In an unprecedented move, housing industry representatives have come together to write a strongly worded letter to Housing Minister Matthew Pennycook outlining their concerns about the Tenants' Bill of Rights and its potential to restrict access to housing.
Filter out tenants with bad credit history 
The group accepts that Section 21 foreclosures are coming to an end and says it supports measures to ensure all rental properties are of suitable quality, but limits prepayments of rent and provides housing benefits. The proposal to freeze the rate could exclude tenants with poor credit, fluctuating income, or unstable income, it said. In receiving benefits.
It would also disproportionately impact international students and overseas workers, they added.
“Prior rent restrictions, coupled with housing benefit freezes and a lack of sufficient rental housing, make it almost impossible for people with poor or no credit history to prove their ability to maintain a tenancy in the UK. This includes international students, workers from overseas, and people with fluctuating incomes in short-term or variable employment.
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“It is neither practical nor responsible for landlords to terminate the guarantees they seek when renting to someone who cannot easily prove their ability to pay the rent. These are the people who are most likely to.”
The signatories to this statement are: National Residential Landlords Association, British Real Estate Federation, Goodroads, Leaders Romans Group, Propertymark, Keystone Property Finance, Paragon Banking Group PLC;
The full text of the letter can be read below.
January 13, 2025
Dear Minister,
We write this article following the Government's publication of new Sections 13 and 14 of the Tenants' Bill of Rights. Taken together, we are seriously concerned that access to the private rental sector will be severely restricted for those who can afford it. With this in mind, we look forward to your responses to the following points.
The government's new Clause 13 prohibits prepayment of multiple months' rent. The desire to reduce the cost pressures faced by tenants is understandable, but how could they struggle to pass affordability checks to prove their ability to cover rent and retain tenants? Do you have one?
Additionally, new Article 14 will further undermine landlords' ability to limit risk by prohibiting landlords from demanding the first month's rent before signing a lease. Are landlords expected to accept applicants with poor payment histories, believing they will meet their obligations?
What happens to the tenant's guarantor when the fixed-term rental contract ends? Not many people are prepared to guarantee their rent indefinitely.
How will the decision to freeze housing benefit rates from April impact on claimants' ability to access this area, particularly given the bill's aim to address discrimination faced by benefit claimants? Or?
To what extent has the Government considered the impact that changing the way landlords assess risk will have on tenants who receive benefits or have reduced incomes or are unstable? This increases the amount of rent a tenant can accumulate in arrears. Similarly, if rent arrears occur due to late Universal Credit payments, the landlord will not be able to take back possession of the property. This is despite the fact that private landlords, unlike landlords in the social rent sector, have no right to know whether their tenants are claiming Universal Credit.
Given the above, what support will the government provide to households unable to access housing in the private rental sector due to the impact of reforms on landlords' risk perceptions? Those most affected are those who cannot easily prove their ability to keep their leases.
Furthermore, we welcome your commitment that the implementation of this Bill will not be finalized until two months after Royal Assent, and we look forward to hearing from you about what is needed to ensure the industry is able to respond to change. We appreciate the constructive discussions that have taken place with the Ministry.
However, taking these into account, and given the wide scope of the changes in the Bill, when does the Government expect to publish a roadmap outlining when and how it plans to implement the various elements of the Bill? Is it?
Tenants and responsible landlords deserve a smooth implementation with no cliffhangers. The government needs to clarify exactly how this will be achieved.
Regarding the justice system, we remain seriously concerned about the lack of a clear and purposeful detailed plan to improve the justice system for both tenants and landlords. On 11 September 2024, you told LBC radio that the government was working to ensure the courts were “ready” for an alternative to Article 21. Given this, how does the government define what “ready” means and what it actually looks like?
Furthermore, how does the Government intend to prevent the Property Courts from becoming overwhelmed with rent challenge cases?
We understand the ambition to make it easier for tenants to challenge rent increases above market value. However, there is currently no consistent recommended mechanism for tenants to first check whether a proposed rent increase is above market rate, meaning that only a real estate court can make that determination.
To prevent the courts from being overwhelmed, we believe that tenants should first be able to confirm from the Valuation Authority (VOA) whether the proposed rent increase is within market rates. This leverages VOA's expertise in rents in the local market and reduces waiting times for cases that require a court decision.
In Scotland, the Scottish Rental Services Authority, which has rental market duties similar to England's VOA, takes just five days to respond to rent decisions, according to a freedom of information request from the NRLA. By contrast, property courts took an average of 18 weeks to decide section 13 cases in England last year.
We welcome the opportunity to discuss these issues as a group and look forward to hearing from you. Perhaps your office could send you an email (email protected) to determine a suitable date and time for such a meeting. We look forward to your reply.
Sincerely,
Ben Beadle, Chief Executive, National Residential Landlords Association
Melanie Leach CBE, Chief Executive of the British Property Federation
William Reeve, CEO of Goodroad
Michael Cook, CEO of Leaders Romans Group
Nigel Tellington David Whitaker, Chief Executive Officer, Paragon Banking Group PLC
David Whittaker, Chief Executive Officer, Keystone Property Finance
Nathan Emerson, Propertymark CEO
