Many renters are feeling vulnerable, and some are facing homelessness because of mortgage rate rise and the cost-of-living crisis.
The much-anticipated Renters Reform Bill is on the horizon, and once law, should provide them with more protection.
While we wait for this key Bill, all these combined factors are leading to landlords selling their properties or upping their rent.
At Launchpad, we have seen a 42% rise in people coming to our drop-in service, many after being issued with a Section 21 no fault eviction notice. They tell our support workers that they are concerned about finding somewhere else to live, and coupled with the rising rents we are seeing, means they are struggling with bills and buying food.
Figures released by Ministry of Justice on Thursday 10 August show 7,491 no fault eviction claims were brought before the courts between April and June, the highest recorded number for six years in England.
Currently it is legal under section 21 of the Housing Act 1988 for landlords in England to give tenants just two months’ notice to leave without having to establish a reason why, a measure that can have a devastating effect on tenants’ confidence.
However, many landlords are selling their properties because their mortgages have gone up, and some are not happy about the Renters Reform Bill.
The Bill has been a long time coming, but it has only had one reading so far in Parliament. It is at its second reading stage, which should have happened this month, but hasn’t.
Even after a second reading, it still must go through a committee stage, a report stage and a third reading.
However, when passed, (we won’t say if), it should see better protection for tenants.
Some of the key points of the Bill include:-
- an end of Section 21s which mean landlords can no longer move tenants from their properties without a valid reason
- landlords no longer being able to ask for a tenancy deposit of more than one month’s rent
- more rights for tenants to keep their pets in rented accommodation
- landlords no longer being able to ban families with children, who are in receipt of benefits
- Rent increases being limited to once a year
- a commitment to a Decent Homes standard – an assurance that all homes must be free of serious health and safety issues
This might be too much for some landlords and, according to the National Residential Landlords Association (NRLA), one reason for the rise in tenant evictions is just this. Landlords selling their properties as they started to feel the pinch of rising costs and interest rates, and the prospect of additional costs when the Bill is passed.
Luke Richardson, from the Residential Lettings Team at Savills in Reading said the rental market had increased massively in terms of rental figures, especially the lower ‘core’ market anywhere up to £2000 per month properties.
“In some case we have seen increases of up to 30% in value due to the sheer demand of rental properties and with the lack of supply it is pushing the prices up. Due to multiple candidates per property, they are even, in some cases, heading over asking prices.
“I think the sales market is quite tricky currently given the interest rates and cost of living. It is forcing more people to consider renting than ever before as it’s a more affordable option in today’s market.”
Luke added that with the Renters Reform Bill a lot of landlords who may have only one rental or a very small portfolio, may look to sell with the changes planned but he felt that it was too early to tell locally at this stage.
Further reading:
https://england.shelter.org.uk/media/press_release/no-fault_evictions_by_bailiffs_up_41_in_one_year_