Renters reform bill and how it affects landlords

In recent years, the private rental sector in the UK has experienced remarkable expansion, offering millions of people a place to call home. However, this growth has been accompanied by a multitude of challenges that are no longer being ignored. From sky-high rent hikes to substandard housing conditions and inadequate tenant protection, the Renters Reform Bill aims to tackle these issues head-on and foster a private rental sector built on fairness, transparency, and enhanced tenant security.

What is the Renters Reform Bill?

Introduced to parliament by the Government on 17th May 2023, the Renters Reform Bill seeks to improve the rental sector for both landlords and tenants alike by introducing vital changes such as more secure tenancies, improved rights and responsibilities for both parties, and fairer rent increases.

The Renters Reform Bill promises to:

• Make it more difficult to evict tenants.
• Provide more opportunities for tenants to have pets.
• Push landlords to comply with the Decent Homes Standard.
• Make it illegal for landlords to restrict the letting of properties to renters on benefits.
• Force landlords to enrol in an ombudsman scheme.
• Ensure greater tenure security by abolishing Section 21 ‘no-fault’ evictions.

If passed, this Bill will provide a better experience for both 11 million private renters and 2.3 million landlords in England. These changes will bring greater security and stability to both landlords and tenants – allowing for healthier and more sustainable rental relationships, while ensuring landlords maintain certain rights to possession of their assets.

When will the Renters Reform Bill be introduced?

Although the Renters Reform Bill was first proposed in 2019, it has not yet been introduced to parliament. There is no set date for when it will take effect; however, many anticipate it will be passed and implemented in October 2024. It will be reviewed by peers and MPs and go through multiple stages in the House of Lords and House of Commons before becoming law.

How will the Renters Reform Bill affect landlords?

By protecting renters from unfair practices and allowing for more security of tenure, this Bill will be a major step forward in securing the rights of renters. It will, however, change the relationship between tenants and landlords, and it is vital to understand these implications.

Abolition of Section 21:

The Renters Reform Bill aims to eliminate 'no fault' Section 21 evictions, giving tenants more security and landlords greater confidence. The Bill will introduce periodic tenancies without fixed end dates, replacing fixed-term tenancies.

Once the Bill has been implemented, new tenancies from that point on will be governed by the new system, while existing tenancies will transition at least 12 months later. When tenants want to vacate the property, landlords will require two months' notice, allowing them to recover the cost of finding a replacement tenant and avoid long void periods. Section 8 will be strengthened, enabling landlords to end a tenancy early with a legal reason, following a similar process to the current Section 21.

Top tip: Familiarise yourself with the grounds for eviction under Section 8 and keep detailed records of any breaches or violations by tenants. It is also crucial to engage in open and transparent communication with tenants to address any issues promptly.

Rent Reviews and Increased Notice Periods:

Under the Renters Reform Bill, rent increases may only occur once a year, and tenants must receive two months' notice before rent increases. Tenants will be able to challenge unfair rent increases and rent review clauses (which lock tenants into rent increases) will no longer be permitted.

Top tip: Plan ahead and review your rental pricing strategy to account for longer notice periods and potential rent restrictions. Conduct thorough market research to ensure your rents remain competitive while complying with regulations.

The Decent Homes Standard:

In the UK, around 12% of rental properties pose an imminent risk to tenants' health and safety. Under the proposed Bill, the Decent Homes Standard will be expanded, requiring landlords to maintain higher living standards within their rental properties. This includes aspects such as heating, insulation, safety and energy efficiency.

Top tip: Regularly assess your properties to identify areas for improvement to meet the Decent Homes Standard. Create a maintenance plan and allocate resources for necessary upgrades. Conduct periodic inspections to ensure compliance and maintain high tenant satisfaction. It is also well-advised to ensure your Landlord’s Insurance is regularly checked and updated for changes in any buildings or contents amendments, such as if you have acquired new properties, made any renovations, or implemented changes in rental rates which affects your cover for loss of rent.

Landlord Portal and Ombudsman:

The Renters Reform Bill proposes the establishment of a centralised landlord portal to ease pressure on the court system without Section 21. The portal will serve as a platform to help landlords and tenants settle complaints and disputes outside of the courtroom, and help tenants make better decisions when selecting a new tenancy agreement.

Top tip: Stay updated on portal registration requirements and utilise the resources available. Establish clear communication channels with tenants and address any issues promptly to minimise the likelihood of escalated disputes.

Pet-friendly Rental Properties:

The upcoming Bill aims to make it easier for renters to find accommodations that allow pets. Landlords will be restricted from imposing blanket bans on pet ownership. Refusals or consent must be given within 42 days of the tenant's request.

Top tip: Develop a clear pet policy that balances tenants' needs and protects your property. Consider implementing a pet deposit or pet insurance requirement to cover potential damages. Communicate expectations and guidelines to tenants regarding pet ownership and property care.

Getting started

The Renters Reform Bill represents a significant shift in the rental market. While landlords may face some challenges and adjustments due to the new legislation, it is important to recognise the overall goal of creating a fairer and more transparent rental sector. By familiarising themselves with the provisions of the Renters Reform Bill and staying up-to-date with its implementation, landlords can navigate the changing landscape effectively to foster more secure, quality housing.