‘Feudal’ leasehold system WON’T be scrapped: Michael Gove backs off move to protect buyers as he unveils rental sector overhaul ending no-fault evictions and stopping landlords banning tenants with pets or children
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Michael Gove has backed down on scrapping the ‘feudal’ leaseholds as he unveiled a package to help protect renters.
The Levelling Up Secretary admitted that legislation being put forward soon will only tackle ‘abuses’ in the system rather than dismantle it altogether.
The signal came as Mr Gove declared that more than ten million renters will no longer face the threat of ‘no fault’ evictions or a blanket ban on pet ownership.
Under the Renters’ Reform Bill, it will no longer be possible to evict tenants under Section 21 of the Housing Act, which gave landlords the power to remove them without justification.
Britain’s two million landlords will only be able to increase the rent once a year under the legislation – and will have to give tenants two months’ notice for such hikes.
The measures have sparked concerns that many property owners will withdraw from the rental market and the housing supply crisis will deepen.
But landlords will also benefit from measures making it easier to evict irresponsible or anti-social tenants and recover their property when they need to sell it or move in a family member.
Levelling Up Secretary Michael Gove admitted that legislation being put forward soon will only tackle ‘abuses’ in the leasehold system rather than dismantle it altogether
Appearing at a Tory convention in Westminster last night, Mr Gove was challenged on his commitment to do away with leaseholds.
He has previously condemned the arrangements as ‘feudal’ and said ‘in crude terms, if you buy a flat that should be yours’.
Buying leasehold means you only own the property for a set period, and the freeholder retains control of the land. It is most common with flats, but has been used for houses.
Leases are typically between 99 and 999 years, but once they go below 75 years banks can be nervous about granting mortgages and people can have trouble selling.
Freeholders may impose restrictions on what leaseholders can do to the property, as well as charging ground rent and service charges for shared areas such as gardens.
Mr Gove said: ‘What we’re doing is taking some of the recommendations that the Law Commission and others have put forward in order to ensure that we effectively reduce leasehold to a homeopathic element in the UK property market.
‘It will always be the case in a country like the United Kingdom that you will always have little kinks or knots in the wood rather than everything being shaved plane.’
Mr Gove said he wanted to ensure the ‘many abuses’ that arise from leaseholds are done away with via legislation he intends to bring in.
Hailing his separate plans for the rental sector, Mr Gove said too many were ‘living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them’.
‘Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants, while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions,’ he said.
The proposals have been broadly welcomed by Labour.
Polly Neate, chief executive of charity Shelter, added: ‘The Renters’ Reform Bill is a once-in-a-generation opportunity to finally fix private renting. [It] must truly deliver change for renters when it becomes law, and it should be as strong as possible with every loophole closed, so that no renter can be unfairly evicted.
‘The Government must keep renters at the forefront to make sure this Bill has the teeth needed for real change.’
Landlords will also have to prove why any requests from tenants to have pets are unreasonable.
Owen Sharp, chief executive of Dogs Trust, said: ‘The new measures introduced are a potential game-changer for responsible dog owners who rent.
‘For too long, people living in rented accommodation have not been able to enjoy the benefits and companionship of a pet just because of the type of housing they live in.’
Critics suggested that scrapping no-fault evictions could make properties harder to rent for some tenants.
Matthew Lesh, of the Institute of Economic Affairs think-tank, said: ‘Landlords will inevitably be more selective about who they offer properties to and charge higher rents when they cannot quickly evict bad tenants. That is likely to disproportionately hurt those who are poorer, younger, and from minority communities.
Illustrative photo of residential buildings shows skyline from Lewisham Shopping Centre in August 2019. New reforms will protect renters from no-fault evictions by landlords
‘New eviction rules and burdensome regulatory standards will only worsen the rental property shortage and record-high rents. The housing crisis won’t be solved by fiddling with rental rules.’
Some Tory MPs have warned the legislation will drive landlords out of the market entirely.
Craig Mackinlay, himself a landlord, told The Daily Telegraph: ‘The reality is, landlords will abandon the market and we will have a very serious housing crisis on our hands. We have seen too much of a war against landlords.’
Ben Beadle, chief executive of the National Residential Landlords Association, warned: ‘Responsible landlords need to be confident that when Section 21 ends, where they have a legitimate reason, they will be able to repossess their properties as quickly as possible.
‘Without this assurance, the Bill will only exacerbate the rental housing supply crisis many tenants now face.’
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