The Renters Reform Bill: What’s In It And What Does It Mean For Landlords?
In this report we will take a look at the new Renters (Reform) Bill and at what it might mean for landlords, tenants and others in the lettings business.
Background to the Bill
The current government has been proposing to overhaul landlord-tenant law since at least 2019. The beginning of the process to do this has been delayed a number of times. After consultations, and a white paper ‘A Fairer Private Rented Sector’ in 2022, the Renters (Reform) Bill was finally published on 17 May 2023.
The Bill comprises five parts extending to 90 pages. As well as proposing the introduction of new laws it also proposes amendments to existing housing laws.
The Bill is designed to change the law in England only. (It also applies to Wales but only in several very minor aspects.) The government says the new proposed legislation will affect around 11 million tenants and 2 million landlords.
What the Bill is intended to do
The government says that ‘The Renters (Reform) Bill will support the government’s manifesto commitment to deliver ‘a better deal for renters’, including by abolishing section 21 evictions and reforming landlord possession grounds. The objective of the Bill is to ensure private renters have access to a secure and decent home and that landlords retain the confidence to repossess their properties where they have good reason to.’
The government are describing the Bill as the most significant overhaul of landlord and tenant law in a generation.
The Bill – in a nutshell
Here is a quick summary of the main measures the Bill is proposing:
There will be a new tenancy structure. All tenancies will be periodic.
Section 21 no-fault evictions will be abolished.
Tenants will be able to challenge poor housing and rent increases and do so without the risk of so-called revenge evictions.
There will be reformed possession grounds. It will be easier for landlords to repossess their property in certain specified cases.
There will be redress schemes and an Ombudsman to resolve landlord-tenant disputes.
There will be a new PRS database and portal which residential properties and landlords must be registered on.
There will be a new mechanism for raising rents which also allows tenants to challenge ‘above market’ rent rises.
Tenants will be able to request consent to have a pet, which cannot be reasonably refused.
What new measures are being proposed?
Here is more detailed information about the measures being proposed in the Renters (Reform) Bill:
Tenancy reform including the abolition of Section 21 evictions
Firstly, fixed term tenancies will be abolished. All tenants who would previously have had an assured tenancy or assured shorthold tenancy (AST) will move onto a single system of periodic tenancies. The rent period of these tenancies will not be able to exceed one month.
Tenants will need to provide two months’ notice when leaving a tenancy.
Landlords will only be able to evict a tenant in ‘reasonable circumstances’ as set out in the
legislation – more details about these in the next section. Specifically Section 21 so-called ‘no fault’ evictions will be abolished. (However, effectively, the current Section 8 powers will be strengthened to partly make up for the abolition of Section 21).
Landlords will need to provide a written statement of terms setting out basic information about the tenancy.
Purpose-built student accommodation (PBSA) is to be excluded from these measures. (But not conventional student lets, which are not mentioned.)
The reformation of landlord possession grounds
The Bill proposes reforming the grounds on which landlords can evict tenants and repossess their properties with the intention of ensuring the process is comprehensive, fair and efficient. The aim is to give security to good tenants while making it easier for landlords to obtain possession where their tenants are at fault. Additionally, landlords using these grounds will be able to obtain possession in court if they can prove the conditions applying to them have been met.
The Bill proposes expanding the discretionary eviction grounds to clarify that any behaviour ‘capable’ of causing ‘nuisance or annoyance’ is a ground for eviction. (Further proposals on how this can be defined are expected to be outlined later.)
A new ground for eviction due to what are called repeated serious rent arrears will be mandatory where a tenant has been in at least two months’ rent arrears three times within the past three years. The notice period for existing rent arrears will be increased to four weeks. The ground in cases where a tenant has two months’ arrears at both the time of serving notice and of the court hearing is retained.
The Bill proposes a new ground for landlords who wish to sell their property or move family members in.
When eviction procedures go to court there will be new faster, digital procedures.
There will be separate arrangements for supported housing, temporary accommodation for the homeless and accommodation tied to employment.
A new mechanism for increasing rents
Landlords will only be able to raise rents annually and up to current market prices, and they must give two months’ notice of the increase.
Tenants will be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber).
New rules on pets
Tenants will be entitled to ask for consent to have a pet. Landlords will not be able to unreasonably refuse such a request. If they do, tenants will be able to challenge this.
However, landlords will be able to insist on suitable insurance (or a fair charge to cover insurance costs) to compensate them for any damage caused by pets.
New compulsory landlord redress schemes
The Bill proposes the introduction of redress schemes which will aim to hold landlords accountable for their conduct and responsibilities. Landlords will be required to join a suitable redress scheme and there will be financial penalties for failing to do so.
Tenants will be able to raise any grievances they have with the redress scheme. The powers of redress schemes will include compelling landlords to issue an apology, provide an explanation, take remedial action, and/or pay compensation.
It is proposed that there could be a number of redress schemes to fulfil this purpose. There will be only one scheme to act as Ombudsman for the sector.
Local authorities will be able to take action against landlords who do not join a redress scheme or, who are expelled from one, including imposing financial penalties.
A new Private Rented Sector Database and Property Portal
The Bill includes provision to set up a new government-operated Private Rented Sector Database and a new digital Property Portal service. Landlords will be required to sign up and register all properties they let out or intend to let out. Tenants will be able to check that their landlords or prospective landlords are compliant with these arrangements.
Local authorities will be able to use these platforms for enforcement. They will be able to take action/impose penalties against landlords who do not register with these new platforms.
Very importantly the Bill does not give details of exactly how these new platforms will work. It makes provision for these details to be decided at a later date.
The creation of a lead enforcement authority
Local authorities will be responsible for monitoring and enforcing compliance with the new measures and imposing penalties for breaches. However, the Bill gives the Secretary of State the power to appoint a lead enforcement authority (or authorities).
This new authority’s functions will include providing guidance, information and advice to local housing authorities about how to exercise their enforcement functions under the new legislation. It will also be able to take enforcement action itself in some situations.
Other proposed measures
A previous government white paper also committed to some other measures. These included requiring privately rented homes to meet the Decent Homes Standard (which currently only applies to social housing). They also included making it illegal for landlords and agents to have blanket bans on renting to families or benefits claimants. It proposed increasing local authorities’ investigative powers, to help them target criminal landlords.
These other measures are not specifically covered in this Bill. However, the government say they are carefully considering how to implement these policies with the aim of bringing forward further legislation at the earliest opportunity.
When will the Renters (Reform) Bill become law?
The Renters (Reform) Bill will need to pass through the normal legislative process in the House of Commons and the House of Lords before it can become law. It is likely that a number of amendments will be made to it during that process.
There is no fixed timetable for the Bill’s progression through Parliament. At the moment commentators are suggesting that, if it progresses relatively smoothly, it is unlikely to become law before autumn 2024.
It should perhaps be borne in mind that the next General Election must be held by January 2025 at the latest. (But, where the government has the option, there is a tendency for UK General Elections to be held in the spring).
The Labour Party has previously proposed some completely different reforms to landlord and tenant law. So, should Labour win the next General Election, the whole situation regarding renter reform could change completely.
Summary: Action landlords need to take
Landlords will need to try and understand the new legislation that the Renters (Reform) Bill is proposing. They will need to follow any changes or amendments that are made to the Bill as it progresses through Parliament over the coming months.
Landlords will need to understand the new responsibilities, obligations, risks and expenses that the upcoming new legislation could place upon them. Specifically, they will need to acquaint themselves with the new tenancy structure, eviction procedures, rent review procedures, and the new compulsory redress schemes and database/portal schemes which they will need to join. They will need to be aware of the new procedures through which tenants could take action against them.
Over the coming months landlords will need to consider whether they wish to remain in the lettings market should the Bill become law – or whether they wish to exit it beforehand.
Landlords should take expert, professional advice should they require further guidance on how the provisions of the Renters (Reform) Bill might affect them.
