So this week, I was at a conference where Michael Gove, the Secretary of State for Levelling Up, Housing and Communities of the UK, spoke about the Housing Act that’s being passed or has had its second reading in parliament.
Section 21
So far and it looks like it’s going through, and one of the big things that’s been in the news and everybody’s talking about is the Section 21 that is a no-fault eviction current system that is to be removed, and the response from Michael Gove on that at the moment is that it won’t be removed until they have a better system in place for dealing with anything to do with repossessions or evictions, etc., because at the moment the court system just takes far too long to go through. Michael Gove favours the scenario that the court system is streamlined and made more efficient and made to work better.
The committee that is advising on this, headed by Clive Betts, is suggesting that there should really be a tribunal type court or a specialist court that only deals with property and possessions of property to deal with these things which make it quicker. So that’s not decided yet. There’s also to be a disputes or mediation ombudsman put in place, which will mean that if the tenant or the landlord have not got a great response or they’re not getting on there, they can go to a third party such as the disputes, mediation or ombudsman to deal with that.
Landlord / Property Register in England
They’re also suggesting that there’s a registering of property and landlords across the board in England, which they’re calling the Property Portal, which will not only require landlords to register their properties, but also bring all the standards together into one place. Things like your safety certificates, your energy performance certificates, and your electrical safety certificates, that kind of thing being registered with a portal in England That’s not going to replace anything along the lines of planning permission or licensing or selected licensing in particular areas. It’s just really for registering and keeping everything together.
EPC’s
One of the other suggestions, or it’s been talked about a lot is the minimum EPC value being a C and that being brought in but again, the standards that have been proposed are there, but there is no mechanism to bring that in or to help landlords or to guide landlords in how that’s going to be done. So that’s on hold at the moment.
Enforcement was an area. They talked about things like local councils can’t tell the difference between good and bad landlords at the moment, so how do they educate local councils to be able to act and also give them the finances to help them act in that situation.
Fixed Term Contracts/ Student Property
One of the other big things is student accommodation because the Housing Act is talking about doing away with fixed term contracts. In other words, you can’t give someone a contract or a tenancy agreement that says they can only have a six-month contract or tenancy.
That causes a lot of problems for students, because student accommodation is predominantly only run from term to term. So that has now been changed.
The wording at the moment is that a student accommodation that’s been purpose built for students, doesn’t have to adhere to the open term contract being proposed. They can have a fixed term, which is basically based on the terms of the university, whether or not that’s passed on to HMOs or houses that have been converted into student accommodation. Michael Gove says that that will be allowed, but we’ve yet to see if that’s actually going to happen.
Housing Benefit
Another big one is housing benefits and housing benefit at the moment was frozen during covid and hasn’t got up to the private rented sector levels of rent. So it’s inhibiting people that are on benefits to get into areas where the rents for private sector are going to be much higher. That is going to be under review and hopefully the housing benefit will be released from being frozen at the very least and start to come up in line with inflation.
Rent increases/ Possession
Rent caps was something that Michael Gove has said he’s very strongly against not having caps on the rent and rent control because that effectively will push landlords into a worse situation, possibly going bankrupt or just not being involved in property anymore selling up, or also could make the properties into a worse condition, because the landlords just don’t have the money to spend on it.
There’s also an element of rent increases being included in the tenancy agreement, so that can be built in to go along with perhaps inflation, so you can be allowed to increase the tenancy rents along with inflation perhaps once a year, and persistently late payments from tenants such as tenants that might turn around and constantly be late with their payments. They can evicted more quickly and can be acted on quickly.
One other point on possession for yourself with the tenancy agreement is that you can gain possession easily if you are going to bring the property back for yourself to live in or family members or you want to sell it. So that is still going to be possible for you.
Tax,
There’s a tax element that was asked and talked about whether or not he would be reintroducing the tax benefits of offsetting your interest against your income, but that’s a definite not being looked at. He did suggest there may be other options if suggestions are put to him.
What that means, I don’t know.??
Service accommodation
At the moment is being reviewed.
They’re thinking that most properties will only be allowed 90 days to be rented out on Airbnb or service accommodation unless they gain planning permission, which will be again through the local councils.
I hope you find this a really good update and brief update of what was discussed and how things are looking at the moment.
Obviously, this Act hasn’t been cleared through Parliament yet, but they are pushing forward with it and those sound like they’re going to be the majority of changes.
The housing act being pushed through parliament
The housing act being pushed through parliament.