a contract with a consumer, such discrimination is already unlawful. However, we welcome these matters being specifically spelled out.
Pet Insurance
The matter of potential damage by pets needs serious thought. In general, pets will tend to cause damage/higher levels of wear and tear to the property, and the landlord would need some kind of protection/cover for this.
Pet insurance in its current form would be unacceptable because:
- Normal cover doesn't include long-term damage due to scratching and urinating.
- Renewal cannot be enforced, as the insurance would be in the tenant's name. Furthermore, the tenant could cancel the insurance at any time without the landlord's knowledge.
- We propose that landlords be able to take an extra deposit where a tenant requests to keep a pet.
Selling/developing the property/moving in
We request that the improvements to Grounds 1 & 6 to allow sale/moving in/redevelopment initially proposed in the Renters' Reform Bill will be included in the new bill.
Property Conditions.
We welcome the suggestion that there must be a stated standard for all non-commercial rental properties, but this must apply to all non-commercial rental property, regardless of ownership.
We believe the current Decent Homes Standard is too vague to be of much use. Unless and until a new Decent Homes Standard is proposed, we cannot support carte-blanche adherence to an unknown Standard.
If a new standard is introduced, coupled with landlord registration, widescale licensing schemes would no longer be required.
Should it be found that wholesale Licensing is necessary, we recommend the excellent scheme in Southampton City be looked at. We can provide more details if necessary.
Awaab's Law.
We agree that all property, whether rented or not, should have minimal danger from mould arising from damp/condensation. However, we question the attitude of always blaming the landlord.
We call for a revised Decent Homes Standard, covering all rental property alike, whether private, social, or council. This would then make it easier for landlords and councils alike to fully understand their responsibilities.
We hope the new Decent Homes Standard will make it clear how to avoid damp from external factors and how to minimize condensation, but it should also make clear that tenants have to take responsibility to use the supplied facilities correctly.
Updates
We call for the publication of updates on:
- HHSRS (Housing, Health, and Safety Rating System)
- MEES (Minimum Energy Efficiency Standard)
- EPC methodology (Energy Performance Certificate)
Needs Urgent Consideration
Controlling Anti-Social Behaviour (ASB).
ASB has been a persistent issue and is on the rise, with public order offences increasing fourfold since2016(18).Local and Central Government would like landlords to be responsible for the ASB of their tenants, but in fact, landlords have no more responsibility than any other member of the public. Especially considering a tenants' right to quiet enjoyment, and the danger of an Illegal eviction.
The landlords must seek to control ASB in their tenants, and be seen to be doing so, but apart from asking their tenant(s) to stop their ASB they can do no more. Only the Police; Councils and large Social Landlords can apply for an order to stop ASB(19).
Government recognised this as such a problem that they issued an Anti-Social Behaviour Action Plan in May 2023(20) proposing several methods to control ASB.
Due to the failings of the existing Section 8, landlords have been using the Section 21 notice to control ASB. The new proposed Section 8 grounds do not go far enough.
We therefore recommend an amendment to Section 8 to allow for a no fault given notice (we have the appropriate wording drawn up by a KC) including a sliding scale notice + 2 month rent free period - providing a more tenant friendly solution, without the need to burden the courts where the tenant consents.
Remove the requirement for an uncontested Ground 8 (rent arrears) case to go to a court hearing by the introduction an Accelerated Procedure, as currently used for Section 21
Courts.
A report from the Law Society, shows that the backlog for all types of cases at court are persisting(21). A large advantage of using the Section 21 was to avoid the need to go to court.Homelessness.
Threatened with the probable loss of the Section 21, and without appropriate improvements in Section 8, many landlords are now being ultra-careful when offering to potential new tenants, especially if they are unable to secure acceptable references, and/or guarantors.
It is iHowz opinion that removing Section 21 without some form of no fault recovery combined with improvements to the possession process, will increase homelessness, not decrease it as claimed by some of the groups representing tenants. (23)
Appendix
Our understanding of the proposed contents of the Renters' Rights Bill
Using Government wording, found in the Background Briefing notes to the Kings Speech, 17th July 2024(23)Purpose: The Renters' Rights Bill aims to provide greater rights and protections to renters in England, addressing issues of insecurity and substandard living conditions.
Key Provisions:
1. Abolishing Section 21 'No Fault' Evictions:
o Ends the practice of evictions without reason, increasing tenant security and stability.
o Introduces clear and expanded grounds for possession, allowing landlords to reclaim properties
when necessary.
2. Strengthening Tenant Rights:
o Empowers tenants to challenge unfair rent increases.
o Prohibits rental bidding wars by landlords and letting agents.
o Grants tenants the right to request pets, with landlords able to request insurance for potential
damage.
3. Improving Housing Standards:
o Applies the Decent Homes Standard to the private rented sector, ensuring homes are safe and
hazard-free.
o Implements 'Awaab's Law,' setting legal expectations for timely repairs of serious hazards.
4. Digital Database and Dispute Resolution:
o Creates a digital database for landlords, tenants, and councils to access key information.
o Introduces a new ombudsman service for fair and binding resolution of disputes, reducing the need
for court proceedings.
5. Anti-Discrimination Measures:
o Makes it illegal for landlords to discriminate against tenants based on receipt of benefits or having
children.
6. Enhanced Enforcement:
o Strengthens local councils' investigatory powers to identify and penalize unscrupulous landlords.
Impact:
• Affects 11 million private tenants, including 1.4 million households with children and 444,000 households with over-65s.
• Addresses the record number of no-fault evictions and rising rental prices.
• Aims to reduce the proportion of income spent on rent and improve the quality of rented homes.
Territorial Extent:
• Applies primarily to England, with certain provisions extending to Wales.
Key Facts given by the Government:
No fault evictions threatened 25,910 households with homelessness in 2023.
- iHowz comment – this equals ¼ % of the 11 million tenants quoted.
- The percentage of landlords reporting rental arrears from tenants was 35% in Q3 2023(24)
- Rent arrears climb 24% year on year(25)
- iHowz comment – 56% of landlords raised rents in 2023 as a direct result of increasing costs(26)
- Average cost of repairs has risen by 4.7% since the start of the year(27)
- iHowz comment – There are fewer non-decent homes now than in 2006, but progress has stalled(28)
References
i iHowz Landlord Association have been in existence, in one form or another, since 1974; based in the Southeast, it supports landlords over the country.
ii Contained in the briefing notes for the Kings Speech -https://assets.publishing.service.gov.uk/media/6697ac9cab418ab05559271d/King_s_Speech_2024_background_briefing_GOV.uk.pdf
iii Economic Contribution of the Private Rented Sector – pwc. Published by Paragon and NRLA
iv https://www.uswitch.com/mortgages/buy-to-let-statistics/private-rental-statistics/
v Economic Contribution of the Private Rented Sector – pwc. Published by Paragon and NRLA
vi House of Commons Library: Taxation of private landlords
vii https://www.hamptons.co.uk/articles/buy-to-let-purchases-fall-to-record-low#/
viii https://www.gov.uk/government/collections/english-housing-survey
ix https://www.gov.uk/government/statistics/english-housing-survey-2021-to-2022-private-rented-sector/english-housing-survey-2021-to-2022-private-
rented-sector
x https://www.gov.uk/government/statistics/mortgage-and-landlord-possession-statistics-october-to-december-2023/mortgage-and-landlord-possession-
statistics-october-to-december-2023#landlord-possession-timeliness
xi
https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/populationandhouseholdestimatesengland
andwales/census2021unroundeddata#population-and-household-estimates-england-and-wales-data
xii https://www.housing.org.uk/globalassets/files/supply/how-many-homes-did-housing-associations-build-last-year-report.pdf
xiii https://www.gov.uk/government/statistics/social-housing-lettings-in-england-april-2021-to-march-2022/social-housing-lettings-in-england-tenants-april-
2021-to-march-2022#fn:1
xiv https://labour.org.uk/wp-content/uploads/2023/02/5-Missions-for-a-Better-Britain.pdf
xv https://www.gov.uk/redress-scheme-estate-agencies
xvi https://uprn.uk/
xvii https://www.landlordtoday.co.uk/legislation-and-compliance/2022/7/landlords-should-act-now-against-failing-court-system
xviii https://www.ft.com/content/6d765d94-5c5a-4313-a473-525d7814721e
xix https://www.gov.uk/civil-injunctions-criminal-behaviour-orders#:~:text=You%20can%20get%20a%20civil,are%20still%20used%20in%20Scotland.
xx https://www.gov.uk/government/publications/anti-social-behaviour-action-plan/anti-social-behaviour-action-plan
xxi https://www.lawsociety.org.uk/contact-or-visit-us/press-office/press-releases/government-set-to-miss-target-to-reduce-courts-backlog
xxii https://england.shelter.org.uk/media/press_release/homelessness_due_to_no-fault_evictions_up_by_76_in_a_year
xxiii https://assets.publishing.service.gov.uk/media/6697f5c10808eaf43b50d18e/The_King_s_Speech_2024_background_briefing_notes.pdf
xxiv https://www.uswitch.com/mortgages/buy-to-let-statistics/private-rental-statistics/
xxv https://thenegotiator.co.uk/news/rental-market/rent-arrears-climb-24-year-on-year-as-tenants-struggle/
xxvi https://www.finbri.co.uk/blog/why-are-landlords-increasing-rent
xxvii https://www.property118.com/property-maintenance-costs-account-for-a-fifth-of-rental-income/
xxviii There are fewer non-decent homes now than in 2006 (source The Health Foundation 2024)
