Landlords Guide to the Renters Reform Bill
We’ll be honest, this is a heavier topic compared to some of our usual pieces but the Renters Reform Bill is incredibly topical right now, and an essential read for landlords in 2024.
As always, our goal is to provide you with valuable insights, industry trends, and practical tips that will help you maximise your home’s value. Grab a coffee, comfy seat, and keep scrolling through.
What is the Renters Reform Bill?
The Renters Reform Bill is a piece of legislation; it represents a significant step towards creating a fairer and more balanced private rented sector (PRS) in the UK, ultimately aiming to improve the quality of housing for all involved. Presented to parliament on May 17, 2023, this bill is currently undergoing thorough parliamentary scrutiny in the House of Commons before it becomes law. With various stages of review and amendments already completed, it stands as the most substantial piece of legislation in the last 30 years affecting both private renters and landlords.
The goal is to pass the bill into law before the next General Election, expected in the autumn of 2024. However, some policies may be implemented gradually as certain aspects require additional regulations and preparations that may not be in place by then.
The introduction of the Renters Reform Bill addresses the unbalanced nature of the UK’s private rented sector, which impacts millions of renters and small-scale landlords. With 11 million renters relying on privately rented homes and 2 million landlords earning income from rental properties, it’s evident that reform is long overdue. While some renters feel vulnerable under current legislation, responsible landlords face challenges due to the actions of a minority.
The journey of this Bill has involved extensive debate and negotiation, earning it the reputation of ‘the biggest shake-up in 30 years’. Anticipation runs high as stakeholders await the final version of the bill. It’s crucial to recognise that there are two sides to the coin; while tenants’ rights have seen significant improvements, landlords have expressed concerns, particularly regarding measures affecting their ability to handle anti-social tenants or those with rental payment issues.
What does it involve?
There are multiple parts to this piece of legislation, each of which can be discussed in varying levels of depth – the Gov.uk website is the most reliable source of information to explore each of the different components in depth.
We have summarised below what we believe are the key components of the Bill that landlords need to be aware of and remain compliant with where relevant:
The Bill aims to see the end of Section 21 ‘no fault’ evictions and transition to a simpler tenancy structure where all assured tenancies are periodic. This change will offer tenants more security, enabling them to challenge poor practices without the threat of eviction.
Introduction of broader grounds for possession to support landlords and allow responsible landlords to reclaim their property (such as for selling or accommodating close family) and streamline the process of repossessing properties, particularly in cases of tenant misconduct like anti-social behaviour and repeated rent arrears.
Enhance protections for tenants against unfair evictions, by enabling tenants to contest things such as exorbitant rents aimed at forcing them out. Landlords can still increase rents to what’s fair in the market, but if there’s a problem, an independent tribunal can step in and decide what’s fair for everyone, without limiting the court’s power.
The establishment of a new Private Rented Sector Ombudsman is planned to offer impartial and binding resolutions for various disputes, providing a quicker, more cost-effective, and less confrontational alternative to the legal system.
Development of a Privately Rented Property Portal – essentially a knowledge sharing platform. It aims to help landlords better understand their legal responsibilities, ensuring compliance and boosting confidence in responsible landlords. Additionally, it will offer tenants better information for informed decisions on tenancy agreements and aid local councils in targeting enforcement efforts effectively.
Grant tenants the right to request a pet in the property, which landlords must consider and cannot unreasonably decline. Landlords will have the option to mandate pet insurance to cover any property damage, supporting a harmonious tenant-pet relationship.
What does the future hold?
To achieve true reform and strengthen the lettings market, it’s essential to address key structural issues impacting the rental market. Over the past year, there’s been a noticeable trend of landlords reducing their involvement in the market or exiting altogether. Coupled with the lack of new rental properties being constructed, this has created a significant supply and demand imbalance. As a result, rental prices have continued to rise, presenting a challenging landscape for tenants seeking new homes.
Critics of the Renters Reform Bill argue that while it represents a step in the right direction, it may not fully address the broader issues plaguing the rental market. However, others view it as a positive move forward. It’s crucial for the government to recognise the bill’s publication as part of a larger effort, acknowledging the need for additional urgent changes.
A healthy rental market relies on both empowered, protected tenants and fair-minded, incentivised landlords. Legislation that fails to consider both sides of the equation will fall short of making the necessary difference. Therefore, it needs to implement measures that benefit both tenants and landlords, to achieve a thriving rental market.
