The Renters Reform Bill has officially passed its report stage and third reading after a lengthy debate in Parliament yesterday, 24th April.
Of the many amendments tabled for debate, several came into particular focus, including the abolition of section 21 no-fault evictions.
While an amendment put forward by Labour MP Matthew Pennycook, which would ensure the abolition of section 21 evictions would come into force on Royal Assent, this was dismissed, following a 158 aye – 274 no vote.
Instead, MPs voted in favour of the new clause 30 — backed by 283 members — which stipulates that the Lord Chancellor must prepare an assessment of the operation of the county court possessions order process in England and its enforcement before banning section 21 evictions.
Pennycook criticised the new clause 30, implying that this would put the section 21 ban in limbo, as there have been no specifications yet of the timescales in which the assessment needs to be published or the specific metrics against which the Lord Chancellor would judge the readiness of the court system.
“There are no corresponding obligations imposed on the Secretary of State, so if a future Lord Chancellor assesses that funding or other specific measures are required to make the courts ready for the new system, there is nothing to compel the Government of the day to implement them,” he added.
Upon remarks made by Conservative MP Sir Robert Neil regarding the costs of carrying out the assessment, Jacob Young, the parliamentary under-secretary of state for levelling up, housing and communities (DLUHC), revealed that a further £11m would be invested this financial year to deliver a new digital system for the HM Courts and Tribunals Service, in addition to the £1.2m invested to deliver a new end-to-end online possession process.
Nevertheless, Young confirmed that no date has been set for the abolition of section 21 evictions.
“We have always been clear that we will abolish section 21 when we are confident that the county court system is ready,” Young said.
“It is important for him to recognise that if the court system is not ready when we make this change—the biggest change in 30 years—it will not benefit tenants. It will not benefit landlords, but it will certainly not benefit tenants.”
Another prominent amendment debated in Parliament yesterday was the new clause 15, which stipulates that tenants cannot quit an assured tenancy in the first six months, unless the landlord agreed in writing to it taking effect earlier, or the tenancy follows one that ended within the previous month (relating to the same property and parties) — a proposal that was called by Generation Rent as a ‘tenant trap’.
During yesterday’s debate, 279 MPs voted in favour of the amendment compared to 142 noes, and thus the new clause 15 was added to the bill.
During yesterday's Parliamentary debate, Young stated a review of selective licensing and the licensing of HMOs would be carried out, to consider how to make the system more efficient for landlords, tenants and local authorities.
In response to concerns raised about the interaction between selective licensing and the new property portal proposed in the Renters Reform Bill, Young stated that the two systems have separate, distinct purposes, and clarified that the government does not intend to abolish selective licensing.
Olivia Harris, chief executive at Dolphin Living:
“While we broadly support the principle objectives of the bill and welcome the progress that is being made — especially around the introduction of an initial six-month tenancy period for tenants and the requirement for an assessment on the county court possession system before abolishing section 21 — as the bill progresses to the Lords, we need to be mindful of the potential unintended consequences of the legislation on intermediate rental providers; namely, the impact changes to section 21 might have on sub-market rent products which operate under the basis of a household income cap being used as a basis for tenancy allocation, and crucially, renewal.”
Allison Thompson, national lettings managing director at Leaders Romans Group:
“The amendment which suspends section 21 until an exhaustive review of the court processes for repossessions is completed, is both wise and practical, offering a more balanced approach for landlords and tenants.
“Most landlords resort to section 21 evictions only under challenging conditions, aiming to secure their right to reclaim their properties only when necessary.”
Paresh Raja, CEO at Market Financial Solutions (MFS):
“The Renters Reform Bill may have passed, but the circumstances of the vote, with no timeline for the implementation of no-fault evictions, leaves the market in a state of limbo.
“The government is right not to pander to pressure and rush through reforms that could destabilise the rental sector, but at the same time, the lingering prospect of reforms, without clarity around the exact form they will take and the date they will come into effect, is not healthy.
“Landlords and renters alike will suffer from such uncertainty.”
