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Should landlords get behind the 'Kill the Bill' Campaign?

The Housing and Planning Bill 2015 has been a talking point for some time, both in and out of the halls of Westminster.

There are concerns as to what the proposals within the bill could mean for social housing, tenants, landlords and indeed whether the solutions suggested are going to have the desired impact, or if they will add further confusion to the already tumultuous UK property market?

Led by Labour leader Jeremy Corbyn, 1,500 people marched in favour of ‘Killing the Bill’ in January, and with another protest scheduled for Saturday there is plenty of fire behind scrapping the scheme.

But, is this actually the way forward? Should landlords be falling in Camp Cameron or Camp Corbyn?

What exactly is the Bill proposing?

Council Tenancies
It has been proposed that tenancies will now be for a fixed term period of between two to five years – halting the previous availability of a ‘tenancy for life’. Tenants would have to reapply for their right to their property after a set period of time.

Tenancy succession
This proposal suggests that social housing tenancies would not be able to be taken over by a family member if the original tenant gives it up, or dies. Spouses, civil partners and those living together as man and wife will still be able to continue with the tenancy.

Pay to Stay
This very controversial proposed scheme requires households who earn over £30,000 (£40,000 in London) to pay market rent if they wish to continue living in their social housing.

Banning orders
Proposals regarding banning orders suggest that local authorities could apply to the First Tier Tribunal to make a banning order against rogue landlords and property agents following conviction for a banning order offence. The effect of the banning order will be to stop a person from letting property or engaging in letting agency or property management work for a period of time.

Database of rogue landlords and property agents
The Bill is proposing a nationwide database of rogue landlords and property agents in the UK. A landlord or property agent may be added to the database if a banning order has been made against them. Local housing authorities responsible for maintaining the database.

Rent Repayment Orders
Proposed Rent Repayment Orders would allow tenants to request that the landlord repay an amount of rent if the landlord has been found guilty of the following types of offences (which must have been committed within 12 months of the application being made):

Unlawful eviction under the Protection from Eviction Act 1977

  • Breach of a banning order
  • Violent entry under the Criminal Law Act 1977
  • Breaches of improvement orders, prohibition notices and of licensing requirements under the Housing Act 2004.

Recovering abandoned premises
Clause 49 sets out that a private landlord may give a tenant notice which brings the tenancy to an end on that day. This is only the case is the property is in England, and:

  • A certain amount of rent is unpaid – (8 weeks if rent is payable weekly or fortnightly, 2 months if rent is paid monthly, 1 quarter if rent is paid quarterly or and at least three months’ rent is more than three months in arrears if rent is payable yearly)
  • That the landlord has given a series of warning notices - The landlord must give the tenant and any named occupier two warning notices, at different times, before they are able to recover the property. Each notice must clearly state that the landlord believes that the property has been abandoned, and the tenant must respond to the notice in writing if this is not the case. If the tenant does not respond to the first notice, the landlord must issue the second notice at least two weeks (but not more than four weeks) after the first.
  • That neither the tenant or a named occupier has responded in writing to those warning notices before the date specified in the notices.

Starter Homes
The Bill is proposing a scheme to introduce a series of Starter Homes, which can only be purchased by first time buyers. These properties would be eligible for a 20% discount off of the market value, with a capped value of £450,000 in London, and £250,000 outside Greater London.

How would these changes impact me as a landlord?

Council Tenancies / Tenancy Succession
Many social housing tenants remain in their properties for many years, with many taking over tenancies from family members. However, if these proposals come into force, many people would find themselves looking at an unrenewable tenancy at the end of their lease, or if the lead tenant gives up the original lease. At this stage, many households would have to turn to the private lettings industry. This would be positive news for private landlords, however there is a concern that residents who have been used to subsidised local authority rents may not be prepared – or able - to pay current market rates.

Pay to Stay
Whilst one of the least popular proposals with protestors, if implemented, the proposed Pay to Stay scheme could be a benefit to private landlords. The scheme requires tenants who earn over £30,000 (£40,000 in London) to pay market rent if they wish to continue living in their social housing. Many people may choose to move (possibly out of principle or choice), and may look to the private rental sector to provide an alternative option.

Banning orders
Orders will last for at least six months and if breached, a local authority can impose a fixed penalty of up to £5,000. If a landlord is issued with a banning order, any tenants who reside in properties owned or managed by that landlords are still protected by the relevant tenancy agreements, and maintain all of their legal rights.

Recovering abandoned premises
This would allow landlords to reclaim properties after abandonment without the expensive, time-consuming process of going to court. There is concerns that tenants may have a good reason for not responding to warning notices (hospital admission for example) and it would be wise for landlords to be aware of all of the possibilities before recovering a property.

Database of rogue landlords and property agents
As long as you are abiding by the regulations, this shouldn’t affect you. The database has been proposed as a method of helping to name and shame the very few landlords and agents who let down the private lettings industry. It is hoped that the introduction of a database that prevents these individuals from renting to unsuspecting tenants would help to clean up the industry for the thousands of individuals who work hard to abide by the rules.

Rent Repayment Orders
As a landlord, the proposed Rent Repayment Order could have a real impact on you – if you are found guilty of one of the relevant offences. However, for most landlords who remain on the right side of landlord law, this section of the Housing Bill is unlikely to have much of an impact.

Starter Homes
One of the most flammable issues with campaigners is that the costs of the proposed starter homes are still far above what the average household can afford. There is no doubt that any affordable properties can only help the inflated market, however if the critics are right in their concerns that first time buyers are going to find it difficult to take advantage of the scheme, it is likely that more will be turning to rental properties as an alternative.

So what happens next?

The Housing and Planning bill has created a split both inside the House of Commons and out, with many Labour and Green Party MPs aiming to ‘Kill the Bill’, whilst Conservative MPs remain keen to implement the changes.

How successful the Kill the Bill campaign will be remains to be seen, but one thing is for sure, the Housing and Planning Bill 2016 will certainly change the landscape in the private lettings market - quite how we will just have to wait and see.

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