Summary: The upcoming Renters’ Rights Bill is expected to pass with minimal amendments, amid growing concerns over a rental property shortage as landlords exit the market. Rising eviction costs and the risks posed by tenant subletting without consent are adding further challenges for landlords.

Renters’ Rights Bill Nears Final Approval

The Renters’ Rights Bill is scheduled to return to the House of Lords on Tuesday 14 October for its final stages. Only three amendments have been proposed, and no major changes are anticipated before it becomes law. This legislation will significantly affect landlords, particularly with the abolition of section 21 eviction notices, which has already influenced landlord behaviour.

Rental Property Shortage as Landlords Sell Up

Recent statistics from Goodlord reveal that 35% of landlords have sold properties, or 19% have attempted to sell, over the past 12 months. Among those who sold, 44% disposed of a single property, while 14% removed five or more properties from the rental market. This trend has contributed to a tightening rental market, with only 13% of landlords feeling positive about the sector.

The primary reason cited for this exodus is the Renters’ Rights Bill and the loss of section 21 eviction powers. These changes have led to a reduced supply of rental properties, making it harder for tenants to find accommodation. Nearly half (48%) of tenants reported difficulties securing a rental property in the last year, with some paying more than one month’s rent upfront.

With the Bill allowing tenants to challenge unreasonable rent increases, 22% of tenants say they will always appeal new rent rises. This is likely to increase pressure on the First Tier Tribunal, causing delays in rent increase hearings and leaving landlords uncertain about their income. Additionally, 42% of landlords have experienced tenants falling into rent arrears, reflecting wider cost of living pressures.

Eviction Costs and Delays Escalate

Data from the High Court Enforcement Officers Association (HCEOA) indicates that landlords face average eviction times of six to twelve months from the start of County Court proceedings to regaining possession. The financial cost to landlords ranges from £12,708 to £19,223 per eviction.

The HCEOA is calling for two key reforms: firstly, to allow high court judges to transfer eviction cases to the High Court when delays exceed three months or when enforcement requires ‘force’; secondly, to simplify the process for transferring cases ‘up’ to the High Court. They argue these changes could save landlords an average of £20,000 per eviction and reduce the unfair burden caused by County Court delays.

Mike Jackson of HCEOA commented, “This would save landlords who already have a court judgment in their favour thousands of pounds, prevent them from exiting the rental market and stop them becoming debtors of the future.”

Risks of Secret Tenant Subletting

A new report from Direct Line Business Insurance highlights that two-thirds of landlords have been exposed to significant penalties and prosecution due to tenants subletting without permission. Unauthorised subletting, even of a single bedroom, can reclassify a property as a House in Multiple Occupation (HMO) under the Housing Act 2004.

This reclassification imposes licensing requirements and strict compliance obligations on landlords. Failure to meet these can result in criminal offences with financial penalties ranging from £20,000 to £80,000. Additionally, tenants may seek rent repayment orders, although success is unlikely if the breach arises from their own illegal subletting.

Landlords are advised to seek specialist legal advice to manage these risks effectively and ensure compliance with HMO regulations.

Landlord Fined £25,000 for Intimidating Tenants

A husband and wife landlord couple were ordered by the First Tier Tribunal to pay a £25,000 rent repayment order (RRO) after the judge found they had deliberately intimidated their tenants. The landlords accused tenants of blackmail and threatened fraud reports when the tenants attempted to renegotiate their tenancy.

The landlords had failed to obtain an HMO licence and argued that rent was paid to their company, not them personally. However, the tribunal ruled that by issuing the section 21 notice themselves, they had presented as joint landlords.

The judge stated, “The purpose was, characteristically, to intimidate, against the ongoing RRO application, a vexatious campaign forming part of Mr Krogdahl’s personal vendetta against the applicants.”

Additional News Highlights

• Landlords caught in crossfire of Universal Credit rejections
• Survey reveals tenants who share properties are often unprepared
• Guidance on renting to a 17-year-old
• Fraudsters increasingly targeting the private rental sector
• Tory landlord and activist urges Labour to leave landlords alone
• Green Party proposes abolition of landlords

For ongoing updates, landlords can also refer to our Quick News Updates on Landlord Law.

Our Newsround will return next week with further developments affecting landlords and agents.