"While there’s been a lot of debate regarding the Renters’ Rights Bill, the ultimate aim is to protect renters and ensure landlords are operating fairly. Fortunately, the majority of landlords are already complying, with 68% of tenants saying they have a good landlord"
- Jon Cooper - Aldermore
The Renters’ Rights Bill has taken on various guises. Originally the Renters (Reform) Bill under previous Conservative governments, all variations have aimed to transform the private rental sector (PRS) to greater or lesser extents. Since then, the Bill has passed through the House of Commons and is currently making its way through the House of Lords with a commencement date slated as early as this summer.
Despite the Bill potentially coming into effect in a matter of months, many landlords are unaware of the implications of the Bill, as well as the corresponding support available. To help educate landlords, I’ve broken down the various clauses of the Bill and the key things landlords need to know.
What you may have already heard of
Our research highlighted the most known aspects of the Renters’ Rights Bill, which landlords have heard about – from the Abolition of Section 21 and shorthold tenancies to the Decent Homes Standard applying to the PRS. On average, around 85% of landlords are aware of these proposed changes, but that still leaves a significant group who might be caught unaware.
Abolition of Section 21 ‘no fault’ evictions – perhaps the most well-known and widely discussed clause proposed in the Renters’ Rights Bill.
Currently, landlords can end a shorthold tenancy without having to provide a reason or prove any wrongdoing by the tenant, so long as they provide a minimum of two months’ notice period. This was met with widespread pushback from landlords and some MPs when it was initially proposed by Michael Gove, the former Housing Secretary, and was subsequently watered down. However, Labour have made this a central pillar of the new legislation and will be pursuing it as a priority, but may implement a phased rollout to allow time for adjustments.
Abolition of shorthold tenancies – if this change is implemented, shorthold tenancies will move onto a single system of rolling tenancies and will roll by every month, with no specified end date. Tenants would then need to provide two months’ notice when leaving a tenancy, and landlords would only be able to evict a tenant under "reasonable" circumstances.
Ensuring possession grounds are fair to both tenants and landlords – the Bill clarifies and expands grounds for possession, while ensuring tenants are protected from arbitrary eviction and given enough time to find a new home.
As part of this, there will be new protections for tenants who temporarily fall into rent arrears, which will protect both parties by preventing tenancies which are otherwise viable from ending. To support other changes proposed in the Bill, landlords will be prohibited from gaining possession if they have not properly protected a tenant’s deposit or registered their property on the PRS database. However, where a tenant is at fault, landlords can give notice at any point in the tenancy, e.g. if a tenant commits antisocial behaviour, is damaging the property, or falls into significant arrears.
Applying the Decent Homes Standard to the PRS – the Decent Homes Standard is currently in place for social housing, and the Bill aims to enforce this for all tenants in order to give private renters safer, better quality homes. This change would require rental properties to meet certain safety, heat and functionality requirements with modern facilities and services.
Positively, the original consultation into the Decent Homes Standard in the Private Rental Sector published by the last Conservative government found 79% of private rental sector properties already met this standard – but for the 21% of properties which don’t, landlords will be required to foot the upgrade costs.
What you may not have heard of
Our research also uncovered the elements of the Renters’ Rights Bill which have the lowest levels of awareness among landlords. Around a quarter of landlords were unaware of any of the below proposed changes, despite the considerable impact they could potentially have on the PRS.
Putting an end to rental bidding – this change would prohibit landlords and agents from asking for or accepting offers above the advertised rent. Landlords and agents will be required to publish an asking rent for their property, and it will be illegal to accept offers made above this rate.
The aim of this change is essentially to ensure rents are in line with market rates and rent increases only occur once a year. Additionally, landlords will only be permitted to request one month’s rent in advance, along with a security deposit and can no longer ask for rent upfront.
Strengthening local authority enforcement – in an attempt to crack down on landlords failing to meet the Decent Homes Standard, local authorities will be given enhanced resources, staffing and powers to uphold tenant rights, in order to report on enforcement activity.
Strengthening rent repayment orders (RRO) – rent repayment orders are designed to deter landlords from breaking tenancy laws and empower tenants to hold them accountable when they do. An RRO requires landlords to repay rent to their tenants if they commit certain offences. The Renters’ Rights Bill strengthens protections by expanding the list of offences that can trigger an RRO.
It will also extend both the time frame for tenants to apply—from 12 to 24 months—and the maximum amount of rent a landlord can be ordered to repay. Crucially, the Bill introduces tougher penalties for repeat offenders, ensuring that landlords who repeatedly break the law face the maximum financial consequences.
New private rental sector database for landlords and tenants – the aim of this new database is to help landlords understand and demonstrate their compliance with legal requirements. This will also provide increased transparency and information available to tenants to make informed decisions when entering into a tenancy agreement and throughout their renting journey.
Perhaps most importantly, it will also support local councils, helping them target enforcement activity where it’s needed most. Landlords will be legally required to register on the database, and whilst there will be a fee to do so, the Government has said it will aim to ensure the cost is “proportionate and good value”.
Establishment of new PRS Ombudsman – it will be compulsory for all private landlords in England to join the Government-approved redress scheme, which aims to resolve disputes between tenants and landlords, providing quick, fair, impartial and binding resolutions. There will be an annual fee to have a membership to the ombudsman, although the cost has yet to be announced.
Other elements of the Renters’ Rights Bill to get your head around
Apply Awaab’s Law to the PRS – this would set clear legal expectations about the timeframes within which landlords must take action to make homes safe where they contain serious hazards.
Strengthened right to request a pet in the property – landlords must consider and can’t unreasonably refuse a request for a pet in their property. To support this, landlords will be able to require pet insurance to cover any damage to their property.
Doubling notice period for rent increases – rent increases will be limited to once per year, and the minimum notice landlords must provide of any change in rent will be increased to two months.
Prohibiting rental discrimination – this will make it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children.
Stronger protections against back-door evictions – this will ensure tenants are able to appeal excessive above-market rents, which are purely designed to force them out.
While there’s been a lot of debate regarding the Renters’ Rights Bill, the ultimate aim is to protect renters and ensure landlords are operating fairly. Fortunately, the majority of landlords are already complying, with 68% of tenants saying they have a good landlord.
There is still time for landlords to get their heads around the Bill, and ensure they are prepared when it comes into effect later this year, so they can feel confident when operating in this new era.
