The Renters’ Rights Bill will transform the private rental market and its impact will affect both landlords and tenants alike. Although the Bill still needs to go through the House of Lords and receive Royal Assent, it is expected to become law by mid-2025 and will take effect soon after.
As the Bill passed through the House of Commons, amendments were made to its contents, so it’s important to stay up-to-date with how the new law is expected to impact the sector. In this article, we take a closer look at the most impactful aspects of the latest version of the Renters’ Rights Bill and give you the lowdown on how it will affect landlords and tenants.
Transition to Periodic Tenancies
Fixed tenancies have become the norm in the private rental sector, but they’re set to be abolished under the Renters’ Rights Bill. Instead, periodic tenancies will be standard. This means tenants won’t be subject to long-term tenancies that they have no way of breaking. Under the new law, tenancies will run from month to month and will only end if either the landlord has grounds for repossessing the property or the tenant serves notice.
12-month Protection Period
Although periodic tenancies will now be used throughout the private rental sector, tenants will benefit from a 12-month ‘protection period’ upon the commencement of a lease. During this time, a landlord won’t be permitted to move back into the property or sell it, unless they sell to another landlord who takes over the lease.
During this 12-month period, a tenant will still be able to serve notice if they want to end the tenancy.
Abolition of Section 21 Notices
Sometimes known as ‘no fault evictions’, Section 21 of the Housing Act 1988 gives landlords the right to end an assured shorthold tenancy after the initial fixed term, without providing a reason. It’s often argued that ‘no fault evictions’ are unfair on tenants and limit the stability available to tenants in rental homes.
Once the Renters’ Rights Bill comes into force, Section 21 notices will be abolished and it will no longer be possible for landlords to enforce a ‘no fault eviction’. While this enhances tenants’ rights, landlords will have more wide-ranging grounds for eviction under Section 8.
When serving a Section 8 notice, landlords must cite a specific reason for the eviction, such as a tenant’s anti-social behaviour or rent arrears. Under the Renters’ Rights Bill, landlords will also be able to serve a Section 8 notice for additional reasons, such as if they want to move into the property or if they want to sell the property.
Regulated Rent Increases
The new law is expected to limit rent increases, both in terms of how frequently they can be imposed and how much they can increase by. When the Renters’ Rights Bill comes into force, landlords will only be able to increase the rent once per year and the increase must align with market rates.
Can Landlords Still Set Their Own Rent?
The private rental market has become increasingly competitive and, as a result, tenants often struggle to find accommodation. Under the proposed law, landlords will be required to publish a clear asking rent and they won’t be permitted to accept offers in excess of this. So, while landlords can set their own rent, it is expected that rental prices will no longer be over-inflated and bidding wars will be eliminated. As a result, tenants will have fairer access to properties, particularly in competitive areas.
Preventing Discrimination Against Tenants
Another change we can expect to see if the new Bill is passed is reduced discrimination. Currently, landlords can choose not to rent to tenants who have children, for example, but this will no longer be the case once the Renters’ Rights Bill is in force.
In fact, landlords won’t be able to refuse tenants only because they have children and/or are receiving benefits. In addition to this, landlords won’t be permitted to issue a blanket ban on tenants keeping pets. Instead, the tenant will have a right to request a pet and, unless refused on reasonable grounds, landlords will be able to request tenants take out insurance to cover the cost of potential damage associated with pet ownership.
Improving the Condition of Rental Properties
In response to the tragic death of two-year-old, Awaab Ishak, new requirements stipulate the landlords of social housing properties must take action to address serious health hazards within specific timeframes. The Renters’ Rights Bill will extend ‘Awaab’s Law’ to private rental accommodation, with the aim of ensuring all tenants have safe living conditions.
Additionally, the Decent Homes Standard will also be extended from the social housing sector to the private rental sector. This requires that homes meet a minimum standard in relation to safety, decency and warmth.
Lifetime Deposits
Saving enough money to put down on a property can prevent tenants from gaining access to the private rental market or prevent tenants from moving to an alternative property. Even if the tenant is entitled to receive their full deposit back at the end of a tenancy, the delay associated with receiving the funds means it cannot be used as a deposit on a new tenancy.
In accordance with the latest version of the Renters’ Rights Bill, a new system of ‘lifetime deposits’ is expected to replace the current process.
This means the tenant’s deposit will pass from one tenancy to the next, rather than being returned to the tenant each time. This eliminates unnecessary delays and provides tenants with more freedom when moving house or starting a new tenancy.
What Does the Renters’ Rights Bill Mean for Landlords?
There’s no doubt that the Renters’ Rights Bill will afford tenants additional legal protection, but this doesn’t mean that it’s bad news for landlords. In fact, the new legislation can benefit landlords in numerous ways, such as:
- Improved property standards and long-term asset value
- Flexible tenancy management
- Increased tenant retention
While many landlords will already be meeting the minimum requirements that are set out in the Renters’ Rights Bill, it’s advisable to familiarise yourself with the new regulation and keep up-to-date with any amendments that are made as the Bill passes through the House of Lords.
As always, a comprehensive tenancy agreement, combined with statutory regulation, will provide the best outcome for both landlords and tenants and reduce the risk of disputes arising.
To find out how landlords can prepare for the Renters’ Rights Bill or for advice on tenancy agreements, disputes and more, contact our expert team on 01276 680000 or send us a message via our contact form.
