Renters Reform Bill – what does it mean for landlords?

The Renters Reform Bill has now been unveiled and is being described as “the biggest shake-up to the private rented sector in 30 years!”

What is the Renters Reform Bill? The long awaited Fairer Private Rented Sector White Paper was finally announced on 16th June 2022 after being delayed due to the pandemic. Within this the government has now set out its plans to fundamentally reform the private rented sector to improve the quality of living for private tenants by protecting them from unfair rent increases and supporting them with the cost of living pressures.

Section 21s to be abolished. These changes aim to make it easier for Landlords to regain possession of their property in genuine circumstances. Landlords will no longer have to regularly suffer missed rent payments and the notice period to evict anti-social Tenants will be shortened. They propose to reform the Section 8 Notice, expanding and strengthening the grounds on which a Landlord can evict a Tenant. Many of the grounds will become mandatory meaning that Landlords can be assured that a judge will grant possession during court proceedings.

Periodic tenancies to become standard. Assured Tenancies or Assured Shorthold Tenancies will be replaced with periodic tenancies whereby Tenants will be required to provide two months’ notice to end the tenancy. This should provide Landlords with more time to find a new Tenant and avoid their property sitting vacant between tenancies.

Notice periods for rent increases to be doubled. The minimum notice which Landlords will be required to provide will increase to two months once the law comes into effect. Tenants will also be given the support to challenge unfair rent increases that do not reflect the market price. Rents can still be reviewed every 12 months, but Landlords should ensure that they, or their Managing Agent, are actively engaged in the local rental market. This will ensure correct rents are being charged and any rent reviews are carried out in line with the new rules. Many Landlords are unaware that market rents have increased as much as 10% in Bexhill and surrounding areas in the last 12 months.

Landlords and Agents unable to discriminate against Tenants. The Government plans to outlaw blanket bans on Tenants with children, pets, and those claiming benefits. However, Landlords can rest assured that with thorough vetting, regular property inspections and clearly defined clauses relating to pets, their property will be well looked after. It is also common for Tenants with children and pets to stay longer in tenancies. In addition, the Tenant Fees Act 2019 will be amended to allow Landlords to request that their Tenants have pet insurance in place.

Stronger enforcement against rogue Landlords and unlawful property agents. It will become mandatory for all private Landlords to join a single, Government approved, ombudsman. This will not only regulate the industry but also provide support to both Landlords and Tenants if a dispute were to arise. A new digital property portal will be introduced. The portal will “support good Landlords to demonstrate regulatory compliance” and “support efforts to raise standards in the sector and reduce the number of non-decent rented homes by 50% by 2030”.

When does the Renters Reform Bill become law? Before it can become law, the bill must pass through multiple stages in Parliament where MPs will have a chance to analyse the legislation. There is no set time limit for when the bill will come into force, but we advise Landlords to be prepared.