Labour’s housing minister Matthew Pennycook is said to be planning a “hardship test” similar to an idea introduced in France in 2008 to limit homelessness.
The way it would work is, any landlord looking to evict a tenant would be compelled to show that the eviction wouldn’t cause excessive hardship to the tenant.
According to The Daily Telegraph the new housing minister is serious about the proposal which would be incorporated, along with other enhanced tenant security measures, in Labour's new Renter’s Rights Bill - a somewhat strengthened version of the Conservative’s Renters (Reform) Bill - expected soon.
These tests would be a three-point assessment of how an eviction would affect the tenant/s:
There would be the removal of Section 21 the no-fault eviction process immediately once the new Bill becomes law. So landlords will presumably be obliged to take the tenant to court where it would be up to each party to plead their case. Could a judge be convinced one way or the other over a hardship claim, that would be the key to getting a possession order. All evictions would have to use Section 8 of the Housing Act 1980, as amended, once Section 21 goes.
Quite how point 3 works is unclear. The law, as it stands says all local authorities are required to find evicted tenants at least temporary accommodation, so in theory no court eviction could make a tenant in England homeless?
The other serious issue for landlords right now is the state of the county courts system. Currently residential evictions are taking up to 12 months to be processed and Labour is intimating that the new laws will not be delayed awaiting any improvement in the courts’ systems.
The hardship tests, if implemented, would further complicate the evictions of tenants at a time when the document based (no need for a court hearing) section 21 eviction process ends. Every eviction will need a court hearing. This would inevitably put further strain on the courts system at a time when it is barely coping already.
The new Renters’ Rights Bill that was announced last month in the King’s Speech, included materials explaining that the bill would introduce “new, clear and expanded possession grounds” to allow landlords to reclaim property when necessary.
However, Mr Pennycook is said to have proposed removing “persistent rent arrears” as grounds to evict tenants, i.e. those who fall into two months’ arrears at least three times.
Mr Pennycook is also said to favour imposing a two-year wait on landlords from the start of every tenancy, those landlords who want to sell or move themselves or a relative back into their property. Mr Pennycook, who is the MP for Greenwich and Woolwich in London, has already argued that tenants should be allowed to leave a landlord’s property after the first two months of starting a new tenancy.
Mr Pennycook also wants to see an “end to rental bidding wars”, giving tenants the right to challenge landlords who take advantage of excessive tenant demand by hiking up rents. This was also promised in the original Tory legislation under the Renters (Reform) Bill, with an extension of the Decent Homes Standard to the private rental sector and Awaab’s Law, regulation of conditions involving damp and mould.
Labour will almost certainly ramp up its plans for stricter rules on expensive eco-refurbishments for those rental properties not meeting the standards – aiming for EPC ratings of C by 2030, a standard now approved.
According to The Daily Telegraph residential properties, new and old, are estimated to produce nearly 20% of greenhouse gas emissions in the UK. Bringing them up to the new standards will likely require costly upgrades, including heat pumps, solar panels, insulation, double glazing and draft proofing.
The previous government had proposed placing a £10,000 cap for landlords on upgrading these costs. However, Mr Pennycook is said to be considering bringing back the more stringent target (EPC “C” by 2023) with a higher cap or no cap at all.
It has been estimated that the cost of upgrading a property from the worst rating of EPC ‘G’ to bring it up to ‘C’ would cost around £27,000. Experts suggest that spending £10,000 would bring 90% of ‘D’ rated properties to ‘C’, but only 60pc of those rated ‘E’.
The spectre of this round of changes confronting buy-to-let landlords raises new fears of a “war on landlords”, landlords who have already faced something similar under the last government, except some of Labour’s plans add new stringency, something that could result in even more landlords leaving the sector.
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