Home Legal & Insurance Survey finds government plans to reform the private rental system are inherently...

Survey finds government plans to reform the private rental system are inherently flawed

From left to right Jonathan Mortimer, Ervin Shakaj and Matthew Hill of the Dispute Resolution team at Raworths.

Raworths, a leading firm of solicitors based in Harrogate, says the rental sector is under attack from government proposals which are inherently flawed, following a survey of over 185 individuals in the region with over 1000 rental properties.

One of the key objectives of the consultation is to remove the rights of landlords to terminate a tenancy with two months’ notice, without a reason. The change which relates to Section 21 of the Housing Act 1988, means landlords would only be able to recover their property from their tenant in limited circumstances, for example, if the landlord wished to redevelop the property or the tenant had substantial rent arrears.

Matthew Hill, a partner specialising in property litigation in Raworths’ Dispute Resolution Unit says: “The proposals as they stand represent a clear shift of additional rights for tenants and loss of control for landlords, which is likely to be of concern to many existing and potential landlords”.

“Moreover, the survey findings suggest that two of the fundamental reasons for reforming the sector by the government are over stated and that the proposals risk contracting the rental sector to the disadvantage of both tenants and landlords.”

The survey indicates that out of the Landlords asked, 55% said that these proposals were likely to affect their decisions as to whether to rent out properties in the future. Further, 83% of landlords said that they believed that with all the additional changes in tax and regulatory requirements letting out a property is not now as worthwhile as it was 5 years ago.

The move by the Government intends to tackle what it describes as the indiscriminate and arbitrary eviction of tenants by landlords, in particular, where landlords have attempted to regain possession of the property when the tenants have raised legitimate concerns. It also seeks to remedy the disruption suffered by tenants when landlords terminate tenancies too early.

Primarily, the Government says that tenants are disadvantaged by not being able to agree a suitably long tenancy for their needs. However, 82% of Landlords said that the length of term they were prepared to offer a tenant when negotiating a new lease was never an issue and only 17% of Landlords said that it was occasionally an issue with the tenant. Further, the survey found that over 55% of Landlords said that the average term of any tenancy lasted for two years or more.

Second, the Government says that it means to prevent Landlords from forcing out tenants who make a point of complaining about the condition of their properties. Almost all the Landlords surveyed said that their tenants never (66%) or very infrequently (32%) made complaints about the condition of their rented property. Further, when asked if their decision to terminate a tenancy had ever been based upon a tenant complaining about the condition of the property only 4% of Landlords said it had and that in 96% of tenancies it was the tenant that served notice.

Jonathan Mortimer, consultant partner in the Dispute Resolution Department at Raworths speaking about the potential effect the proposals could have on the rental market said:

“According to recent Government figures, 19% of households constitute of rented property, however over recent years renting out a property has become less attractive for landlords with increased administration and the erosion of tax breaks.  This proposal could be the final straw for many potential landlords who are not prepared to risk the loss of control of their property.

“Ironically, rather than these proposals assisting tenants in the rental sector, it could have exactly the opposite effect.  In particular, a lack of supply of rental properties coupled with an increase in rents for tenants”.

The Government consultation has now ended and Raworths intends to submit its findings to the Government. For every completed survey Raworths has made a donation to its Charity of the Year, The Harrogate Homeless Project.