Renters' Rights Bill

Written evidence submitted by the Guild of Residential Landlords to The Renters’ Rights Public Bill Committee (RRB54).

Executive Summary:

• The Renters' Rights Bill’s extension of the rent arrears threshold from two months to three months significantly impacts landlords’ financial security, especially those who rely on rental income as their primary or sole source of livelihood.

• Increasing the Section 8 notice period from 14 days to one month lengthens the eviction process. This can lead to prolonged periods of unpaid rent, which can strain landlords financially and impact their property management obligations.

• The bill’s proposal to convert all tenancies to periodic-including student tenancies-introduces new risks for student accommodation providers. Students could potentially vacate early in the academic year, leaving rooms unoccupied and causing financial losses. I request that these changes be reviewed to ensure fair and practical timelines and tenancy structures for both landlords and tenants. This would support a sustainable rental market that safeguards the interests of responsible landlords.

Introduction:

I am Adrian Thompson, a private landlord and representative of the Guild of Residential Landlords with direct experience managing rental properties, including student accommodations, and ensuring compliance with legal obligations. My submission highlights potential issues within the proposed changes to rent arrears thresholds, notice periods, and tenancy structures as outlined in the Renters' Rights Bill 2024. These concerns centre around the bill’s impact on landlords’ financial viability and ability to meet ongoing property obligations, as well as the specific needs of the student rental market.

Key Concerns and Evidence:

1. Increase in Rent Arrears Threshold from Two Months to Three Months:

• The new threshold prolongs the duration before landlords can begin eviction proceedings, requiring three months of rent arrears rather than the current two months. This delay potentially extends the eviction process considerably.

• For landlords who rely on rental income as their primary source of income, this additional month of arrears can result in severe financial strain, especially in a market with rising costs and obligations such as mortgage payments and upkeep expenses.

• Example: A landlord earning £800 per month in rental income would lose £2,400 before initiating eviction proceedings, impacting their capacity to cover basic property-related expenses and comply with mandatory maintenance and safety checks.

2. Extended Notice Period for Section 8 Notices from 14 Days to One Month:

• The proposed change increases the notice period landlords must give tenants in rent arrears from 14 days to one month, further delaying resolution in cases where tenants do not remedy the arrears.

• This extension places an additional burden on landlords, especially those who operate single or small portfolios. They are without income for extended periods while remaining legally responsible for property maintenance and tenant welfare.

• Given that the typical court process can already extend for several months, the combined impact of extended arrears thresholds and notice periods means that a landlord could realistically face a six to eight-month period without rental income before obtaining a possession order.

3. Impact of Converting All Tenancies to Periodic for Student Lettings:

• The bill’s provision to convert all tenancies to periodic tenancies does not account for the unique nature of student lettings, where fixed-term contracts align with academic terms and ensure a consistent tenancy for landlords and students.

• Student accommodation providers typically let properties on fixed terms that match the academic year, which reduces the risk of void periods. Should a student be able to end a tenancy early, it is unlikely that landlords could replace them mid-academic year, resulting in potentially vacant rooms and financial losses for the landlord.

• Example: If a student tenant decided to vacate shortly after beginning their tenancy in September, it would be highly challenging to find a new tenant, as the academic year would have commenced, and prospective tenants would likely have already secured accommodations. This could leave landlords unable to let the room again until the following academic year, leading to a significant financial gap.

Recommendations:

To balance the interests of both tenants and landlords, I respectfully propose the following adjustments:

• Rent Arrears Threshold: Consider maintaining the two-month arrears threshold, as the current timeline is essential for landlords' financial security and ability to meet maintenance obligations.

• Section 8 Notice Period: Reevaluate the increase to a one-month notice period, particularly given the potential for prolonged court delays. A 14-day notice period offers a fairer timeline, especially in cases where tenants have shown an inability to remedy arrears.

• Fixed Terms for Student Lettings: Introduce an exemption or alternative provision within the bill to allow student landlords to retain fixed-term tenancies aligned with the academic calendar. This would maintain continuity for both students, who benefit from stability in their accommodation, and landlords, who require consistent occupancy throughout the academic year.

Conclusion:

While well-intended, the changes to rent arrears thresholds, notice periods, and tenancy structures proposed in the Renters' Rights Bill present serious financial risks to landlords, particularly smaller landlords and those providing student accommodations. A balanced approach that supports timely resolution of arrears, fair tenancy structures, and the specific requirements of student lettings would foster a fairer and more stable rental market for all parties involved.

I urge the Committee to consider these points and adjust the bill accordingly. This would support a fair and sustainable rental sector in which landlords can continue to provide well-maintained housing.

October 2024.