This post was originally posted on Property 118’s website and written by Emma Hayes, MD at Platinum Property Partners
Our previous blog post spoke about the recent Renter Reform Bill and as the government continues to work on the proposed Bill Recently a concern has come up that will have landlords and property professionals urging them to reconsider the impact of proposals in the white paper on multiple occupancy properties.
Although the Bill specifically exempts purpose-built student accommodation, there is no clear mention of excluding professional or student Houses in Multiple Occupation (HMOs).
Some of the measures set out in it will have a significant impact on shared households, if implemented, potentially deterring HMO landlord investment and denting the supply of such affordable accommodation for tenants.
HMOs are different from single-dwelling lets
Among the changes, set to come into force in 2023, are the abolition of Section 21 ‘no fault’ evictions, a ban on fixed-term tenancies and giving tenants the right to request a pet.
Whilst we’re all for a fairer PRS, where tenants can be assured that their accommodation will be of a certain quality and they won’t be evicted for speaking up, for professional HMOs, where three or more unconnected people rent individual rooms and share communal spaces, none of these proposals makes sense.
Section 21
A key concern is removing the ability to serve a Section 21. This could cause tenant distress and discomfort, particularly in instances where one tenant’s behaviour is not classed as ‘anti-social’ but can be intimidating and offensive to the majority of the household.
There has been one instance, for example, where a male tenant made unwanted advances to a female tenant. She was frightened and told him to stop, but he persisted and went on to steal her underwear from the washing line. Under the proposed changes, even if there are grounds for a fault-based eviction, there are two major problems.
First, the offended tenant must give evidence in court against the offender and second, they have to continue to live under the same roof as the offender, perhaps for six to 12 months whilst the case is pending.
Periodic tenancies
When it comes to introducing periodic tenancies, this not only removes any security of medium to long-term income for landlords in any buy-to-let property but will discourage HMO landlords, in particular, to cater for tenant requests.
As all our professional HMOs are fully furnished, it’s not unusual to receive specific tenant requests, e.g for additional bike sheds. But if that tenant were able to leave on two months’ notice at any time, it’s unlikely our landlords will risk the additional investment.
Pets in shared houses
Finally, there’s no way HMO landlords could reasonably consent to tenants having pets in shared houses. As well as dramatically reducing the appeal of a property to many tenants, some of whom may have phobias or allergies, it’s also unfair to the animals themselves. More importantly, the Renters Reform Bill does not clarify a crucial point.
The proposals state that landlords may ask tenants to take out pet insurance and that this will not be a prohibited payment under the Tenant Fees Act 2019. However, pet insurance only covers the health of the animal, so what the paper should actually state is pet liability insurance that may, or may not, cover wear and tear caused by pets.
For HMO landlords, having to scrutinize each insurance policy per tenant, then taking it in good faith that they will recoup costs that would be paid directly to the policy holder is not feasible.
HMOs are different from single-dwelling lets
Parliamentarians should realise that HMOs are different from single dwelling lets and that granting one tenant rights and taking away a valuable management tool from landlords is not risk free. The interests of other housemates should be balanced. Otherwise, in sensitive situations, the strong will oppress the weak and landlords will be almost powerless to help.
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