The Renters Reform Bill: November 2023 Update

The Renters (Reform) Bill has now completed its second reading in the House of Commons. In this post we will look at progress so far, at significant developments and changes, and at when the Bill is likely to become law.

The Renters (Reform) Bill – the story so far

The government has been proposing to overhaul landlord-tenant law since at least 2019, but progress has been slow so far. Following the publication of a white paper ‘A Fairer Private Rented Sector’ in 2022 the Renters (Reform) Bill was published this May.

What is the Renters (Reform) Bill designed to do?

The government says that the Renters (Reform) Bill will support their manifesto commitment to deliver a better deal for renters and ensure tenants have access to a secure and decent home. It also aims to ensure that landlords can still repossess their properties when they have a good reason to. The proposals apply to England.

Key takeaways from the proposals

Here are some key takeaways from what is proposed in the Bill. A more detailed explanation can be found in our previous blog post The Renters Reform Bill: What’s In It And What Does It Mean For Landlords?

Tenancy reform and reformed possession grounds

Fixed term tenancies or ASTs will be abolished and replaced by rolling periodic tenancies.

Tenants will need to give two months notice to leave their home. Landlords will only be able to evict a tenant in specific circumstances.

Section 21 ‘no fault’ evictions will be banned. A new evictions process similar to the existing Section 8 process will be introduced, but will be stronger and more efficient.

Restrictions on rent increases

Landlords will only be able to raise rents annually up to current market prices. Tenants will be able to challenge any higher increases in court.

A right for tenants to request pets

Tenants will be able to have a pet (but will be required to have suitable insurance) and landlords will be unable to refuse permission unreasonably.

The introduction of a compulsory redress scheme

Landlords will be required to join a redress or ombudsman scheme.

Tenants will be able to raise complaints with the scheme, which will be able to compel landlords to make redress if necessary.

The introduction of a PRS database and property portal

Landlords will be required to register their properties on an official database of rented properties and with what is described as a property portal. Tenants and local authorities will be able to access this information.

New regulations for enforcement of the rules and penalties for infringement

Something which has not received much attention in press coverage of the Bill are the proposed regulations for enforcing the new rules – and for penalising landlords who do not comply, or who infringe them.

The Renters (Reform) Bill proposes introducing further legal duties and restrictions on landlords. Breaches of these could result in a financial penalty as an alternative to prosecution. It is proposed that local authorities will have a statutory duty to monitor and enforce compliance with the new measures and for imposing any penalties. (These penalties will work in a similar way to those which can already be imposed for some offences under the Housing Act 2004.)

Penalties will be able to be imposed for a range of breaches of the law. These include (as perhaps might be expected) substantial breaches such as harassment or unlawful eviction. Local authorities will also be able to impose them for lesser breaches, such as a failure by a landlord to give the tenant a legally compliant written statement of the terms of the tenancy or a legally compliant notice to quit. They will also be able to be imposed where landlords fail to join the official redress scheme or fail to list their properties on the official PRS database.

In the first instance local authorities will be able to impose penalties of up to £5,000, and subsequently a penalty of up to £30,000 as an alternative to prosecution. Local authorities will be able to decide the amount they impose. Landlords will have a right to appeal to the First-tier Tribunal.

What the Renters (Reform) Bill didn’t include

What wasn’t in the proposals was perhaps as significant as what was included – almost. The earlier white paper proposed applying the Decent Homes Standard to the PRS, making blanket bans on renting to families or benefits claimants illegal as well as increasing local authority investigative powers. The Bill did not include these measures, although the government says it is still committed to introducing them.

What has happened since the Bill was published?

The Renters (Reform) Bill was introduced to the House of Commons on its first reading on 17 May 2023.

Since then stakeholders in the PRS (including landlords, landlords’ bodies, tenants’ bodies and campaigners and property lawyers as well as politicians) have had the opportunity to debate it – and air their views on the new proposed legislation.

Most stakeholders appear to agree that reform of the PRS is much needed, and are in broad agreement on the good intentions behind the Bill. However, there is considerable disagreement on whether this Bill is the right way to achieve them.

Generally, opposition politicians and tenants’ rights campaigners feel that the bill does not go far enough. Some anticipated that rent controls and the Decent Homes Standard would be introduced by the Bill.

Landlords and landlords’ bodies have mostly expressed grave concerns. Of particular concern is the proposed banning of Section 21 evictions – with some having fears that they will never be able to recover their property once a tenant moves in. The strengthening of the Section 8 process has been broadly welcomed. However there are concerns over how and if this will work well – especially when the current legal process often does not operate smoothly.

As the months passed by there was a feeling amongst some parties that the Bill would progress no further. However, the second reading of the Renters (Reform) Bill took place on 23 October 2023.

A major amendment – Section 21 evictions

One major proposed amendment to the Bill has emerged so far, albeit it could only be short-lived.

During the second reading of the Bill, Michael Gove, Secretary of State for Levelling Up, Housing and Communities, stated that a ban on Section 21 ‘no fault’ evictions would not be introduced from the inception of the new legislation.

The amendment led to a degree of relief from many landlords as it removed one of their main objections to the Bill – that it would make it very difficult to regain possession of their property in most circumstances other than a breach of the tenancy by the tenant. This relief proved to be short-lived though, as Gove confirmed the government is still committed to banning Section 21 evictions.

The Section 21 ban was not removed (officially at least) as a concession to landlords. The reason was largely due to concerns that the court system would be unable to cope with the type and volume of eviction cases under the new Section 8 eviction process. And that to press ahead with it now might derail the court system’s efforts to improve its procedures. Gove stated that a Section 21 ban would only be introduced when the justice system is ‘fit for purpose’.

Issues which have been mentioned as needing to be addressed here are the digitisation of the legal process, and a procedure for prioritising more serious cases where eviction is sought such as anti social behaviour.

This amendment may still offer some relief to landlords however as it could be many months or years following the introduction of the new legislation before a ban happens. It may not happen at all especially if the courts are unable to get themselves up to speed.

One other likely amendment to the Bill which Gove confirmed was a new grounds for possession for student landlords. (Concerns having been raised since the first reading that rolling periodic tenancies do not suit the student accommodation sector well.)

What happens next?

Following the second reading of the Renters (Reform) Bill the new proposed legislation now proceeds to what is called the committee stage.

At the committee stage a cross-party committee of MPs examines the bill clause by clause. They take in opinion from experts and interested parties and consider what further amendments should be made. They then debate, vote on and publish amendments to the Bill. The Bill subsequently proceeds to its third reading in the House of Commons and then the report stage before ultimately progressing to the House of Lords.

The committee stage is likely to be delayed slightly due to the King’s Speech on 7 November. Current forecasts suggest it will then commence immediately and could be completed in early December 2023.

Looking further ahead, commentators suggest that the earliest the Renters Reform Bill could receive Royal Assent (and become the Renters (Reform) Act) would be late spring 2024 or potentially autumn 2024. The earliest it could come into force would be around six months after Royal Assent. Even then, many of its provisions would likely not come into effect for at least six months for new tenancies and 18 months for existing tenancies – with a Section 21 ban potentially much later.

Summary

The publication of the Renters (Reform) Bill came as something of a surprise to some in the sector. Some also felt that following the first reading it would vanish perhaps never to reappear. So the second reading has been accompanied by something of a sigh of relief that the proposed changes to the law are now at least somewhat clearer, even if they are not all necessarily that welcome.

There is still much to be clarified however and many changes could yet be made. The committee stage of the Renters (Reform) Bill will be the next big stage stakeholders will want to keep tabs on. This is when any of the measures proposed could be amended or dropped. The Bill could look very different once this has been completed.

It should also be borne in mind that the next General Election must be held by January 2025 at the latest, and could be sooner. Parliament will have to work to a very tight timetable if the Bill is to become law by then. Even if that happens all its provisions are unlikely to be in place by that date. It’s not impossible that by this time next year, if not sooner, the PRS could find itself in a state of great uncertainty regarding the law under which it must operate.