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UK Cracks Down on Landlords in Private Rental Sector Reform

(Bloomberg) -- The UK government laid out a series of extra protections for tenants in the biggest shake-up of the private rental market for a generation.

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Under the Renters’ Reform Bill introduced to Parliament on Wednesday, the government will abolish the existing “section 21” provision allowing landlords to remove tenants via so-called no-fault evictions, according to a statement from the Department for Levelling Up, Housing and Communities. It will also give renters more power to challenge poor living standards without fear of losing their homes.

The legislation — which was first discussed by the Conservative Party in 2019 — has been eagerly awaited by advocates for tenants’ rights, who have long sought extra protections for millions of people in England who rent their homes from private landlords.

The “bill is a huge opportunity to improve the lives of the 11 million people who now rent from private landlords,” Dan Wilson Craw, acting director at campaigner Generation Rent said. That’s because “section 21 evictions make it impossible for tenants to put down roots and report problems about their home with confidence.”

Fixed-term tenancies are also set to be scrapped and replaced with open-ended agreements, meaning landlords will no longer be able to evict tenants at the end of a contract. What’s more, landlords will only be allowed to hike rents once a year. Housing Secretary Michael Gove told BBC News on Wednesday that he hopes the bill will become law by the end of this year.

Evictions

The alternative route for landlords is to evict tenants through the courts using a provision allowing the removal of residents that have damaged the home, engaged in anti-social behavior, or fallen into persistent rent arrears.

Still, there is concern among campaigners that the bill contains loopholes, such as landlords being able to remove tenants to make way for themselves or a family member.

The bill “should be as strong as possible with every loophole closed, so that no renter can be unfairly evicted,” Polly Neate, chief executive of housing charity Shelter said in a statement.

While the added protections may serve as some comfort to people facing soaring rental prices in many cities, they also risk triggering an exodus from the rental market of landlords who are already contending with higher mortgage costs as a result of a series of interest-rate hikes, and more stringent regulation.

‘Serious Concerns’

Ben Beadle, Chief Executive of the National Residential Landlords Association said in a statement that when the section 21 provisions are removed, “responsible” landlords will need confidence that they can repossess their properties as quickly as possible when they have legitimate reasons.

The government said that landlords too would get extra powers to evict anti-social tenants, speeding the process up and “broadening the disruptive and harmful activities that can lead to eviction.”

Beadle called for more details on how that will work, and also said the government needs to address “serious concerns” about open-ended tenancies held by landlords letting to students, because of the need to plan around the academic year.

Publication of the bill will enable politicians to debate the specifics of the legislation, which also include provisions aimed at improving the safety and quality of rental homes.

Labour Support

The crackdown on private landlords will also make it illegal to have blanket bans on renting to tenants with children or those receiving benefits. It will also give renters the legal right to request a pet in their home, and provide a new Ombudsman to settle disputes with landlords.

Prime Minister Rishi Sunak is already under pressure to improve Britain’s housing woes after the nation’s property crunch was blamed for contributing to the Tory’s widespread losses in local elections earlier this month. Meanwhile, Labour leader Keir Starmer is looking to capitalize with a set of fresh policies to boost homeownership, including restoring housing targets to ensure that the private sector builds at least 300,000 homes a year.

Starmer on Wednesday said he plans to back Gove’s bill.

“I actually think what he’s saying is broadly right and we would support it,” Starmer told BBC News. “I don’t think that no-fault evictions are right. They don’t give security so I’ll broadly support what the government are doing today for renters.”

--With assistance from Kitty Donaldson.

(Updates with Gove comment, more detail on bill starting in fifth paragraph.)

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