What’s in the Renters’ Reform Bill?
The Renters’ Reform Bill is expected to be “the biggest shake-up of the private rented sector in a generation”, according to the government. The measure has the potential to alter the rental sector, with significant implications for landlords and tenants. The long-awaited bill proposes eliminating no-fault evictions, abolishing fixed-term contracts, prohibiting unjustified rent increases, and making blanket bans on renting to families with children or tenants receiving benefits illegal. The bill could also prevent landlords from prohibiting tenants from keeping pets.
Campaigners expect that the new guidelines will improve living conditions for England’s 11 million tenants and provide them with more security.
This blog looks at some of the major suggestions and how they might affect you.
‘No fault’ evictions could be banned.
A landlord cannot remove a tenant without reason under new proposals, and it will not be solely their decision. A court will eventually determine if the landlord has a valid reason (as defined by law). Currently, section 21 notices allow landlords to terminate tenancies without providing a cause. However, the Renters’ Reform Bill will eliminate landlords’ right to ask tenants to leave a house for no fault of their own. This means that unless the landlord has an enforceable request, the tenant can only terminate a tenancy.
According to government data, more than a fifth of private tenants who moved in 2019 and 2020 did not end their tenancy voluntarily. According to Housing Secretary Michael Gove, the Renters’ Reform Bill will empower tenants to challenge substandard landlords without losing their house. According to a government research briefing, there is evidence that renters are hesitant to request repairs or dispute rent hikes for fear of eviction, which is what this measure attempts to address.
While no-fault evictions under Section 21 would be prohibited, the revisions would also expand landlords’ ability to oust renters for antisocial behaviour. Indeed, the government claims that the law will “strengthen landlords’ repossession grounds,” making it simpler for landlords to evict troublesome tenants.
Rolling tenancies
Currently, the majority of tenants sign a 6 or 12-month fixed-term lease. As part of these broad plans, these would be phased out, and all tenancy agreements would become “rolling,” in an effort to provide tenants with better security and flexibility. The rule change would also make it easier for renters to move whenever they want without being obligated to pay outstanding rent. Instead, tenants would give two months’ notice if they wanted to leave. This means a tenancy can only be terminated if the tenant terminates it or the landlord has a good reason (as specified by law).
When will the reforms take effect?
This bill is in its early stages and has a long way to go before becoming law. It will be introduced to Parliament on Wednesday, May 17, and will then proceed to the Lords. The bill, or parts of it, could be challenged and amended.
A Private Renters’ Ombudsman
The Bill proposes the establishment of a new ombudsman to resolve conflicts between private renters and landlords. The ombudsman will oversee all private landlords who rent out residences and will guarantee that landlords take action when a resident files a complaint. There will be resources available, including a new property portal, to assist landlords in understanding their responsibilities. The portal will also provide tenants with the information they need to deal with rogue landlords and agents and assist councils in cracking down on bad behaviour.
Ending blanket ban on renting to benefit claimants and families
The bill would make it illegal to prohibit renting to families with children or those receiving benefits, which has been a long-standing campaign demand.
Ending rent hikes
For the first time, the measure will prohibit arbitrary rent review clauses in tenancy agreements. Landlords will be permitted to increase rent only once a year. Tenants will also be entitled to get rent back if the property is subpar. The Renters’ Reform Bill doubles notice periods for rent increases and offers tenants additional power to fight arbitrary rent hikes.
Allowing Pets
Many tenancy agreements include “no pet clauses,” but the Renters’ Reform Bill will provide all tenants with the opportunity to ask to retain a pet in their house. The proposed guidelines state that a landlord “cannot unreasonably refuse.” This is not always the landlord’s option; for example, if a tenant is renting in a block of flats, the landlord may be limited by the leaseholders’ or housing association’s restrictions. If a landlord allows a renter to keep a pet, they have the authority to require them to get pet insurance.
Councils will be given more authority
In order to purge the industry of the worst offenders, councils will be given extensive powers to deal with rogue landlords. Fines for significant offences will be increased, and improved enforcement powers will assist local governments in combating substandard housing for tenants.
What’s the impact on landlords?
Most landlords will welcome the reforms in general, but greater legislation, as well as tax changes, have caused many landlords to sell their properties. Some advocates argue that the rapid pace of these changes and rising mortgage interest rates would result in a landlord exodus, leaving fewer rental homes and severely limiting rental availability. They have cautioned that growing demand for a limited supply of dwellings may result in higher rents.
There has never been a time when landlords need the help of a professional managing agent more than now. Along with the usual 170+ pieces of legislation that go along with the private rented sector, landlords now need to comply with this bill (once enacted). We are experts in HMO lettings legislation, so if you are managing your own HMO in Kent, don’t hesitate to get in touch with us at lettings@roomsinkent.co.uk or 01233 367 367 for help navigating these changes. We will keep you updated as the changes come into law.
