Renters' Rights Bill

Written evidence submitted by Reapit (RRB12)

Reapit briefing: Renters’ Rights Bill – Evidence submission to the Bill Committee

Overview

1. Reapit is a leading UK-based technology provider to residential property sales and letting agents .

2. Established in 1997 , Reapit is used by over 15,000 estate agency branches wor ldwide with over 1 million properties under management. Our rental payment platform, PayProp, has processed over £5bn in rental payments for over half a million tenancies across the UK .

3. We are a trusted partner in the property industry with a focus on efficiency , compliance and financial transparency. Our market experiences indicate there is a critical, immediate and ongoing need to adopt and utilise technology to drive up standards across the sector and deliver on key government agendas.

4. Reapit is committed to supporting the delivery and ongoing development of a private rented sector (PRS) that is fair, open, professional and economically viable for tenants, agents and landlords. We are proud to champion the highest financial standards across the sector and, as such, are delighted to welcome the Renters’ Rights Bill to provide important changes to the PRS to further drive up standards.

5. To achieve this, we believe the architects of the Bill and all industry players must take cognisance of technology-enabled efficiencies in achieving its objectives, and avail themselves of data across the PRS to validate their decision-making. Technology, specifically bank-integrated PropTech , has unmatched potential to enhance transparency, accountability, and security, as well as efficiencies and data-led insights for all parties involved.

6. Whilst we welcome the Bill and accompanying engagement with the sector, we have several key concerns that we believe must be addressed to ensure it is successful.

7. We would be happy to provide oral evidence to the Bill Committee. If you have any further questions, please do not hesitate to contact our team via paypropuk@plmr.co.uk .

Ensuring fairness and transparency across the private rented sector

Abolition of Section 21 and reforming evictions

8. The abolition of Section 21 is a long-awaited and widely welcomed move. With its removal, the PRS generally understands and widely supports the idea that all evictions will now take place using Section 8. By shifting to the use of Section 8 for evictions, all eviction cases will now take place in court to decide a fair outcome.

9. It is therefore critical that the court eviction process be made as efficient as possible in preparation for the extra caseload . Current delays can have tenants waiting over eight months for a court date, needlessly causing stress and anxiety for all parties to the lettings contract and creating uncertainty among landlords.

10. Technology can play a role in making court adjudication of eviction hearings more efficient. Whilst some eviction grounds are discretionary – relying on a tribunal to decide outcomes on a case-by-case basis – evictions on mandatory grounds such as arrears could be streamlined through the use of PropTech , for example by submitting accurate verified and auditable transactional data collected by a property payments platform as evidence .

11. We welcome the proposed new eviction ground of persistent arrears and when a landlord needs to refurbish a property , but believe these should be mandatory grounds to reassure landlords the property can be recovered when a tenant cannot pay or a property is not fit for habitation .

12. We understand that the abolition of Section 21 will take place as soon as practically possible once the Bill receives Royal Ascent. However, we would ask the government to commit to reducing the median timeliness for landlord repossessions ( currently at 24.1 weeks).

We recommend that the following steps be taken:

13. Allow third-party evidence to be used in court in cases of mandatory eviction relating to rent arrears and establish a set of standards for third-party evidence to be used in court.

14. Make the new persistent arrears ground under Section 8 mandatory.

15. Clarify the role of the Ombudsman in rent arrears cases.

16. Ensure all rent arrears eviction cases are dealt with by a First-tier Tribunal (Property Chamber - Residential Property).

17. Introduce a mandatory ground for eviction f or landlords needing to refurbish a property.

18. Appoint an independent committee to review the eviction and court processes 12 months after Section 21 is abolished, and suggest policy recommendations to improve them.

Challenging unfair tenancies and unjustified rent increases

19. The plans to make all tenancies open-ended could present challenges for tenants to find willing guarantors under the new dispensation. There are also concerns over how rent increases will be agreed. In particular, we believe increased tenant challenges to rent increases will drive up demand for housing tribunals.

20. Demand for England’s Residential Property Tribunals has increased 144% since 2019, with over 8,000 open cases reported as at 31 March 2024. As the new Section 13 process may lead to a significant number of new rent review cases annually, the government needs to consider how best to support the increased workload HM Courts and Tribunals could face.

We recommend that the following steps be taken:

21. Reassure tenants and landlords about the role of guarantors under the proposed tenancy reforms.

22. Examine whether the proposed Private Rented Sector Landlord Ombudsman could resolve rental increase disputes to free up court time.

23. Define how pricing for ‘non-rent’ items such as utilities or insurance can be changed during a tenancy and what rights the tenant has to challenge them.

24. Ensure rent increase decisions are based on real rental price data rather than asking prices.

25. Publish a database of market rents, so tenants can check if their rents are close to market rates before they apply to a tribunal. This will also ensure all tribunals are working from the same data. 

26. Outline how housing tribunals will be supported to deal with increased demand and any additional funding .

27. Consider whether evidence such as photos and videos could be submitted instead of a visit to the property to reduce the cost.

28. Ensure any rent increase letters to tenants contain advice on how to challenge the rent increase if they feel it is unfair.

Pet insurance

29. Whilst we recognise the need for additional rights for tenants to have pets in rental homes, the draft Renters’ Rights Bill states that a tenant can be charged fees for pet insurance. However, pet insurance does not normally cover the most common causes of property damage from pets. Combined pet health and pet damage policies usually exclude scratching, digging, chewing, tearing, vomiting, fouling, or urinating. As a result, tenants could face large bills for repairs to rental properties due to insufficient insurance coverage.

We recommend that the following steps be taken:

30. The government must work with the insurance industry to deliver policies that cover the most common forms of pet damage at affordable prices.

31. The government should clarify who is liable to pay for repairs from pet damage that is not covered by insurance.

Driving up landlord and letting agent standards

Creating a digital Private Rented Sector Database for landlords

32. Reapit is wholly supportive of the Private Rented Sector Database concept. However, to ensure the Portal delivers enhanced compliance and standards whilst removing administrative burdens for lettings agents and landlords, it is vital the Bill and the subsequent regulations set by the government harness the benefits of PropTech .

We recommend that the following steps be taken:

33. Landlords should be able to add a managing/letting agent to the Private Rented Sector Database , to undertake compliance tasks on their behalf.

34. API endpoints should be established to enable PropTech providers to connect their solutions to the Portal, thereby facilitating the automatic provision of information and evidence on the Private Rented Sector Database .

35. Properties should be assigned a Unique Property Reference Number to ensure the right information is provided for the right property.

Delivering successful redress for the sector

36. Whilst we welcome all measures to improve standards and enhance transparency in the PRS, we are concerned that the introduction of the new Private Rented Sector Landlord Ombudsman will create confusion for tenants and add additional costs for landlords who use letting agencies to fully manage their property. The current proposals mean that landlords who use letting agents will be required to sign up for an additional ombudsman, despite the agency already being part of a property ombudsman, and tenants may need to navigate multiple concurrent ombudsman schemes to achieve a resolution.

37. We would like to put forward an alternative solution to simplify the redress options available to tenants which would also lower compliance costs for landlords using full management services from letting agencies.

We recommend that the following steps be taken:

38. Landlords should be allowed to use their agency’s redress scheme to resolve any landlord/tenant disputes. This would be in addition to agency complaints and eliminate the need to sign up for the new Private Rented Sector Landlord Ombudsman. This system is similar to one that already works well in Wales .

39. The government must also clarify if the Private Rented Sector Landlord Ombudsman will have a role in hearing rent arrears disputes. Reapit believes that to bring clarity to the eviction process, all mandatory eviction cases for rent arrears should be dealt with by a First-tier Tribunal.

40. Outline if the cost of signing up to the proposed Private Rented Sector Landlord Ombudsman will change depending on whether there are one or multiple tenants within the property.

41. Since landlords will be required to remain a member of the Private Rented Sector Landlord Ombudsman after they sell a rental property, the government must clarify where liability ends for a former landlord. In cases where a property is sold with a tenant in situ, it is also not clear whether the new landlord becomes responsible for the previous one’s failings.

The need for action: Key findings from our research with private rented sector professionals

42. Over 200 lettings professionals from across the UK took part in our r esearch survey covering some of the policies raised within the Renters’ Rights Bill , with headline findings illustrating that the sector faces significant challenges.

Headline findings include:

43. Over half of lettings professionals were neutral or in favour of reform to the private rented sector.

44. Almost all respondents (96.2%) believed the policies within the Bill would cause more landlords to exit the market while 94% thought that fewer properties would be available, resulting in higher rents for tenants.

45. Lettings professionals are concerned the p olicies within the Bill will not be adequately enforced. More than half (57.7%) believed they would not, 31.9% weren’t sure and only 10.4% felt they would.

46. Court capacity to deal with any changes to the eviction period was also flagged as vital. Over two thirds of respondents said a Section 8 eviction process would need to be less than two months to ensure agents would be confident that the property could be recovered when needed.

47. Our full report on the previous Renters (Reform) Bill , prepared by our rental payment platform brand PayProp, outlined similar changes to the PRS . It can be found here .

October 2024