Big changes are on the horizon for the rental market, with the Renters’ Rights Bill, introduced by the Labour Government on 11th September 2024. This is a public bill that was formally presented to Parliament and given its First Reading in the House of Commons. While this stage involves no debate, it marks the beginning of a significant shift in how tenancies will be managed across the UK.
The Second Reading, where MPs will debate the bill, is scheduled for Wednesday 9th October 2024, and from there, the bill will continue its journey through Parliament. The reforms within this bill are designed to offer greater protections for tenants, but they also bring significant changes for landlords. Here’s what you need to know about what’s coming and how to prepare.
What changes are on the horizon?
Goodbye to “No-Fault” Evictions
One of the most talked-about changes is the end of Section 21, commonly known as “no-fault” evictions. This means landlords will no longer be able to ask tenants to leave without a reason. Instead, you’ll need a valid, legally defined reason for ending a tenancy, such as rent arrears or wanting to sell the property.
Understandably, many landlords are concerned that this will make it harder for them to regain possession of their properties. Ben Beadle, head of the National Residential Landlords Association (NRLA), has highlighted that landlords will need time to prepare for this change. On the other hand, tenant advocacy groups, like Generation Rent, see this as a long-overdue reform, giving renters more security.
Rent Increases and Bidding Wars
Under the new rules, landlords can only increase the rent once a year, which must align with market rates. The idea is to provide tenants with more stability and prevent unfair rent hikes.
The bill will also stop rental bidding wars. From now on, landlords and agents will need to publish an asking rent, and they won’t be able to accept offers above this price. This could be a welcome change for tenants, especially in high-demand areas where bidding wars have pushed higher rents.
Tenant Protections: Pets, Benefits, and Families**
The Renters’ Rights Bill also aims to make the market fairer by stopping landlords from discriminating against tenants who have children or receive benefits.
Additionally, tenants will have the right to request to keep pets in their homes, and landlords will need a good reason if they refuse. You can still ask tenants to take out pet insurance to cover potential damage, but blanket “no pets” policies will be a thing of the past.
Awaab’s Law and the Decent Homes Standard
Named after a tragic case involving a toddler who died due to mould exposure, Awaab’s Law will now apply to private rentals.
Landlords must fix serious health hazards like dampness or mould within a set timeframe or face penalties. The Decent Homes Standard will also apply to private rentals, ensuring properties are safe and habitable.
What Are Landlords Saying About the Renter’s Rights Bill?
Reactions from landlords have been mixed. Many are concerned about how these changes will affect their ability to manage their properties. The NRLA has pointed out that while most landlords aim to provide safe, comfortable homes, they need sufficient time to adjust their practices and comply with the new rules. There’s also a worry that without reforms to the court system, handling disputes or evictions may become even more time-consuming.
On the other hand, tenant groups are relieved to see these reforms finally coming through. They believe the changes will offer better protections for renters and help prevent the unfair practices that have plagued the market for years.
Preparing for the Changes
With the Renters’ Rights Bill expected to become law by the summer of 2025, there’s still time to prepare. Start by reviewing your tenancy agreements, updating your policies on pets and rent increases, and ensuring your properties meet the Decent Homes Standard. It’s also a good idea to stay informed about how the bill progresses, as MPs and peers may propose further changes before it becomes law.
Final Thoughts
Change is always challenging, but with the proper preparation, you can navigate these updates smoothly. At lettingaproperty.com, we’re here to help landlords through every step of the process, from ensuring their properties are compliant to offering guidance on managing tenancies under the new rules.
If you have any questions or need help preparing for these changes, feel free to contact our team. We’re here to ensure that you and your properties are in the best position to succeed in this new landscape.
Archived
The Renters (Reform) Bill was introduced to parliament by the then Government on 17 May 2023, recommending landmark rental reforms. These measures were predicted to have a big impact on landlords and tenants throughout England, plus the wider Private Rented Sector.
The Bill made progress through various stages of the house until being shelved ahead of the 2024 General Election. The Bill was then effectively shelved, although speculation suggested the new Labour Government will be committed to some of its key points, including abolishing Section 21.
On 17 July 2024, The King’s Speech signalled the beginning of a new parliamentary session, along with a government pledge to give “greater rights and protections to people renting their homes, including ending ‘no fault’ evictions and reforming grounds for possession” through a new Renters’ Rights Bill.
Renters (Reform) Bill historic timeline
Originally proposed back in 2019 and fleshed out in the 2022 fairer private rented sector white paper, the Renters (Reform) Bill was introduced to parliament on 17 May 2023. This began the progress of the Bill, passing through various stages.
17 May 2023: The Renters (Reform) Bill was announced to parliament and received its First Reading in the House of Commons. The Bill contains sweeping changes, aimed at improving the rental system for both the 11 million private renters and 2.3 million landlords in England.
23 October 2023: The Bill received its Second Reading, giving MPs from all parties the opportunity to debate and input. Amendments were then made, including delaying plans to abolish Section 21 pending court reforms. Passage of the Bill was rolled over to the next parliamentary year.
7 November 2023: Parliament resumed with the King’s Speech, which made reference to the Bill and echoed Government commitment to strengthening tenant rights in England, while providing some assurances for landlords.
15 November 2023: The Committee Stage commenced, with close examination of the Bill and further amendments. These included applying the Decent Homes Standard, banning landlords and agents from discriminating against tenants on benefits, and overhauling Rent Repayment Orders.
24 April 2024: The Report Stage began, with a Third Reading in the House of Commons to finalise amendments to the Bill.
1 May 2024: A First Reading took place in the House of Lords, a procedural step to transition between the two legislative bodies, and formally introduce the Bill to the Lords for further consideration.
15 May 2024: During the Bill’s Second Reading in the House of Lords, the debate focused on potential impacts of the Bill, allowing members to discuss and feedback on general principles and key features.
22 May 2024: A snap General Election was announced, halting the progress of the Bill.
17 July 2024: The King’s Speech signalled the beginning of a new parliamentary session and a new Labour Government. The King said the government would give “greater rights and protections to people renting their homes, including ending ‘no fault’ evictions and reforming grounds for possession” through a new Renters’ Rights Bill.
What was the purpose of the Renters (Reform) Bill?
The Bill was designed to “bring in a better deal for renters”, including abolishing Section 21 ‘no fault’ evictions, as mentioned – meaning landlords can only evict on fault-based grounds and reasonable circumstances – and ending fixed-term tenancies. Tenants will also have the right to request a pet, which landlords cannot unreasonably refuse – though they can require tenants to take out pet insurance.
The Bill also recognises that “responsible landlords” face challenges of their own and aims to “celebrate the overwhelming majority of landlords who do a good job”. It’s designed to support these landlords, with more comprehensive possession grounds, giving landlords “peace of mind that they can repossess their property when a tenant is behaving badly, or their circumstances change”.
Housing Secretary, Michael Gove, says: “Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants, while delivering our manifesto commitment to abolish Section 21 ‘no-fault’ evictions. This will ensure that everyone can live somewhere which is decent, safe and secure – a place they’re truly proud to call home.”
What were the proposed changes?
Almost all the recommended reforms in the Government’s original white paper remained in the Bill, though some. We recommend you read the Renters (Reform) Bill in more detail to gain a full understanding, but here’s a summary of key information for landlords and tenants:
- Abolishing Section 21 ‘no fault’ evictions
- Reforming grounds for possession
- New mandatory ombudsman
- Tenant pet requests and pet insurance
- Rent increases and advance payments
- New property portal for landlords and tenants
- Further proposed improvements to the PRS
- Decent Homes Standard for the PRS
- Outlawing blanket bans on benefits
- When will the changes be implemented?
Renters (Reform) Bill – Section 21 Evictions
The Renters (Reform) Bill proposes abolishing ‘no fault’ Section 21 evictions and delivering a simpler, more secure tenancy structure. This is designed to “provide tenants with greater security, supporting them to put down roots in their community, whilst ensuring landlords remain confident that they can regain their property where they need to”.
The Bill also proposes to end fixed-term tenancies and move to periodic tenancies, which do not have an end date. Any new tenancies (that would previously have been Assured Tenancies or Assured Shorthold Tenancies) would be governed by the new system. Existing tenancies would move to the new system after the second implementation date, which would take place at least 12 months later.
Tenants would be required to provide two months’ notice when leaving a tenancy, ensuring landlords recoup the costs of finding a tenant and avoid lengthy void periods. Landlords would only be able to evict a tenant in reasonable circumstances, which will be defined in law, helping to avoid unwanted moves.
In place of section 21, the Bill outlines proposals to strengthen section 8, allowing landlords to end a tenancy agreement early if they have a legal reason to do so. Where a landlord seeks possession using section 8 grounds, the process to end a tenancy would be similar to the current section 21 process. Landlords would need to serve notice to tenants on the prescribed form with the required notice period. If a tenant doesn’t leave, landlords would need to go to court and provide evidence that the ground applies.
Renters (Reform) Bill – Grounds for gaining possession
The Renters (Reform) Bill is designed to ensure the grounds for possession are “comprehensive, fair and efficient” and “cover all circumstances under which a landlord might reasonably expect possession”. Grounds can be either mandatory or discretionary. For mandatory grounds, judges must award possession when a landlord can evidence the ground is met. Discretionary grounds allow a judge to consider whether it is reasonable to award possession, even where the ground is met.
Recognising that landlords’ circumstances change, the Government is introducing new mandatory grounds for eviction for landlords who want to sell their property and/or move (themselves or family) into the rental property. Landlords won’t be able to use grounds for moving in, selling or redevelopment for the first six months of the tenancy, meaning responsible renters will enjoy enhanced security and peace of mind after moving into a property.
New mandatory grounds for repeated serious arrears are also recommended. This aims to help landlords who have tenants that pay off a small amount of arrears, keeping them under the mandatory repossession threshold of two months’ arrears.
Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at the hearing. This supports landlords facing undue burdens, while ensuring tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.
The notice period for the existing rent arrears eviction grounds will increase to four weeks and will retain the mandatory threshold of two months’ arrears at the time of serving notice and hearing. This will ensure that tenants have a reasonable opportunity to pay off arrears without losing their home.
Renters (Reform) Bill – new mandatory Ombudsman for landlords and renters
The Bill proposes introducing a single government-approved Private Rented Sector Ombudsman to “provide fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system”. This covers all private landlords who rent out property in England, regardless of whether they use an agent.
A landlord redress scheme would enable a former or current tenant to make a complaint against a landlord, which would then be independently investigated. This would allow private renters and landlords to settle disputes quickly without going to court. This method will be cheaper than the court and provide landlords and tenants with a “fair, impartial and binding resolution to many issues”.
The Ombudsman has the power to “put things right for tenants”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.
The Bill outlines conditions on what the redress scheme should include and suggests that Ombudsman membership should be mandatory for landlords. However, more details are required regarding how and when the scheme will be set up.
Renters (Reform) Bill – Tenants’ right to keep pets
The bill aims to make it easier for tenants to keep pets in their homes. All tenants will have the right to request a pet in their property, which “the landlord must consider and cannot unreasonably refuse”.
The Government recognises that there are situations where it will always be reasonable for a landlord to refuse a request – including where their superior landlord prohibits pets. If a landlord denies the tenant’s request, they can challenge this decision. Where there is disagreement, a tenant can escalate their complaint to the Private Rented Sector Ombudsman (see below) or through the court, with a final decision based on the evidence provided by both parties.
To support this change, landlords would be able to require that tenants take out pet insurance. This would provide landlords with reassurance that any damage caused by a pet to their property will be covered, and that responsibility for preventing and resolving damage will reside with the tenant.
The Tenant Fees Act 2019 would be amended to include pet insurance as a permitted payment. The tenancy deposit can also be used for damages, although landlords should not attempt to recover costs twice for the same damage. In rare cases where the insurance and deposit do not cover the cost of the damage, a landlord can take the tenant to court to recoup additional costs.
Renters (Reform) Bill – Rent increases and rent in advance
The Renters Reform Bill proposes ending the use of rent review clauses and only allow rents to increase once per year. Rent increases will be through one mechanism, replacing the existing section 13 process under the Act, and landlords must give 2 months’ notice of any rent change.
The Government hopes these changes will “prevent tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price”.
If a tenant pays multiple months’ rent in advance, landlords will be required to repay any upfront rent if a tenancy ends earlier than the period that tenants have paid for.
The Bill will also limit the amount of rent that landlords can ask for in advance. This power will be used if the practice of charging rent in advance becomes widespread or disproportionate.
Renters (Reform) Bill – New property portal for landlords and tenants
The government proposes introducing a new digital a new Property Portal to “help landlords understand their legal obligations and demonstrate compliance”. This would also provide better information for tenants, enabling them “to make informed decisions when entering into a tenancy agreement”.
The portal sims to provide a single ‘front door’ for landlords to understand their responsibilities, tenants will be able to access information about their landlord’s compliance. Additionally, local councils will have access to better data to crack down on criminal landlords.
The Government also intends to incorporate some of the functionality of the Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible.
Further proposed reforms for the Private Rented Sector
The private rented sector white paper committed to further reforms to support both landlords and tenants, including a new Decent Homes Standard and outlawing blanket bans on families with children or receiving benefits. The Government remains “fully committed to implementing these reforms and will bring forward legislation at the earliest opportunity”.
Renters (Reform) Bill – A Decent Homes Standard for the PRS
The Decent Homes Standard is a regulatory standard in the Social Rented Sector. The Renters (Reform) Bill recommends this standard is applied to private rented homes, as part of the government’s Levelling Up mission to halve all non-decent homes by 2030. Although the Government stated they remain committed to this course of action, ongoing consultation is required before this will be introduced.
When this standard is introduced, private rental properties will need to have:
- No serious health and safety hazards, such as risks of fall, fire, or carbon monoxide poisoning
- Adequate kitchen and bathroom facilities
- Decent noise insulation
- Clean, appropriate and usable facilities
- Adequate heating and be warm and dry
The Department of Levelling Up, Housing and Local Communities hopes that the Decent Homes Standard will “raise standards and make sure that all landlords manage their properties effectively, rather than waiting for a renter to complain or a local council to take enforcement action”.
Local Authorities will be given new enforcement powers to require landlords to make properties decent, with fines up to £30,000 or a banning order in the worst cases. Tenants will also be able to claim up to 24 months rent back through rent repayment orders – up from 12 previously.
Councils will also be given stronger powers to investigate landlords who rent substandard homes, providing them with the tools they need to identify and take enforcement action against the criminal minority and help drive them out of the sector.
Renters (Reform) Bill – Blanket bans on benefits
The Renters (Reform) Bill proposes outlawing ‘blanket bans’ on families with children or people receiving benefits. ‘No DSS‘ or ‘No benefits’ policies – in which letting agents or landlords would refuse to accept applicants receiving benefits – were ruled as unlawful discrimination by the court.
The court ruled that these blanket bans go against the Equality Act and discriminate against women, disabled and vulnerable people – making it more difficult for them to rent.
The Bill recommends taking this court ruling a step further, by making it illegal to have blanket bans on renting to those in receipt of benefits or who have children – ensuring families aren’t discriminated against when looking for a home to rent and protecting the most vulnerable. Landlords will still be able to carry out referencing checks to make sure a tenancy is affordable and have the final say on who they let their property to. This will apply to England and Wales and will be extended to Scotland via a further amendment at Report Stage.
The Government states they would enforce this by:
- Supporting landlords to make informed decisions on individual circumstances rather than relying on blanket bans
- Working with the insurance industry to address landlord and agent misconceptions that it is difficult to arrange insurance for properties where tenants are in receipt of benefits
- Exploring improvements to welfare support information for both tenants and landlords and helping to ensure that those who are unable to manage their rent payments can arrange direct payments of housing costs to their landlord through their Universal Credit (Managed Payments)
- Boosting awareness of the range of local services available to help people who are living on a low wage or are receiving benefits
Renters (Reform) Bill – Will the changes be implemented?
Had the Renters (Reform) Bill passed through further parliamentary readings and, ultimately, been given Royal Assent, the Government would have implemented the Bill in two stages, “ensuring all stakeholders have sufficient notice to implement the necessary changes”.
However, with the announcement of the General Election, the Renters (Reform) Bill was effectively shelved, pending a re-introduction by further Government, or an end to its life completely. The King’s Speech ushered in a new Labour Government, and along with it a new proposed bill.
The Renters’ Rights Bill
The Renters’ Rights Bill was briefly trailed during the King’s Speech on 17 July 2024, and looks to effectively be Labour’s version of the Renters (Reform) Bill. The proposed Renters’ Rights Bill aims to reform the private rental sector and protect tenants from exploitation by landlords in England. This legislation will encompass several key policies, including:
Abolishing Section 21: Introducing clear and expanded possession grounds to allow landlords to reclaim their properties when necessary.
Enhancing tenants’ rights and protections: Empowering tenants to challenge rent increases and ending rental bidding wars.
Allowing pets in rental properties: Landlords must reasonably consider tenant requests to keep pets and can require insurance for potential damage.
Introducing a Decent Homes Standard for the PRS: Implementing this standard for the private rental sector to ensure quality living conditions.
Enforcing ‘Awaab’s Law’: Setting clear legal expectations and deadlines for landlords to meet their obligations.
Creating a digital database for the PRS: consolidating information for landlords, tenants, and councils.
Establishing a new ombudsman service: Offering quick, affordable, and binding dispute resolutions between landlords and tenants.
Prohibiting discrimination: Making it illegal for landlords to discriminate against tenants based on benefits or having children.
Strengthening local council enforcement powers: Enabling councils to identify, penalize, and eliminate rogue landlords more effectively.
What do you think of the Renters’ Rights Bill?
What are your thoughts on the Renters’ Rights Bill? How will proposed changes impact you as a landlord or tenant? Share your take in the comments below.
