Compliance / Redress / Section 21 / Section 8 / Pets / Possessions / Lifetime deposits / Fairer Private Rented Sector White Paper / Legislation

Q&A with Sean Hooker: "A Fairer Private Rented Sector" white paper explained

22 June 2022

Sean Hooker answers questions on the Renters' Reform Bill 'A Fairer Private Rented Sector' white paper and what it means for the lettings sector.

"This is the beginning of the process," says Sean Hooker, Head of Redress at the Property Redress Scheme, on the A Fairer Private Rented Sector white paper. "The reality is that this is not an oven ready proposal at the moment. It gives a bit more detail, it gives the direction of travel, but they've pledged to engage and discuss on individual points and issues where there might be unforeseen consequences. So please do not panic."

With the Renters' Reform Bill expected by the end of the current Parliamentary session, Sean Hooker and Goodlord's Director of Insurance, Oli Sherlock, talked through what the changes are and what they mean for the industry, in a recent Goodlord webinar. Here's the edited Q&A with the overview - plus, you can watch or listen to the full conversation, and find more information about the proposals, in the links below:

What's covered in this Q&A?

Periodic tenancies:

Section 21:

Timelines:

Pets in lets:

Property portal:

Decent Homes Standard:

Ombudsman:

Rent increases and deposits:

There were a few surprises in the white paper - one of them is the single system of periodic tenancies. What's been proposed for this system?

Sean Hooker: I think that this idea came from Scotland and Wales, to be fair. We didn't necessarily see that this new type of tenancy would be introduced. But, given the fact that the other administrations in the United Kingdom have gone down that route, I'm not entirely surprised that they've taken this view. Basically what they're looking to do is scrap the AST and the Assured Tenancy and merge them into a rolling periodic tenancy with no end date, which can be ended at two months' notice by both parties, but with the landlord having to provide a reason for the ending of the tenancy where a tenant will just be able to give the two months notice.

That is quite a fundamental change from the tenant's point of view, and you could say it's actually a benefit for landlords. The old section 21 only required one month's notice from a tenant. It now requires two months. The government has said that it's to allow a smoother transition and the management of voids on behalf of the landlord. So there's a nod towards the landlord and equalising the notice periods. So that's where they're trying to even up the playing field. Now, what sort of tenancies will all be included is a little bit ambiguous as well, because they are talking about renters, including lodgers and licensees for some of this legislation. But I don't think that they're going to go quite down the line of bringing in a single tenancy as the Welsh have done for every type of tenure. So we'll have to see how that actually develops.

Within a minimum of 12 months later, they'll look to retrospectively take that action on existing tenancies - is that correct?

SH: I think this is another nod to the devolved nations, because you've got a situation in Wales now where, when they introduce their single tenancies, if you time it right, you could get two years under the old system before having to introduce the new tenancy. What I think they're saying is that, yes, you can issue right up to the last date an AST, or in a short tenancy and, for six months, that would be the contract that would be in place. Then thereafter, it would revert to the new tenancy conditions. So, whatever you've got in that AST or a short tenancy, it will be overwritten. That's my reading of it, but I'm sure that lawyers will actually have a field day looking at this.

We need to get that clarified from them because if you look at it politically, I think that makes sense. I think they're going to prioritise section 21, regardless of whether that is the priority, I want to talk about that a bit later, because that's the political hot potato. If they don't get that delivered before the next general election, they will be battered by the other parties who have also committed to getting rid of section 21. So that's why I think that this is in there. Now, legally, whether you can override and assign a binding contract is another matter.

Oli Sherlock: There is clearly going to be a change in wording to the contract you're using, and off you go. The retrospective piece though, a little harder to envisage how that's going to play - something we need to watch a lot more closely as time goes on.

SH: Again that's exactly what they're going through at the moment in Wales, because they've got the Default Tenancy Agreement now, and that looks like that will be the contract. You've got to remember that, in England, there's no mandatory requirement to have a written tenancy agreement in place at all really. So this could be a way of the government saying they're going to have the model tenancy out there, and that could be the default that comes in place and overrides and supersedes any other agreement. So it's going to be very interesting how that pans out.

Does this now put to bed a minimum six-month or 12-month, fixed-term contract? Or, adversely, can a tenant ask for a fixed term contract?

SH: These are rolling tenancies and with notice periods being provided in the proposed legislation. Are they fixing the system for what people want or making a system that's going to be a blanket system over the whole thing there and people have to find mechanisms to accommodate what they need? So that's one of the other feedbacks there. So I suspect that there will be few exceptions to this. One of things that was the big clue that was in the white paper - and it's being picked up by those people specialising in the student market - is that generally the student market in the private renter sector is not exempt from this.

You are going to literally have to be purpose built and registered to the government and prove that you have accommodation that is only suitable for the student market to actually get any exemptions for overriding this tenancy agreement. The government's argument for that is that basically, "Although most students do want to leave after their academic year has finished or they finished their degree, some do want to stay on, maybe get jobs locally, go for postgraduate studies. Therefore, why should there be an exception for the student market?" So I think that's going to cause quite a lot of discussion with the government over that particular reason why they have not got specific student provisions within their proposals.

Under the proposals, the landlord cannot serve notice on a tenant for the first six months and the tenant can serve notice at any time providing they give two months worth of notice. Have I got that right?

SH: Yes, I think that's the interpretation of it. There was talk about there being fixed-term tenancies with break clauses at specific times, but I couldn't see that in the detail in the white paper. We both read it. We couldn't see that. But whether that's the intention, because they do have these model three year tenancies out there that nobody actually uses, I've not met anybody who uses it.

So, it's going to be interesting whether that's completely rewritten or they say, "That's how it will work." Because landlords are not going to go out there and say, "I want somebody to be in my property for a longer term. If they're only going to turn up and then leave two months later, then it's not going to work for me, is it?"

Does that mean the tenants have the ability to actually give notice to leave after two months of a tenancy?

OS: If they would serve notice when they moved in, on the basis of what that paper says, then that's my inference. What this paper is trying to do, is to give tenants more flexibility and the ability to get out of a property. One, if it's in a bad state of repair or causing potential harmful health issues, but two, to give the flexibility that they can be transient in a time of financial stress. That they're not held down to something they can't adhere to.

You then read the detail around the change to periodic, the notice periods in force, and they note in there the continuation of the minimum six-month period in which the landlord can't serve notice. They also note that a tenant can leave the property by giving two months' notice. The inference that I've taken from this is that, yes, the tenant does have every right to exit the property under the new periodic terms as and when they see fit, on the basis they give two months' notice. During those two months' notice, they would be liable for all the terms of the tenancy agreement as stated previously.

SH: I think that the devil will be in the detail. Of course, there will be far superior legal brains than mine working on this as we speak, as more detail comes out. I think the reality will be - I'm going to try to be positive as well as critical in this session - that the majority of tenancies will continue on as private agreements between a landlord and a tenant without a court being interfered. So people will discuss, they will say, "Well, actually, I only want to be here for a year or whatever."

Then there will be mutual agreements as and when the tenancies end, as they always have been. It's the technical notice periods that, in case it actually goes to court, that you have to be mindful of, but most of it will be, if you're communicating with your tenants, you will know that they're not going to be there for two minutes and just disappear. So I think it's getting that alignment for a landlord providing accommodation that the tenant needs and the tenant being the tenant that the landlord needs. Agents are going to be key to that. If this helps in terms of giving a flexibility to allow you to make sure you put the right people in the right property, then I think this is going to be positive. But if it's going to stop or be abused by bad tenants and bad landlords, then we need to actually make sure that we understand this.

What are they proposing for section 21?

SH: Effectively, for any notice period and notice you give, there has to be a reason, a ground, for getting possession of that property back. That's always been the system with section 8, where you have grounds that you give to get possession. But section 21, you never needed that. So, ongoing, you will need to find a reason for that eviction. In the past, they were the punitive reasons for section 8, but now there will be non-punitive reasons that you'll be able to serve as well. So we've discussed the student ones - it looks like there won't be a provision there for a student tenancy, which is going to be interesting, as we said. But getting the property back because the owner wants to move back into it, getting the property back because the owner wishes to sell the property, getting the property back because a member of their family or extended family want to move into it, are three of the areas that have actually been noted as been additional reasons to take that possession.

Of course, that has stimulated a huge debate about how do you improve that? What happens if you say that you're going to sell the property and six months later, you haven't? What happens if you say you're going to move back in and the next thing, you find that you've moved tenants in? So, there are concerns about that, but effectively they are talking about having a reason, that you have to provide that reason.

Now again, it comes back to the fact that most tenancies will end, as they normally do, naturally, because both parties have agreed the notice to quit, and they move out. It's only going to be when it actually lands on the doorstep of a court or there's a dispute on it, which again, we'll come back to when we have a look at the courts and dispute resolution. So I think for most of it, it will be fairly standard because you are basically looking at the form. "I have to give you this note. Okay, you want to move out? Here we go. I'll check that box and you can go."

How will they legitimise this piece of legislation?

SH: I'm assuming, or are we all assuming, that what they're saying is scrap section 21 and extend section 8 provisions. Is it going to be as simple as that? Because, under section 8, you have mandatory grounds that the judge has to give you possession if the tenants have breached or failed to comply with those conditions. From what I can see now, one of the big problems has always been that, say rent arrears, you had that situation where you got mandatory possession if there was two months arrears at the date that they presented to the court. If not, then there were discretionary grounds for persistent and late payments of rent. Reading and trying to understand the actual wording, is it now another situation that it's then up to the judge to decide on all cases where it comes to arrears?

OS: It sounds to me the section 8 powers are being maintained. Doesn't seem to be any changes to those powers. If the tenant's in arrears of two months or more, then notice can be served. The notice period is increasing from two weeks to four weeks. I fail to see how that aids landlords in that situation. But actually what they've tried to do, and it feels like a bit of a fault really, they note in the paper that actually they recognise there are times when tenants are playing the system. It just gets to court when they're paying £10 to get below the threshold. I accept that it happens. I'm not disputing that. I am disputing the mass in which it happens and the major problem it causes.

I would argue that dealing with the rent arrears in a more meaningful way, earlier on in the process, both through mediation at the very start and more simplistic ways to evict tenants if they are in more than two months arrears would be helpful. But what they're saying here, Sean, it looks like, is that three occasions where you are in two months' arrears across a three year period, you would have a mandatory ground to evict. Now that's helpful, no doubt. I get that. But I'm not quite sure it answers the point in which they were trying to answer, because we ran through a timeline where actually over a three year period, you could essentially still play that system. There's still mechanisms for a tenant to get around it. I don't think that has much teeth really when it comes down to being meaningful for landlords in the event where there's max arrears.

SH: I'd agree, Oli, if it wasn't for conversations that I've been involved with when we were speaking to the government who were looking for a holistic approach to this. Clumsily though that particular part of the white paper is worded, the idea is that what the government wants the emphasis to go from, especially when it comes to arrears, is from where there is a difference between a tenant who has fallen by hard times and into financial difficulty, and one that is playing the system. How do you square that circle that they now don't want somebody who is, because of cost of living or whatever, has gotten themselves into problems, being faced with homelessness because of that black and white situation. Protecting landlords from the situation - that they brilliantly did it over the pandemic - where they helped tenants to stay in their property when everything was falling around their ears?

I think that's where a lot of discussion will occur about how that will actually work in practice. Because absolutely, I think we've moved into an era now that the landlord has a duty to help a tenant in financial difficulty, whether right or wrong, but that's the way the government's rhetoric is coming. But not being taken for a ride by the charlatans that are out there and the horror stories that I've seen, that we've seen in Landlord Action, where £30,000, £40,000, £50,000 worth of rent arrears have being accrued and you can't get the tenant out for love nor money. I think a lot of discussion will be around that and guidance. That segues into that pre pre-action protocol, the mediation and the work that needs to be done before getting onto the doors of the court, and an emphasis on a landlord and a tenant trying to work mutually to deal with their situation. This, I very much support. But the government did bring in a mediation pilot, which was quite frankly a complete damp squib.

But now, if you've got the situation after a month or two months, you could start a process and the tenant has to engage with the landlord to try and help them to help themselves. Then I think that's really positive. To that holistic view, how you put out any legislation, I don't know.

OS: We as a business have proven that mediation, at the earliest phase, actually works, and it continues to be part of our process for our rent protection product. I don't see that changing. I'm all for supporting landlords to work with tenants. They did that through the pandemic. What I don't understand is putting a piece of legislation on the table to say, "Hey, look, we're helping here. If the tenant does this bad thing three times in a row, don't worry about it, get rid of them." But the mechanism in order to evict a tenant for rent arrears is two months worth of arrears and then a four-week notice. So a landlord is going to use that new point of legislation, because they're going to go, "Actually, given the constraints on me, I'm going to use the law and legislation I have to my powers to evict the tenant as quickly as I can, because this could turn into a real bill of arrears."

I note that - because the backdrop to all of this in my mind is the lack of structure and resources in the court and legal system - if the court and legal system was reliable, frankly, then this wouldn't be so much a problem, but I feel like landlords and agents are backed into a corner because they know that, once it gets past that point, you've drawn the drawbridge up, the tenant is now alienated, they're going to stop engaging. They probably know that at the moment, it's at least six, seven, if not more, up to 10, 12 months to go through that legal process.

Once you get past that point, the battle lines are drawn, it's over to the courts, and we all sit there twiddling our thumbs, waiting for something to happen. So this doesn't address in my mind, and not one part of the Renters' Reform Bill seems to address the problem we had in the legal system, the court system, which is disappointing, because I would've expected expedited powers to really help alleviate some of the stress that's already there that will surely continue through the cost of living crisis.

What will change from a legal perspective in terms of fulfilment and resource through the courts?

SH: They're not naive and they do realise that the resources need to be put into the court, but they haven't necessarily got those resources. If you look at a fairly recent proposal on their digital transformation of the court process, they've cut that back quite severely. Housing, fortunately, doesn't seem to be one of the ones that they're going to be cutting back on. So one thing that everyone's been calling for is a much easier digital solution for dealing with courts, and, especially on possessions, they are bought into the idea of pre-action protocol and that a lot of the cases can be solved by alternative to speed resolution and mediation.

However, that's not a magic bullet either. Although I'm a great advocate of mediation and alternative dispute resolution, and the success rates are high, and the costs are reduced - ultimately, you need bodies on the ground. We know, as the pandemic showed, that the resources, especially in terms of the hearing side of it, closed courts, judges are getting older, they've appointed new judges. It was put under strain. Now saying that, it's getting back to normal now. I think the levels are higher, but higher now than they were during the pandemic, but actually have not gone back to the levels they were before.

We've still got an issue with bailiffs. We've still got an issue with enforcement. All of these things are going to require resources. So yes, I'm positive that they're trying to think about this holistically, but ultimately it's going to come down to how much money is in the pot at the end of the day.

Will the bill come into effect around March 2023?

SH: That's their drop dead date to lay the bill again to Parliament. So that's the target, as far as I read into it. That's the latest date that they should be presenting a bill to the Parliament. So in theory, they could do it sooner, but they've given themselves up to March to do that. So the way I would visit it is that there'll be a couple of hard months of round table consultations, dotting the Is, crossing the Ts, getting feedback and seeing the consequences, followed probably by a big announcement in September that the bill is coming and what's in it. Then, by the first spring session of the winter-spring session of 2023, they'll lay the bill and hope that they've ironed out a lot of the problems or the possible amendments, because we have to take into consideration that any Parliamentary bill is subject to amendment.

We've already seen movements from people like Shelter wanting to extend the notice period for landlords to three months, rather than two months. There's talk about rent control and moratoriums and all sorts of stuff there that you're getting from the opposition parties and the tenant representative groups, to say, "Well actually, we are in a crisis, so we need action now." So the government is going to need to balance that. Eddie Hughes said as far as he can see that most of the people in Parliament, most of the parties in Parliament, will be generally happy with all of this. So it shouldn't be controversial, but it will be. Legislation does get bogged down on small things. You will remember the tenancy deposit period during the Tenant Fees Act that went on and on and on. It went for five weeks, six weeks, four weeks, three weeks, every week until it actually settled down. So there will be those situations where Parliament can get bogged down in legislation.

Do you think the bill will be pushed through, regardless of any governmental change?

SH: I think the likelihood is that it will definitely happen, not least because even if there was a change of leadership of the current government, Michael Gove is leading the levelling up agenda, and this is their key policy. If you thought 82 pages of reading the white paper on renting was a hard slog, reading through the details of the levelling up, which is 174 pages, but actually covers a whole host of other things there, you could see that they've invested a core amount of their political capital into these policies. To be fair, you could only see if the opposition tried to one man upmanship, rather than dilute it.

What is the bill proposing for pets?

SH: We know, following the Tenants Fees Act, that deposits were capped and that fees were banned. The dilemma that came out of that was that, if you were a landlord and your tenant wanted pets, you were offered less protection from damage by that pet due to that legislation. So you were disadvantaged. So why would it be in your interest to either encourage or to offer pet friendly properties? That went down like a lead balloon in the tenant world, because we all know that pets are highly beneficial to your standard of living. The lockdown showed that. So there was a campaign that basically said, "Either undo the Tenant Fees Act, allow the landlord to take an extended pet tenancy, or allow a landlord to protect themselves by getting some form of insurance to protect themselves against pet damage." But essentially the tenant really should contribute to that.

The government has listened. From their positions of saying, "No, we're not touching the Tenant Fees Act. We're not going to amend that," they now promise to look into delivering this to the extent that they're not going to allow pet deposits, but they will allow some form of back charging for an insurance policy to protect the landlord. Whether that's going to be that the tenant contributes to the landlord's policy, or they get their own policy out there, but it becomes a condition, the devil's going to be in detail, because conflicting legislation is never a good thing. If one part of the law says one thing and one says another, then you're going to get conflict.

OS: Picking through the tone of the fee ban versus the new suggested legislation, I'd be very surprised if there's allocation of costs from the tenant to the landlord. That feels messy and hard to point to where the value is. I think it's more likely that there will be a mandate where a pet is in the property. One, what constitutes a pet. A goldfish versus a lama? Are they the same pet? They'll get into detail there. But I think it's more likely that, if there's a pet in the property, then the landlord is able to mandate the tenant takes appropriate insurance out to protect the property from damage from that pet. I'd be surprised if it was any other way around than that - but, again, the detail of what constitutes a pet, the wording says that you can't unreasonably decline a tenant with a pet in the property. That "unreasonable" phrase I think allows for interpretation. So it'd be interesting to see how that is interpreted.

I don't think any of us disagree with the idea that tenants being afforded the luxury of home pets in their property is a luxury in itself. I think we also completely agree that landlords should have the right provisions and protections in place. So this feels like a sensible outcome in many respects to me, on the basis that the detail is a common sense approach.

If a landlord owns a flat, will the new rules around pets still apply?

OS: My understanding is that this isn't dependent on your property type. If you're renting a property, then you can't reasonably decline the tenant's eligibility to have a pet, but you can mandate a level of insurance to protect any damage to that property. There's been no [indication] from what I've seen, that it defines properties like flats, for example, to not be accessible to pets versus detached properties.

SH: I think you've got to keep the dialogue open. You can't have a prohibition, straight ban, but of course you could quite easily argue that keeping a Great Dane in a one bedroom studio flat on the 31st floor of a tower block isn't necessarily the wisest thing to do. But you can't have the complete ban. It's the same with children, saying, "No, you can't have blanket bans on children and people on benefits," - the latter one I would probably have a whole seminar on its own on that one.

In terms of joining all these things together, there's going to be a tech-powered property portal for landlords. What is the property portal and how do you think this could be delivered?

SH: Essentially, when I read this, my first reaction was, "Oh, well, that's a long way round of calling something a register, isn't it?" The [stakeholders] admitted to us that the word "register", they felt, had connotations of cost and control over landlords that were not positive. That really the objective of the register, as it essentially is, was to actually achieve an objective of better homes rather than be a big, long list. Either half of people don't actually bother to sign up or there's no enforcement on it. So they've taken it and the principle is now that the property is going to be the focus, which makes a lot of sense because landlords change, both physically and as entities, properties are on the market for some period of time and then come off the market. And if you're trying to manage a landlord register. It's quite a tedious thing then to do in terms of getting it successful.

But if you say, "Well actually, it doesn't move, it's a property. A property sits there." If that's on a register, a portal, and we have details about the condition and type of that property, then you can also say, "Well, actually, what are the main obligations of the landlord to provide a safe, warm, secure property for a tenant?" We can monitor it that way rather than concentrate on the landlord. So, that's the theory behind it. That's why they keep saying it's going to be more than a register, and it's going to be based around the principles of Decent Homes. We know that the Decent Homes was brought in for the social sector. Whether that's been highly successful is a debatable point.

However, the Decent Homes Principles, from what I can see, is to provide the standard and quality of homes, as well as them being safe and secure. So it's beyond repair issues and hazards. It's the holistic experience of that property. That sounds very esoteric, and how you're going to measure that is going to be where [there may be] problems. What do you deem as being a decent home that's providing the utility that is needed? So one example is providing a kitchen, a modern kitchen, that is adequate for the needs of the tenants. That's one of the decent home standards. It goes beyond the fact that the washing machine or the cooker may be dangerous. It's whether it's adequate and up to standard. Even now, whether it's energy efficient. So it's a bigger list, a bigger commitment than what we probably got with the health and safety stuff.

Who will have access to the portal and what information will we see on it?

SH: The government should control this because, delegated out to a third party, that sort of data, it's problematic. However strict the criteria and as decent a guardians as we all are with data that we handle on behalf of the government and our clients, ultimately, the safest bet would be to have it as a single source of data which the government would control, but has universal access to third parties to provide that information. So for example, it's not beyond the ken of modern technology to incorporate electrical safety and gas safety information, deposit information, insurance information, all of these things there. In modern times, we do now have these universal databases that communicate with each other. The DVLA, the Right to Rent databases. But that makes sense for the government to take ownership of that and the rest of us to have access to that for our purposes, that will help the delivery of the services.

OS: I completely agree. I don't know if anybody has used that new passport process online. I don't actually know how new it is. It was new to me. It's a government owned piece of software, and it works brilliantly. So if the uploading of documentation, for example, and the recording of data and storing of data can be as simple as that, and it's based around the property itself, utilising that to then feed everything off. Then it makes sense as a next step for our industry to have this data and a data source where everything is pulled together. I think that has massive advantages across the sector.

Will each property have to be registered if the same landlord owns, say, four properties?

OS: I think they would, under the current suggestion. It will be based around hopefully in the future using the UPRN, the Unique Property Reference Number, for each property, and feeding off that I'd imagine in time to come.

SH: It's the property registered first, and then the beneficial owners and landlord and everybody else, it would be associated with that. I've yet to have a detailed conversation with the government from my perspective, but I did see one of the lead civil servants on Friday at the Chartered Trading Standards Institute conference. I said, "Well, look, we need to look at rent to rent and incorporated companies and everything else, in terms of making sure that you've got a holistic picture of the rental market out there." Because it does adapt, but the property itself doesn't move - well, unless it's a caravan!

Will the Decent Home Standard supersede HHSRS or Fitness For the Human Habitation Homes Act in 2018?

SH: It goes beyond, I think, because it takes into consideration that you were going to find a cooker that's leaking gas is definitely going to be a category one hazard, but one that takes four hours to cook a dinner and use twice as much energy wouldn't necessarily fail health and safety, but isn't really a decent provision for a kitchen.

Under the Decent Homes Standard, does that mean that landlords will now have to supply white goods to the property?

SH: I would say that if it was a furnished property, you'd have to provide white goods to the standards of the Decent Homes Standard, but if it's unfurnished, no.

OS: You see landlords extremely reluctant to provide any appliance where they don't have to, on the basis that they won't be using old goods here. They're going to have to be up to date, etc. So it will be interesting to see that if we are right on that, what the knock on effect of that is, and what landlords' view on that is.

A private renters ombudsman to arbitrate disputes has been proposed, with a single point of control. Talk us through the changes here and how you think that's going to work.

SH: So this is probably where I will have my own questions. We are a redress provider for letting agents. We are undertaking a trial with the NRLA to extend that to their landlord members. We have almost 6,000 voluntary landlords on that scheme who are, along with the TDS and NRLA, engaging in this pilot to see if we can get a workable landlord redress process up and running. However, it has been long in the alternative dispute resolution world advocates of only providing a single source of ombudsman or redress services, the most conducive way to provide a clear and unambiguous service. In a lot of sectors, they do only have a single ombudsman.

The problem we've got with our sector is that we are complex. It's not just about landlords. It's about letting agents. It's about a whole host of other people that are involved and engaged in the whole of the property market. I've always taken the view that a single one-stop shop is not the entire answer, because it's such a complex area. What I'm a bit perplexed about is that we already have two very successful redress schemes for letting agents, and that 40% of properties out there have some involvement with a letting agent in some shape or form, that we now have a situation where you have to be a member of two redress schemes for the same issues. Does that not make things more complicated, rather than having a holistic approach to the complaint?

I don't think this is 100% set in stone in terms of how they're going to deliver this, because I think you can square the circle of having a single authority ombudsman, but I would want to extend it across the whole of the sector, driven by a single access for a complaint. So if that complaint is a combined complaint between the duties and issues of a landlord and the duties and issues of a letting agent or an estate agent, then you can deal with the whole thing holistically. Because the customer doesn't see a difference.

They don't see a difference between the letting agent and the landlord, if it's a tenant. Until I've got a problem, I don't want the landlord saying nothing to do with me, go see your letting agent, and vice versa. So I think the single ombudsman concept should be about treating a complaint as a single complaint. I won't say any more than that because, to be fair, I have quite a vested interest in this.

Do you see this as a rebrand, and the process will continue as it is now?

SH: No, because I think the reality is that it's beyond that. I think the scale now of bringing it in for, what, 4 million odd landlords, into a process that few of them have been engaged in in the past, is a huge undertaking. Because this is going to include not just the landlords who self-manage and treat this as a profession. So they actually do the work that letting agents do. It's going to include all of the landlords who are under a letting agent, and that will include the ones who are living overseas, that live in different parts of the country.
I fundamentally agree that this is the right direction. I completely understand that you don't want 30 or 40 different organisations trying to do the same thing. However, how are you going to deliver this in a meaningful and practical way? If you think about the way it's going to be dealt with, and the issues that you're going to deal with that are specifically for landlords, these are not issues that you can wait six, eight, 12 months to deal with, in a backlog. You're going to have to deal with these almost immediately.

Do you think that the government is biding its time to come back with more detail on lifetime deposits?

OS: Lifetime deposits was a key point in the anticipation of this bill. It was mooted around by the government through different means - and, surprisingly, formed very little of this bill itself.

In fact, I'll read the line out. "We'll work with industry experts to monitor the development of innovative market led solutions to passport deposits." That is the headline. "This will help tenants who struggle to raise a second deposit to move around the PRS more easily and support tenants to save for ownership." That's as much air time as lifetime deposits really gets in the bill, and it's as much detail as we've got.

SH: I think that they have to give a nod to the fact that this was an initiative from the Prime Minister himself, Number 10, and it was announced that this was the issue they felt was one of the affordability issues for a tenant, being deposits. Personally, I think that they got completely the wrong end of the stick, that the deposits and affordability are not as linked as some people have made them out to be. Yes, it's an initial cost, and finding that money is an issue. And yes, there are tenants out there that do find transitions between two properties for a very short period of time a burden that they need to find that money. That was the main solution.

I think I would want to have seen, if you were going to look at tenancy deposits, them squaring some of the more important elements of it. If this is hugely improved, the speed in which the deposits are returned. From 15 years ago, when that could take anything up to a month, is so much quicker. The acknowledgement that there is a no-deposit regime out there, but that should be on par with a physical deposit or absolutely no deposit or insurance whatever.

Thirdly, the policy was announced before the working group had actually even concluded. They've actually released the consultation, they're releasing the document on the deposit working group as part of this process. When the details were looked at, and the fact that it would involve possibly loans, insurance, or whatever - the financial implication, the risk, and the applicability issues that anybody who works in insurance or banking deals with on a regular basis, were not as simple as just having a passport. I think a modified situation will come out of that and we may hear something down the line - but I don't think it's their priority now.

OS: No, and it doesn't seem that way. I think, if anything, we may get to a stage where the government endorses X amount of number of schemes in the same way they're done with deposit protection. Say these are verified lifetime deposit schemes, for example. But the wording in this paper is clear. This is going to be a "market-led third party process". I don't see this as a priority and may well be left for a little while longer while the government works with the third parties in the sector. But it is an interesting space to watch.

The powers around rent increases are going to change under the Renters' Reform Bill. What does this mean for landlords and how are they going to be able to increase their rent should they want to?

SH: This was all very ambiguous, wasn't it? [...] There are provisions out there for dealing with rent increases, and powers that the tenant can have if unfair rent rises are coming into place. Whether those powers are actually easy to access, etc, that may be the issue. But I asked the man, "Do tribunals frequently up the amount of rent asked by a landlord?"

So if a landlord goes and wants to put up the rent by £200 a week, and the tenant takes them to the tribunal, and then the tribunal says, "Oh, not only do we think that £200, let's make it £300." I'm not aware of many cases where that actually happens. On the whole, the tribunal will look to have a fair look at the market rate. Now that's the issue. What is the market rate? I think this is where the big debate's going to be. You're not to expect landlords to rent out properties at a loss, or letting agents to encourage properties to be rented out where the landlords are not going to make money.

What are the positives in the new proposals for landlords?

OS: Arguably in this, there aren't huge positives. There's maybe a burden of cost, which then could add to the rental amount. That isn't the purpose of this bill, but I could buy an argument that says some of these measures are going to add more cost to landlords and therefore it's going to support rent increases. I think the market is doing that anyway at the moment, given the lack of stock and the surge in demand of tenants.

But ultimately, it doesn't feel like a change. You've got a yearly process of reviewing the rental amount. If the tenant doesn't like it, they can go to tribunal. They could do that anyway. It doesn't mean that section 13 is going to be used more thoroughly than it has been this far. That's really on the basis that tenants are aware they can go to tribunal in the first place as well. So I don't think this feels like a huge material change, to me anyway.

SH: I think what they might end up doing is in the model tenancy, strengthening that rent increase grounds to be more specific. They talk about unreasonable and vague tenancy terms on rent reviews. So whether say that you can have a rent review clause, but it has to reflect X or Y, which is what people were talking about, without going down the rent control route, can you have rent review clauses that are fair? That's the point. A non-prescriptive. I think what the government's tried to do is say, "Yes, we want to make sure that rents are not controlled, but are modified or moderated, but we don't want to go down rent control."

I think that's where they've got themselves caught between a rock and a hard place on the political side of it. They want to go and say to the organisations out there that we are doing something to protect tenants against the increasing percentage people are paying in rent. However, we don't want to do rent controls because we don't believe they work.

OS: It's going to be very interesting to see how they level this with the wording of the legislation. Also what the tribunal will then look at in terms of what constitutes fair increase and not fair increase and how they acknowledge market rent. If you look at how changeable market rents have been in the last couple of years, for example, the majority of the market is behind the pace actually, I would imagine, rather than ahead of the pace. It may be that it puts more emphasis on a rental increase. I know that's something that agents and landlords work closely together on, but we've got to remember that the majority of landlords live outside of that relationship.

Please note this is intended as a guide only and is not exhaustive. Read more on the white paper at gov.uk.
Compliance / Redress / Section 21 / Section 8 / Pets / Possessions / Lifetime deposits / Fairer Private Rented Sector White Paper / Legislation
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Further reading

What are Labour's plans for the private rented sector?

Renters (Reform) Bill: Your complete guide

Your guide to section 13 and rent increases in the private rented sector