On Wednesday 17th May, The Government released The Renters Reform Bill. It is the most significant piece of legislation in the Private Rented Sector for a generation and is aimed at improving the renting experience in the United Kingdom.
The rental market is a crucial component of the housing sector, catering to millions of individuals and families. In an effort to address various issues and improve tenants' rights and living conditions, the government has introduced the Renters Reform Bill. While it aims to enhance protections for renters, the draft legislation also has significant implications for private landlords which you should be aware of such as changes to Section 8 to replace Section 21, a new property portal and how all private landlords will be required to join a landlord redress scheme. It also explains that tenants will be given the legal right to request a pet in their home, which a landlord must consider and cannot unreasonably refuse.
Abolishing Section 21 "no-fault" evictions:
One of the key provisions of the Renters Reform Bill is the abolition of "no-fault" evictions, also known as Section 21 evictions. Currently, private landlords can evict tenants without providing a specific reason, as long as the fixed-term tenancy has ended or is on a periodic basis. However, the Renters Reform Bill will require landlords to provide a valid reason for eviction, such as rent arrears, anti-social behaviour, or the landlord's intention to sell the property or move back in. This change gives tenants greater security and makes it more challenging for landlords to regain possession of their properties.
Impact on landlords: Private landlords will need to familiarise themselves with the new grounds for eviction and ensure they have valid reasons before initiating the process. This change may make it more difficult for landlords to regain possession of their properties quickly, however the government has acknowledged that it will digitise some of the court process to help speed up evictions.
Extending notice periods:
Under the current regulations, landlords are required to provide a minimum notice period of two months to tenants for eviction (Section 21 notice). However, the Renters Reform Bill proposes extending this notice period to four months in most cases. This change aims to provide tenants with additional time to find alternative accommodation and reduce the risk of homelessness.
Impact on landlords: Private landlords will need to adjust their planning and timelines accordingly, as they will have to wait longer before regaining possession of their properties.
Strengthening tenant rights:
The Renters Reform Bill aims to strengthen tenants' rights by introducing various provisions to improve their living conditions and address issues they may face. Some of these include:
a. Minimum property standards: Landlords will be required to ensure that their rental properties meet certain minimum standards, including health and safety requirements and essential amenities.
b. Access to redress schemes: The bill proposes setting up a Landlord Ombudsman, a redress schemes which will allow tenants to seek resolution for complaints regarding property conditions or landlord behavior.
c. Limiting rent increases: The Renters Reform Bill introduces measures to provide greater stability to tenants by limiting rent increases to once per year and tying them to inflation or other set measures.
Impact on landlords: Private landlords will need to ensure their properties meet the prescribed minimum standards to avoid penalties or legal disputes. Additionally, limitations on rent increases may impact landlords' ability to adjust rental prices according to market conditions.
Conclusion:
The Renters Reform Bill introduces significant changes aimed at enhancing tenant rights and living conditions. While these changes are positive for renters, it will undoubtedly put some private landlords off buy to let altogether and we are likely to see an increase in both evictions and landlords selling up prior to the final abolition of Section 21.