Another week in the property industry and another sign there is a General election on the way. The Government has announced that the Renters’ Reform Bill will get its second reading in Parliament before the end of October.
Sceptics believe the timing of the reading has been engineered to win the vote of renters, many of whom are looking to elect a ruling party that is sympathetic to the unique challenges facing tenants.
The detail, however, reveals that the current session of Parliament is coming to an end and a new session is due to start on 7th November. The Bill’s slow progress means a carry-over motion will be required and is, indeed, essential. This is because Bills that have not been passed by the end of the session in which they were introduced will fail.
The second reading is still considered an early phase in the Bill’s progress, with committee stage, report stage and a third reading all still to follow in both houses before Royal Assent can be given. Therefore, experts are suggesting any new mandates and changes to law are at least 18 months in the future.
So what happens during a Bill’s second reading? All parties are invited to discuss the contents. Although no amendments can be made at this stage, members can propose changes. The second reading concludes with a vote on the Bill. If the vote is lost, the Bill can’t proceed any further in its current format.
While there are many publicised aspects of the Bill, such as a ban on Section 21 evictions, a new Decent Homes Standard for private lets and an end to fixed term tenancies in favour of periodic tenancies, there are a number of proposed changes that move landlords deeper into the realms of discrimination.
The Bill seeks to address the matter of conscious and unconscious bias in a way that many landlords will find hard to digest. The most commonly detailed proposal is to make it easier for tenants to keep a pet. Landlords will be put in a position where they must consider and not unreasonably refuse a tenant application merely because the renter has a dog, cat or other domestic animal.
The Bill’s detail also reveals blanket bans on families with children and people receiving benefits will be outlawed. A court has already ruled that blanket bans of this nature go against the Equality Act 2010 but the Bill seeks to make these forms of discrimination illegal.
Such proposals have got the lettings industry talking in more detail about discrimination, the Equality Act 2010 and how the best applicant may be chosen in the near future. With each property to rent currently generating multiple enquiries – sometimes running into the hundreds – landlords and their letting agents will have to tread carefully when whittling down candidates.
In fact, landlords may be on thin ice if they filter potential renters at all. Bias should not be shown to anyone, taking into account age, gender reassignment, married status, living arrangements, being pregnant or on maternity leave, being a parent of school-age children, disability, race (including colour, nationality, ethnic or national origin), religion or belief, sex and sexual orientation, pet ownership status or source of income, including benefits.
Achieving a fair tenant selection process devoid of unlawful discrimination and not causing any offence will become more complicated after the Renters’ Reform Bill is passed. Landlords will need a fair, transparent and non-discriminatory tenant selection process – one that can withstand a report to a property ombudsman or even legal action.
Suggestions to achieve this include a blind application process, during which personal information is omitted; a clear set of criteria published upfront that every tenant should meet (based on elements such as credit score, income-to-rent ratio, rental history and references(; and the use of automatic screening tools during the initial application stage so there is no human bias.
So while there is no current worry over the supply of tenants, choosing the best renter to fill a property is becoming a minefield. If the changing nature of lettings has you reconsidering your future as a landlord, contact LandlordBuyer. We can discuss the option of selling your buy-to-let for cash – either with tenants in situ or with vacant possession. Need to know what your property or portfolio could sell for? Request a free, no-obligation valuation now.