The new Labour government is immediately facing calls to push ahead with rental reform that was promised by the Tories.
Rental reform is not just for the protection of tenants, argue industry experts, but is also crucial for the private rented sector to evolve and improve, which benefits landlords and agents, too.
Key parts of the Renters Reform Bill, which did not quite make it past the final post before the last parliament was dissolved, include abolishing Section 21 “no-fault” evictions, delivering a simpler periodic tenancy structure, changing the rules around lets for pets, and bringing in a property portal and ombudsman.
These lofty changes are largely expected to be upheld and brought in by the new Labour government, which has generally voiced its support for rental reform in the lead up to the election. He has been vocal about banning no-fault evictions in particular.
However, as the last government acknowledged, such evictions cannot just be banned – it is not that simple. Before this can happen, the courts system for evictions must be drastically improved, so that landlords don’t end up losing out and unable to successfully and fairly evict tenants.
Two years until rental reform?
According to political expert Simon Darby, from communications company PLMR, scrapping Section 21 evictions could actually be a lengthy process, despite previous statements to the contrary.
“The government will still have to go through the entire process,” he said. “Measures may be in the King’s Speech – there will have to be a period of consultation because it’s a new Bill and then it will have to go through Parliament again. It’s probably going to take a year, perhaps two years, potentially.”
Any changes made must be fair for both landlords and tenants, so even though Labour plan to essentially pick up where the Tories left off on rental reform, and pass new legislation to improve the private rented sector, it will not happen overnight.
The new deputy prime minister and housing secretary, Angela Rayner, concurred with this view when asked about the party’s promise to abolish no-fault evictions on “its first day in power”, as she said to LBC: “That’s a simplistic way of looking at it.”
She also acknowledged: “The court system is in a mess at the moment, and that needs sorting.”
So for the foreseeable future, it seems, nothing drastic will change in the rental sector in terms of rental reform, but it is clear that Labour will make this a key part of their early work at the helm of the government.
Labour must tread carefully
While rental reform is largely supported by those in the housing industry as a means of improving the sector for all involved, Knight Frank has warned against large-scale and fast-paced changes, while agreeing that the courts system must be working well before any new eviction legislation comes into play.
Tom Bill, head of residential research at the lettings and sales agency, said: “The risk for the lettings market is the introduction of policies that make it too financially punitive to become or remain a landlord, which could result in more owners selling up and higher rents.
“The Labour Party will revive the abandoned Renter’s Reform Bill in some form and had previously said it would end no-fault evictions on its first day in power. In an encouraging sign the party understands the picture is more nuanced, Angela Rayner recently told LBC: ‘That’s a simplistic way of looking at it.'”
Major landlord body will work with government
The National Residential Landlords Association (NRLA), which represents and supports thousands of landlords operating across the UK, has said that it will cooperate with Labour as it navigates rental reform since it gained power last week.
Ben Beadle, chief executive of the NRLA, said in a statement: “We congratulate Labour on its election to office. The party’s manifesto committed to fundamental reforms to the private rented sector. This includes ending section 21, ‘no explanation’ repossessions.
“We stand ready to work constructively with the new government to ensure changes are fair and workable for tenants and responsible landlords and are sustainable for the years to come. It is vital however that reform does not make worse an already chronic shortage of rental properties to meet demand.”
