Housing Update – August 2021

We are fast approaching 1^st October; the date set by the Government for residential notice periods to return to their pre-pandemic length. This date remains subject to public health advice and progress with the Roadmap, however given the progress made, it does seem likely that this reversion will go ahead.

For section 8 notices citing Ground 8(a) (substantial rent arrears), this will reduce the notice period from 4 weeks to 2 weeks. For section 21 notices, it will reduce the notice period from 4 months to 2 months.

The original announcement from May is silent on whether the definition of substantial rent arrears for Ground 8(a) will also be changed on 1^st October. If so, it would mean allowing landlords to commence possession proceedings once there are 2 months of rent arrears rather than 4 months (where rent is paid monthly). This change combined with the reversion in notice periods would make a lot of tenants vulnerable to possession proceedings at once. It therefore seems likely that the change to the definition of substantial rent arrears will be put off for a later date.

Tenancy Terms

Another issue receiving a lot of press is the increase in landlords asking for tenants to provide a guarantor or pay several months’ rent in advance at the start of a tenancy.

It is estimated that the number of renters in arrears has increased threefold to around 800,000 since the start of the pandemic. Landlords are now being more cautious when letting out properties and when agreeing terms.

The Tenant Fees Act 2019 stops tenants being asked for large deposits and administrative fees; but it does not stop landlords demanding up-front rent or the inclusion of a guarantor. Due to the shortage of rental properties in some parts of the country, landlords have the power to dictate these terms to tenants.

Labour’s Shadow Secretary of State for Housing, Lucy Powell MP said:

“It’s outrageous that landlords and lettings agents are trying to price people out of a place to live. Requiring months and months of up-front rent is wrong and brings the sector into disrepute. We have long urged the government to bring forward the Renters Reform Bill to tackle problem behaviour, yet they have failed to prioritise this legislation, kicking it into the long grass.”

A spokesman for the Ministry of Housing, Communities and Local Government spokesperson said:

“We introduced the Tenant Fees Act to stop rent from being ‘frontloaded’ at the outset of a tenancy, where tenants pay a higher amount for one or several months, then a lower amount after this. It is for landlords and tenants to agree the amount of rent that should be charged and how much should be paid upfront, but we do not expect landlords to ask for multiple months in advance.”

How Pinney Talfourd can help

Pinney Talfourd are experts in commercial and residential property litigation and can advise you on changes to the law so you are given up to date advice.

Please do not hesitate to contact Oliver-James Topping on 01708 463227 should you wish to discuss anything further.

This article was written by Oliver-James Topping, Solicitor in our Residential Property Litigation Team. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of August 2021.