Published: 17/05/2023
Housing Secretary Michael Gove has confirmed that the long-awaited Renters’ Reform Bill will be introduced to Parliament later today. The Bill sets out the government’s plans to reform the private rented sector and level up housing quality, it is expected to be the biggest shake-up of the private rented sector for 30 years.We have briefly outlined some of the more relevant measures below.
- Halve the number of sub-standard rented homes by 2030 and require privately rented homes to meet the Decent Homes Standard for the first time.
- All tenants who have had an Assured Tenancy or Assured Shorthold Tenancy will be moved onto a single system of periodic tenancies. Tenants will need to provide two months’ notice when leaving a tenancy and landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law.
- Abolish Section 21 ‘no fault’ evictions, a tenancy will only end if the tenant ends it or if the landlord has a valid ground for possession. Grounds for possession, specifically under section 8, will be reformed to make sure that landlords have effective means to gain possession of their properties when necessary. In cases of criminal or antisocial behaviour, the notice period for the existing mandatory eviction ground will decrease.
- Rent increases limited to once per year, end the use of rent review clauses and improve tenants’ ability to challenge excessive rent increases through the First Tier Tribunal.
- New single Ombudsman that all private landlords must join. This will provide fair, impartial, and binding resolution to many issues and be quicker, cheaper, and less adversarial than the court system.
- Launch a new Property Portal supported by Government to make sure that tenants, landlords and local councils have the information they need.
- Legislate to make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits.
- Give the tenants the right to request a pet in their property which the landlord must consider and cannot unreasonably refuse. Also, amend the Tenant Fees Act 2019 so that landlords can request that their tenants buy pet insurance.
According to the Renters’ Reform Bill timetable, the government will introduce the changes in two stages, providing at least six months’ notice of the first implementation date, after which all new tenancies will be periodic and governed by the new rules. To avoid a two-tier rental sector, all existing tenancies will transition to the new system on a second implementation date.
The objective of the bill is to provide new support for cost-of-living pressures with protections for the most vulnerable, and new measures to tackle arbitrary and unfair rent increases. There has been widespread discussion around the practical impact these changes will have on the private rental sector, with some saying it can only add to the list of recent changes that will likely deter private landlords from renting properties. This is probably a likely consequence as the headlines, particularly the abolishing of the section 21 no fault eviction, won’t instill confidence in a landlord community already reeling from recent tax and other legislative changes.
In practice, however, we believe the impact will be less acute on landlords than first feared. It’s incredibly rare for possession to be sought for any other reason than those that will be contained in the newly expanded section 8, and the majority of landlords use professional letting agents who will manage the adjustments to process to ensure compliance.
If you have any questions about any of the points above or uncertainty about how these changes will impact you, please don’t hesitate to get in touch.