Following the long-delayed Renter’s Reform Bill being introduced in parliament in May, many landlords may be considering whether their rental properties remain compliant with standards and regulations.
One of the complexities is that the revised Decent Homes Standard, first published in September 2022, was excluded from the Bill due to ongoing consultations. Therefore, while the Bill is expected to be made law in October 2024, the government has yet to make any formal announcements, and the updated Decent Homes Standard is still a long way from becoming legislation.
In this article Tod Anstee residential sales summarises the current requirements and outlines what we anticipate changing for rental property at some point within the next two years when the Decent Homes Standard is finalised.
What Is the Decent Homes Standard?
It is important to reiterate that the Renter’s Reform Bill and Decent Homes Standard are different and approach distinct aspects of the private rental property market:
· The primary focus of the Renter’s Reform Bill is around evictions and tenancy security, such as removing Section 21 ‘no fault’ evictions but broadening the acceptable reasons a landlord might choose to serve a Section 8 notice to end a tenancy.
· The Decent Homes Standard concentrates on property conditions, maintenance and health and safety factors, citing 12% of rented homes that are not in a reasonable condition or have serious issues such as mould and dampness.
Another relevant point is that, in the consultation process thus far, the government has verified that around 79% of homes already let to private tenants are fully compliant with the current standards and require no further investment or upgrades.
The remaining 21% may need work to address areas such as thermal efficiency and fire safety provisions. Still, the intention is to introduce a cost cap, where landlords with a property that does need some improvements will be expected to contribute up to a maximum amount.
As yet, we do not know what the cost cap might look like or whether this will be included in the final proposals once all consultations have concluded.
Current Rental Property Standards for Private Landlords
The original Decent Homes Standard is aimed at social housing but began a review process back in 2020 along with the Levelling-Up Agenda, designed to help meet a target to reduce the number of property to rent in chichester considered ‘non-decent’ by half.
Currently, private landlords must comply with various regulations, but the Decent Homes Standard, as it stands, does not apply to the private rental sector and is not legally binding.
However, landlords are obliged to:
· Fit smoke and carbon monoxide alarms, and ensure they are tested regularly.
· Follow safety regulations in multi-unit properties such as flats.
· Allow Housing Health and Safety Rating System inspectors to attend if requested by the local council – this normally happens when a tenant reports a possible safety hazard.
Rented homes must be in good condition, which applies to things like having gas and electrics tested and certified and ensuring that maintenance issues related to bathrooms, central heating and the structure of the property are addressed swiftly.
What Will Change if the New Decent Homes Standard is introduced?
The immediate impact will be that the Decent Homes Standard applies to private and social housing, providing consistent regulations and legislation to make the requirements for property conditions equal across all parts of the rented housing market.
Minimum standards in the proposed Decent Homes Standard white paper include requirements to ensure properties are free of fire, fall and carbon monoxide risks, all of which are already covered by landlord responsibilities.
A change that may have an effect refers to bathrooms and kitchens, where these rooms need to be positioned in the correct place within the property and have sufficient heating and noise insulation.
Energy Performance Rating Changes
The government has also stated that it intends to work towards a target to increase the proportion of rented properties with an Energy Performance Certificate (EPC) rating of Band C by 2030. The existing energy efficiency standards, introduced in 2018 and revised in 2020, currently mean landlords need to take action to improve the energy performance of properties rated below Band E.
From April 2020, landlords cannot always let properties with this rating and are expected to spend up to a cost cap of £3,500, including VAT, on improvements to bring the housing up to the minimum standards.
However, exemptions apply where a landlord cannot bring the property to a Band E rating without spending more than the cost cap. More information about the plans to introduce a minimum Band C EPC rating is covered in our earlier article: What is the EPC Band C Rating and How Can Landlords Ensure Their Properties are Compliant?
The Proposed Landlord Rental Property Portal
The consultation includes a suggestion that the government introduce a Property Portal, where private landlords need to register their property and provide information that tenants can access that shows whether the property is compliant.
If the proposal proceeds, the portal will allow landlords to self-submit details, verifying whether the property meets the minimum decent homes standard and reporting exemptions. Penalties for submitting incorrect or intentionally misleading information could potentially lead to fines of up to £30,000.
Under the current system, local councils are responsible for dealing with any issues around safety hazards or complaints from tenants. They are required to enforce standards where a landlord refuses to comply with orders to address maintenance issues or carry out repairs.
The Decent Homes Standard proposal suggests that the responsibility will remain with local councils but make compliance a legal duty, with non-compliance possibly treated as a criminal offence.
While many of the details remain uncertain, and some of the elements of the proposed reforms will undoubtedly be changed before the revised Decent Homes Standard becomes law, the vast majority of privately rented homes will be largely unaffected.
In the meantime, landlords can check that their properties have the requisite heating systems, energy efficiency and upkeep to meet minimum standards – noting that only around 12% of all properties in the sector are thought to require additional work to bring them into good order.
For more information about either the Renter’s Reform Bill or the Decent Homes Standard, please contact Tod Anstee at any time.
Resource URL: - https://todanstee.blogspot.com/2023/09/update-on-current-rental-property.html
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