The Renters' Reform Bill (RRB) has been the subject of debate and speculation amongst landlords and agents ever since its early incarnation as a government white paper on “a fairer private rented sector”. The bill itself was published in May 2023 and sets out to fundamentally reform the private rented sector, with the rights of tenants chiefly in mind. This is the most significant legislation for the PRS in a long time, so it’s crucial for landlords to understand it and get prepared. This article will bring you up to speed on the key facts.
1) The end of Section 21 evictions
This has grabbed many of the headlines on the Renters’ Reform Bill, to the extent that the abolition of so-called ‘no fault evictions’ has almost become synonymous with the legislation itself. But what does this mean for you? Section 21 was introduced with the Housing Act of 1988 and has provided landlords with a simple, flexible, and accelerated means for recovering possession of a property, because it does not require a specific reason to be provided or attendance at a court hearing. Checks and balances have been implemented, to protect tenants against unfair or incompetent landlords, but these measures seem to have been deemed insufficient and the whole process will be abolished.
With the loss of Section 21, landlords will be left with Section 8 as the primary means for recovering possession. This is less straightforward, because it requires a reason or fault to be selected from a list of available “grounds” under Section 8, which need to be presented to a judge at a hearing if the tenant does not leave when served notice. Some of these grounds are mandatory, where the judge has no option but to grant possession, but others are discretionary, which gives scope for a decision on the facts of a given case. The RRB mitigates against the removal of Section 21 by adding new mandatory grounds under Section 8, for circumstances where the landlord plans to move into their property, or where the tenant has been persistently in arrears. The government has also proposed widening the definition of anti-social behaviour, to make it easier to recover possession under this ground.
2) The end of fixed-term tenancies
This is another major reform that will have significant practical consequences. We have all become familiar with Assured Shorthold Tenancies (AST’s), which start with a fixed period (6 or 12 months) before continuing on a periodic or month-to-month basis. During the fixed period, tenants cannot choose to exit their contract and landlords cannot evict them without fault under Section 21.
The RRB will make all tenancies periodic from the start, removing the “shorthold” element, leaving "Assured Tenancies". In practice, this means that tenants will be free to give notice to leave from the start of their contract, subject to a two month notice period. Combined with the removal of Section 21, this very much shifts power to tenants, by granting them increased security of tenure at the same time as increased flexibility to leave. The end of fixed periods also raises major questions for student landlords, who rely upon fixed-term (12 month) AST’s aligned to the academic calendar.
3) Monthly rent periods
Landlords will only be allowed to charge rent on a monthly basis. This reform will make it impossible to charge several months' rent up front, which is usually done to reduce the risks of certain tenancies, such as international students who have no income or UK guarantor.
4) Rent increases
The RRB will ban rent increase clauses in tenancy agreements. The only method for increasing rent mid-contract will be to serve a new formal notice, replacing Section 13, which will double the current notice period before the increase takes effect to 2 months. During this notice period, tenants will have the opportunity to challenge an increase through the First Tier Tribunal. This reform is partly designed to prevent “back-door” or "economic" evictions, where excessive rent increases force tenants to leave.
5) The right to have pets
The RRB will create an implied right for all tenants to have a pet. It will still be required for tenants to ask permission, but this cannot be unreasonably withheld by landlords. Landlords will be able to insist on pet insurance to ensure tenants have the responsibility and means to repair any damage.
6) PRS Ombudsman
All private landlords will have to register with a new PRS Ombudsman. This will function as a redress scheme for resolving common disputes more efficiently than the court system. You will need to register with the landlord Ombudsman even if you have appointed a letting agent.
7) PRS Portal
The government will create a PRS Portal with information to help landlords understand their legal obligations and demonstrate compliance. In practice, the chief purpose of this will be to function as a public register of landlords, with information on any housing-related offences. Each landlord will be given a personal tracking number that must be included on property adverts, enabling tenants to research potential landlords before starting a tenancy.
8) The Decent Homes Standard
The Decent Homes Standard, which currently only applies to the social housing sector, will be extended to the private rented sector. This will create a regulatory framework for the safety standards and general condition required in all privately rented homes.
9) Increased Local Authority Enforcement
Alongside the drive towards better regulation there will be a corresponding increase in enforcement. Most significantly, Local Authorities will be required to report on their enforcement activity and even granted the power to enforce PRS regulation outside their own region.
10) Anti-discrimination
It will become illegal for landlords to ban tenants because they have children or their income includes benefit payments.
The RRB is due to have its second reading in parliament shortly and may undergo further revisions following parliamentary scrutiny. But there is already considerable momentum and support behind this bill, on both sides of the House. It's clear the PRS will become an increasingly regulated sector, whichever party forms the next government, with landlords treated as professional housing providers subject to high standards and enforcement regimes. This is a positive general direction, provided the rights of landlords and their important contribution to housing is always recognised. The RRB raises some unanswered questions in its current form, which we will look at in a separate article.
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