Renters’ Rights Bill (Previously Renters Reform Bill) (Oct 24 Update)
As we know, proposals to reform the private rental sector were announced in the King’s Speech in July 2024 with the aim of giving greater rights and protections to people renting their homes. This also included ending no fault evictions and reforming grounds for possession. Having been re-worked by the new Labour Government, the updated Renters’ Rights Bill was published on 11th September, with the expectation that proposed changes could be in place as soon as next spring, and as of the 9th October has successfully passed its Second Reading in the Commons.
Whilst nothing is yet set in stone, the proposed changes could see an impact on tenants, landlords and letting agents. However, the day-to-day reality of the bill will mean little difference to 98% of the market. The large majority of tenancies are usually ended by the tenant who needs to move due to personal circumstances. These are often connected to changes in personal relationships or the need to relocate and these motivations are unlikely to change.
Property owners will still be able to sell or re-occupy their property if required. Banks will still be able to repossess property and annual rent increases will still be permitted as long as they are in line with market changes.
The headlines are saying that the Renters’ Rights bill will enforce the largest changes in our industry’s history. However, the reality is that very little will change for landlords who have been providing well-maintained properties and secure tenancies, as long as sufficient time and clear consideration is given by the government when implementing the new legislation.
Read on the see the Renters Rights Bill at a glance:
Impacts to Tenancies
- Section 21 ‘no fault’ evictions to be ended with the change taking place as soon as possible. This is attracting a lot of media coverage and we are concerned how this could impact the way in which landlords are currently able evict problem tenants There is a mandatory ground if the tenant has been prosecuted for anti-social behaviour (ASB). However, without a prosecution, the anti-social behaviour will have to be proved. We know this is very difficult when neighbours are living in fear and local authorities and police are unhelpful. Also, with the current considerable court backlogs, this could become extremely problematic. We understand local authorities want landlords to deal with ASB and industry bodies are lobbying for a more sensible approach, so we will have to wait and see how this plays out.
- Fixed-term tenancies will be abolished and all tenancies are to become periodic. Tenants will be able to stay in their home until they decide to end the tenancy by giving 2 months’ notice. Although there are rumours this won’t be implemented because many tenants like fixed term tenancies!
- New grounds introduced when landlord circumstances change and the owner needs to reclaim the property in order to sell or move in. There will be a 12-month protected period at the beginning of a tenancy, increased from the current 6-months and landlords will need to provide 4 months’ notice to tenants.
- An amendment to the mandatory rent arrears grounds requiring 3 months’ arrears and an increase in the notice period from 2 weeks to 4 weeks. This is far from ideal and landlords may wish to consider landlord insurance that covers evictions and rent arrears, for all new tenancies. It is worth noting that it is possible to implement this for existing tenants who have a good rental history; please get in touch with [email protected] if you would like to discuss this aspect further.
Amendments to Rent Charges
- The ban of rental bidding wars will be introduced to prevent landlords and agents from encouraging or accepting rents above the listed rate.
- In-tenancy rent rises will be limited to a single annual increase of the current market rate. Landlords must give two months’ notice of a rise and tenants can challenge this via the First-tier Tribunal, who will determine what the market rate should be. This is how Pace currently manages its rent increases, as per Section 13 of the existing legislation, so any amendments will not result in a change for clients.
- Banning rental discrimination against tenants with families or those in receipt of benefits. Again, this is already banned, although perhaps not quite as clearly as new legislation may state.
Improving Standards
- Introduction of a Decent Homes Standard to the private rented sector with significant fines for failing to meet standards. There are already numerous regulations that relate to maintaining properties to a good standard. These range from the looser requirements of the 1980s Housing Acts, to the Housing Health and Safety Rating System in the 2004 Housing Act and other regulations since then. In our view, no additional rules or regulations are required, but merely implementing what already exists would be of benefit!
- Extend Awaab’s Law to private renting which will require landlords to address hazards in a specified time period or face enforcement action.
- Introduce a Private Rented Sector Ombudsman service which all private landlords will be required to join, providing fair and impartial resolution for all and reducing the need to go to court. We believe this is a good idea to give tenants of private landlords somewhere to turn – tenants using a lettings agent already benefit from this.
- Create a digital private rented sector database with information for landlords, tenants and councils.
A full guide to the Renters Rights Bill can be found on the UK Government website.
For now, our key focus remains on continuing to support landlords and tenants who may feel uncertain due to the ongoing changes.
The Bill now moves to the Committee stage, and we will keep you informed of its progress.
