Renters Revenge Bill
Thursday 25th May 2023
Landlords and letting agents are up in arms about the proposed new Renters Reform Bill announced by Michael Gove a few days ago, after years in the gestation.
The sheer stupidity of a Tory Government driving landlords out of the sector, when the shortage of supply is already causing rents to rise at an eye-watering rate, is incomprehensible. Goodness knows what Labour would do though - one for another article!
Focusing on Central London for a moment, I don’t think this new Renters Revenge Bill need be too bad, though it is still not a plus.
Firstly, let’s deal with the drive to improve energy efficiency by requiring all let property to have at least a Grade C Energy Performance Certificate (EPC) by 2028 at the latest. We have a number of landlords who have managed to raise their EPC to a C, with relative ease. In flats, cosily nestled amongst other warming flats, in larger buildings it isn’t that hard. Houses can be more expensive, but a C can still be attained with a few upgrades. Our observation is that there has been grade inflation in EPCs anyway. We have had properties that were graded D 10 years ago and now, with no work to improve efficiency, seem to get a C. Who knows why!
Secondly, getting rid of Section 21 Notices- dubbed ‘no fault’ notices by Shelter and the Govt - need not be catastrophic. The proposed (and boosted) mandatory reasons in Section 8 notices, cover most reasons why a landlord might normally require a property back/a tenant out. If these are not watered down during the Bill's progress through the Houses of Commons and Lords, and the speed of dealing with disputes is improved as promised, there shouldn’t be many problems with tenants becoming ‘sitting tenants’.
Thirdly, London has a long history of ‘company lets’ and a ‘long, long time ago, I can still remember’ (shush Don), pre the 1988 Housing Act, it was commonplace to do company lets, even when it was clear that set private individuals were living in a property long-term. The private individuals, were on the tenancy agreements as ‘permitted occupiers’ and often acted as guarantors for the company, which may even have been set up specifically for the purpose of that particular let. Clearly, it was a nonsense - solved by the 1988 Act.
Since Jan 1989 the private rental sector has boomed because landlords no longer feared sitting tenants. We are not quite going back to the dark days but this Renters Revenge Bill is not an advance…
As a small aside on the above...
When rent paid by companies under company lets became taxable as a benefit in kind to employees, big companies (think Goldmans etc) were delighted not to have to rent properties for their employees in the company’s name. Companies didn’t enjoy the liability and it was much less hassle all round to simply pay the individuals, letting them rent their own homes. If by this legislation, companies are forced back into renting properties for their employees, it is yet another reason to locate people and businesses in Dublin - given a choice.
Email me with any questions you have about the Renters Revenge Bill and I will try to answer them.
Until next time,
PB
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