The Nationwide Foundation - a charitable foundation founded by the Nationwide Building Society - says the Renters Reform Bill should be made even tougher to help tenants.
A statement from the foundation says: “It’s widely accepted that the affordability of private renting is a major concern, but the Bill does nothing to address this. It does limit rent rises to annually, but leaves the door open for landlords to use big rent rises as a way of evicting tenants.
“The government should prevent landlords from carrying out backdoor revenge eviction via unreasonable rent hikes. This should be done by limiting rent increases within tenancies to the lowest of either inflation or real median income growth averaged over the last three years.”
The foundation also claims that the Bill fails to deliver enhanced safety for private tenants. The statement claims: “We’d also like to see time limits for investigating and fixing damp and mould as part of the Renters Reform Bill, matching the new regulations brought in for social housing following the tragic death of Awaab Ishak in Rochdale.”
The government is also accused of not doing enough on enforcement, despite its measures including a pledge to enhance council funding to boost policing of the private rental sector.
The Nationwide Foundation claims: “Whilst it’s a step in the right direction, the Bill in its current form misses out on the opportunity to ensure that all renters truly have the security they need in their homes. Again and again, the Nationwide Foundation’s funded projects tell us that regulation is meaningless without proper enforcement.
“… While improved powers for local authority enforcement are welcome, councils already struggle to enforce existing regulation. It’s vital that local authorities receive ring-fenced resources to be able to root out and penalise bad landlords. Getting this right is key to allowing renters to actually use the new rights they will be getting from the Bill. And when legislative changes are made, tenants will still need advice and support to know their rights and be confident to use them.”
Perhaps most predictably, the scrapping of Section 21 eviction powers and clarification of Section 8 evictions grounds are not enough for the Nationwide Foundation, which says in its statement: “The Bill leaves open the door for less scrupulous landlords to abuse the new grounds without ever really intending to follow through on a sale or moving in. Evidence … tells us that, where similar changes were made in Scotland, the new grounds for eviction were often abused.
“To protect renters from this, we want the Bill to require more stringent evidence checks for landlords who seek eviction on these grounds. The Bill should also prevent landlords from re-letting the property for one year after using these grounds. On top of this, we want to see a prohibition on the use of the new sale or moving in grounds for the first two years of a tenancy.
“As it stands, landlords will be able to use these grounds six months after a tenant moves in, meaning tenants could start putting down roots in an area only to be evicted. We also want to see eviction notice periods extended from two to four months, to give tenants sufficient time to find a new home.”
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"made even tougher to help tenants." Help is the last thing this will do. All your proposals will do is push rents even higher, reduce availability, social mobility and employment opportunities as a result. I still do not understand why lobbyists dont realise that landlords are getting out in their hundreds of thousands and 80% of the properties are being bought by end users of which there are millions.
An over simplistic opinion is that this is a good thing. Government want people to own their own homes - and I'm sure the Nationwide would love to have more people applying for mortgages too. Rather than having to build new homes, it's far easier to deter landlords from maintaining their presence in the PRS and putting their properties onto the market where a first time buyer can get out of renting and onto the property ladder (and be so grateful that they can achieve this that they vote Tory at the next election). If only it was that simple - one tenant out of the PRS doesn't kerb the demand from other renters. Failing to appreciate the role the PRS plays in the housing market is just asking for issues to increase regardless of reforms brought in.
At first I didn't think I was going to agree with you, @NB, but after carefully reading your post I see you've made some excellent points even though at first glance I mistakenly thought you were going to argue the opposite!
Any landlord or agent who holds funds with Nationwide, should withdraw them today. Not only do Nationwide come out with this nonsense, but they are major supporters of Polly Bleat and her sheep at Shelter.
So many inconsistencies with this report. Rather than focus on the PRS the social housing sector should be overhauled to make it fit for purpose rather than flog the private sector for picking up the government failings over the last 25 years. We are now in a socialist semi totalitarian era where private ownership is frowned upon. Why work hard and invest when the state is going to step in at any cost?
what should be introduced by government is the reversal of the tax burdens and status placed on landlords, many are not businesses or investors they are old fashioned landlords who have provided homes for families for years in a bid to support their pensions, by all mean regulate Private landlords however, the more that sell up the higher rent will go up and less homes available in the PRS.
We see the rapid destruction of the private rental sector. There are now fewer properties to rent, as private rental landlords continue to sell up. We have returned to socialism of the 1960’s before Margaret Thatcher opened up the rental market and security for landlords.
Totally agree, @Margaret, we are being dragged back to the bad-old days of the 1977 Rent Act which - for those that don't know - was the absolute kiss of death to the already very beleaguered PRS at the time...
Here's my ultra-brief overview of that appalling Labour masterpiece (foist on the nation by James Callaghan who was the PM immediately before Mrs Thatcher, who then reversed a lot of the damage he did despite the unions best efforts to stop her)...
...I didn't just type all this here and now, its a slightly edited extract from a very prescient article I once wrote several years ago...
Building on “temporary emergency measures” introduced during the First World War that had never been repealed, a similar thing happened during the 1960s and 1970s to exactly what is going on again right now which, culminating with the Rent Act 1977, ultimately resulted in the complete stagnation of the ‘private residential market’ by making the majority of tenants “sitting tenants” with “protected tenancies” who could not ordinarily be evicted, whose protected tenancies could be passed on to their children, and whose rent was controlled not by the landlord and market forces but by an official rent officer usually setting rents unrealistically low which often led to loses instead of even just tiny profits for the landlord.
Rather than benefiting the tenants as intended, these laws instead led to a number of very detrimental consequences for them because they “blighted” the rental properties they were living in, resulting in them having substantially reduced values - typically over 60% less than for the same property with no tenancy!
Landlords lost their incentives to retain the tenants or cosmetically maintain or improve their properties. Instead they usually just waited for the tenants to one day move out so they could sell the property at its full market value and then escape these (for them) draconian laws. Only when able to sell at full market value would they finally be interested in modernising or redecorating their properties.
Furthermore, few owners of properties had any intention or desire to offer their properties to new or prospective tenants. As a result, existing tenants usually had no option but to stay where they were, even if the property had become unsuitable for them - for example because they needed to relocate for work, or they needed more space, or their earnings had improved so they could theoretically afford a better property (if only one were available for them to move to), or if the property had become increasingly “shabby”, “outdated” and depressing for them to live in - these laws had cost them their flexibility and choice.
By 1979 (the year of Mrs Thatcher's landslide election) almost all private, corporate and institutional landlords wanted to give up and the number of available properties offered to new tenants or those looking to move had fallen by over 90%.
That's what we're heading back to.... you can probably sell your properties now, pay the CGT (or Corp Tax if you're incorporated) then buy them back in about three or four years time for perhaps around a third of the price!
This bill is madness for the private property sector, it is not for the private landlord to provide social housing that is for the Government to provide. All this bill will do is make more of us private landlord and sell up and get out of the market. I think we provided such an important service to the housing sector. With the introduction of rent control (via the back door) who will help who will help the private landlord who has suffered huge rate rises over the last 14 months?
Absolutely right @Mansur... i totally agree.
"Renters Reform Bill needs to be even tougher...."
Yes they're right, it does, absolutely... because although its already doing a really good job of wrecking the PRS it hasn't quite managed to completely destroy it yet so they'll just need to try a little harder!
Barry X you are totally right to clarify what the situation was under Labour before Margaret Thatcher came to power. Labour totally destroyed the PRS with very few properties available to rent. Labour brought in rent control, and making it impossible for a landlord to evict tenants and get their properties back . Thousands of landlords permanently lost their properties with “sitting tenants” paying low restricted rent and never able to get their properties back ! These properties appeared in auctions having low values because of a “sitting tenant” refusing to give up the property !!!!!
Sorry for coming back so late and so only just seeing your excellent post, @Margaret R, you are absolutely correct in every respect...
...it astonishes me how few so-called professional landlords, and even fewer supposedly professional agents, have any knowledge or understanding about this - especially considering how utterly fundamental it is for what we all do... To my mind it's a bit like being a doctor in the days before, say, the circulation (or even purpose) of blood was discovered!
Even worse still, and utterly inexcusable, our so called professional bodies who purportedly represent us either don't know or don't care... That's an absolute disgrace because they should really be making a huge fuss to publicise it widely in the national press, coach MPs on the facts and tegularly send out informstional mailshot to all of their members to inform & educate them... but as we know they simy don't, and it's hard to know why they don't... They completely fail & betray as all....
...as do the so-called "Torries" who you'd expect to know & do better (unlike Labour) and be actively pro-business and also pro- explaining to tenants and their various militant pressure groups, and "charities" (really just political lobiests & opportunists) like Shelter etc just how incredibly cou yer-productive & detrimental many of these policies and new laws and regulations are to TENANTS as well as their demonised and vilified landlords!!!!
Rant over, but sincerely meant in every detail.
Thanks again.,and sorry for all typos - it's late & I'm tired!
B
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