How will Labour's ’Hardship Test' prevent evictions?

Reports suggest that the newly elected Labour government plans to introduce 'hardship tests' to make it more difficult for landlords to evict tenants. This proposal is said to be inspired by a similar system in France, where such tests have been in place since 2008. Housing Minister Matthew Pennycook is reportedly driving the initiative, who believes this approach could offer greater protection to tenants, especially those in financial distress.

Under the proposed system, tenants facing eviction must undergo a hardship test before any eviction could proceed. This would involve an assessment of their financial situation and housing options. If a tenant is found to have no viable rehousing options, they could appeal against the eviction. This measure aims to prevent evictions that would leave tenants homeless, offering a financial safety net to those struggling.

French Eviction Law:  'Hardship Tests' and rehousing options explained

The French model, introduced under the Right to Housing Act, allows tenants without rehousing options to appeal a landlord's decision to evict. This has provided a high level of protection for vulnerable tenants in France and is a possible solution to similar issues in the UK. The Labour government's proposal is expected to follow this model closely, making it nearly impossible to evict poorer tenants without ensuring they have alternative housing.

Pennycook previously attempted to introduce similar measures while serving as shadow Housing Minister. He sought to amend the Renters Reform Bill to include a hardship test, but the Conservative government rejected the proposal. With Labour in power, the government is revisiting the idea as part of its broader agenda to make renting fairer and protect vulnerable tenants.

Labour government policy on Energy Performance Certificates (EPCs)

In addition to the hardship tests, the Labour government is reportedly planning to reintroduce policies to improve housing standards. One such policy is the requirement for landlords to upgrade their properties to meet a minimum Energy Performance Certificate (EPC) rating of C. The Conservative government initially proposed this policy but abandoned it a year ago by then-Prime Minister Rishi Sunak.

How much is upgrading a property to EPC Grade C likely to cost?

Upgrading properties to meet the minimum EPC rating is expected to be costly for landlords. Estimates suggest that bringing a property with the worst rating, G, up to a C could cost around £27,000. However, experts believe spending £10,000 could bring 90 per cent of D-rated properties up to a C rating, while only 60 per cent of E-rated properties would meet the standard with the same investment.

Tenants could get the Right to buy under the Renters Reform Bill

The proposed rental reforms in Labour’s Renters’ Rights Bill include amendments that would force landlords to offer tenants the option to buy the property before evicting them to sell it. And, Landlords would also be required to wait for the first two years of a tenancy before evicting a tenant on the grounds of selling the property or moving in a family member rather than the current six-month period.

Renters Reform Bill:  Evictions for Rent Arrears likely to get harder

Another amendment in the Renters Reform Bill under consideration is the removal of ‘persistent rent arrears’ as grounds for eviction. Currently, landlords can evict tenants who have been in arrears for at least two months on three separate occasions. These proposals mark a significant shift in the balance between tenant protections and landlords’ rights. As the Labour government moves forward with these reforms, landlords across the UK will closely monitor the changes and assess how they might impact their property investments and management practices.