As you may have seen in the news, the long-awaited Renters’ Reform Bill has been published and had its first reading in Parliament this week.
The headline proposal within the Bill is the abolition of Section 21 'no-fault' evictions, which was part of the Conservative Party’s 2019 election manifesto, but the reforms don’t end there. So, what can we expect if the Bill passes? What are the implications for landlords and tenants?
Read on to find out.
What is the Renters’ Reform Bill?
The Renters’ Reform Bill is widely regarded as the biggest shake-up of the English private rental market for a generation.
While the sector generally works well for landlords and tenants, issues exist, such as the instability caused by the aforementioned Section 21 'no-fault' evictions. Under the current legislation, landlords are entitled to evict tenants without giving a reason. The impact of such evictions can be wide-ranging, potentially affecting tenants’ employment security, their children’s education, and, in broader terms, community investment.
It has also been reported that poor housing conditions cost the NHS approximately £340 million per year and can affect the desirability of certain local areas.
Under the Bill, the government plans to legislate for a Decent Homes Standard in the privately rented sector to combat this, responding to issues like damp, cold, and dangerous housing conditions.
The hope is that this will improve health and safety standards across the sector, although no guidance has been given on how much this will cost individual landlords. Around 79% of privately rented homes already meet the current standard, so it stands to reason that 21% of properties will require upgrades of some sort.
Despite the abolition of ‘no-fault’ evictions, the proposed reforms aim to recognise and support the majority of landlords who perform their duties well, ensuring they can still repossess their properties under certain circumstances.
What to expect if the Renters’ Reform Bill passes
Below is a bullet list of some of the new measures being introduced in the Bill:
- Abolition of 'no-fault' evictions
- Simplification of the eviction process for tenants involved in anti-social activities or habitually defaulting on rent payments
- Restriction on rent increases to once per annum, with a compulsory two-month notification period
- Landlords are required to consider all pet ownership requests reasonably and cannot arbitrarily decline them
- Implementation of minimum housing standards in the private sector, ensuring properties are hazard-free and well-kept
- Prohibition of wholesale restrictions against claimants of benefits or individuals with children
- Establishment of a new ombudsman with jurisdiction over all private landlords, empowered to mandate landlord apologies and award compensation up to £25,000
- Creation of an online property portal where landlords are required to prove adherence to legal stipulations
What this means for tenants
At present, Section 21 evictions mean tenants must find new accommodation with a minimum of two months' notice, which may lead to increased relocation expenses and disruption to their lives.
While this is by no means the fault of the landlord–and in the vast majority of cases, Section 21 only happens when the landlord has a dramatic change of circumstances (why else would they evict a paying tenant who isn’t at fault for anything?)–the government has deemed change necessary.
As well as the abolition of ‘no-fault’ evictions, the Decent Homes Standard is also set to be implemented in the private rental sector. This means residences must adhere to specific health and safety guidelines, with supplied amenities kept in a satisfactory, functional state. Additionally, the Bill will facilitate tenants' ability to contest issues such as unwarranted rent hikes and to secure refunds for substandard housing conditions.
These changes are purportedly being introduced to make life less expensive for families and ensure the rental sector is better for everyone.
What this means for landlords
As we here at Petty’s are always happy to testify, most landlords are conscientious and caring, offering their tenants housing that is both secure and comfortable.
Yet, for the ones who fall short, harsher penalties will be introduced, and local authorities will be granted greater power to confront landlords who neglect their responsibilities.
That said, protections will also be implemented for ‘good’ landlords. The new Bill will streamline the process for landlords to reclaim their property in certain situations, such as when dealing with a tenant involved in anti-social behaviour or rent arrears, for example. How this will work in practice, however, isn’t entirely clear at this stage.
As is commonly the case when such Bills are passed, there will almost certainly be additional administrative burdens and financial costs for landlords to bear, although this currently looks to be restricted to those deemed non-compliant.
When will this happen?
Parliamentary Bills can sometimes be fast-tracked and passed in 24 hours.
However, the process can be incredibly protracted for a Bill such as Renters’ Reform. This is understandable, given the proposed changes, so the smart money is being placed on the implementation of the Bill in early 2024 or the latter part of this year.
You can follow the passage of the Renters’ Reform Bill here.
As Petty’s MD, John steers the ship. He is, however, first to admit that the team around him run the show, and he’s incredibly proud of each and every one of them. Sporty and studious, caring and loyal, John is a father of two wonderful children (and Cooper the dog).020 3370 8784 / Email Directly