Recently, it’s been announced that the long-awaited Renters’ Reform Bill will officially be enacted by the government. The headline from this new legislation is the end of “no-fault evictions”, but there’s much more under the surface for property owners and tenants to be aware of. In this blog, the City Relay team have gone through the new legislation and made sense of what it means going forwards.
What Does the Bill Say?
First mooted in 2019 as part of the Conservative Government’s manifesto, this bill is designed to give a “better deal to renters”. The biggest takeaways from this legislation are:
- Section 21 evictions are to be abolished
- More comprehensive possession grounds are to be introduced
- The notice for rent increases will be doubled
- Tenants with pets will have greater rights
Let’s look at these points, further amendments, and some potential future changes in greater detail, and explore what it will mean for landlords and tenants.
The Abolition of Section 21 Evictions
Previously, landlords could use a legal process called a Section 21 eviction. This process was used by landlords in England and Wales to regain possession of their property from assured shorthold tenants, and it allowed landlords to evict tenants without providing a specific reason for the eviction.
Now, there are stricter rules on how tenants can be evicted. Now, landlords will only be able to evict tenants in “reasonable circumstances”. These include needing to move into the property themselves, a family member requiring housing that can’t otherwise be provided, or continued non-payment of rent.
More Comprehensive Possession Grounds
This bill also makes it easier for landlords to repossess their properties in cases of anti-social behaviour or where the tenant repeatedly fails to pay rent. In a welcome move for landlords, they’ll now be able to recover their property while avoiding drawn-out cases.
The Notice Period for Rent Increases Is Doubled
Currently, a rent increase needs to come with one month’s notice. However, once this bill is enacted, this will increase to two months. Beyond this, increases can only be made once a year, and the government has said that it will review “disproportionate increases” to further protect renters in England and Wales.
Pets Can’t Be Banned
As well as renters having more rights under this bill, their pets are also set to benefit. Under the Renters’ Reform Bill, landlords won’t be able to “unreasonably withhold consent” to tenants having pets in the home. This is good news for pet owners, as around one in 10 households in London have a dog, according to PetMagnet.
The legislation also states that decisions have to be made within a reasonable timeframe, and this avoids both parties being left at a standstill.
The other changes as part of this bill include periodic changes becoming standard, a new ombudsman for landlords, and a brand new property portal for tenants and landlords.
Starting with how tenancies will work post-Renters’ Reform Bill, periodic tenancies will effectively end assured shorthold tenancies (AST) as we know them. Instead of having a six- or 12-month AST, all tenancies will be on a rolling basis, with no set end date. This will also change the way that notice is provided by tenants, increasing to two months. This helps to “ensure landlords can recoup the costs of finding a tenant and avoid lengthy void periods”.
Next, the new property ombudsman will have powers to “put things right for tenants”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000. Their ruling will be binding for landlords, and it can even result in rent being reimbursed. It will be mandatory for landlords to join, and they won’t be able to let out properties without joining.
Finally, there’s the new property portal for landlords and tenants. This digital portal will “provide a single ‘front door’ to help landlords understand, and demonstrate compliance with their legal requirements”. While the nature of this portal is still to be decided, with the government still exploring a plethora of options. It is their view that they’ll “reduce the number of non-decent rented homes by 50% by 2030”.
Changes in the Future
Once the Renters’ Reform Bill is enacted, further changes are likely to follow, with two big changes that most likely.
First, a white paper titled “A fairer private rented sector” was published in 2022, and this recommends that minimum housing standards should be introduced across the board. This recommendation says that private housing should fall in line with social housing standards, adhering to the Decent Homes Standard for the first time. According to the government, applying minimum standards to the sector for the first time, alongside the other proposals outlined in the bill, aims to “halve the number of poor-quality rented homes”.
Second, there will be big changes for how tenants are judged by landlords. The government has already indicated that it plans to bring forward legislation “at the earliest opportunity” to further protect people with children or people on benefits. In short, this means that landlords won’t be able to exclude tenants based on their family makeup or income, opening the doors to a whole new market for both landlords and tenants.
What’s the Next Step?
With this new legislation set to take effect soon, it’s vital that landlords and tenants are prepared for what it could mean. At City Relay, we regularly undertake assessments of the industry, and we believe that a solution is more than possible.
Our flexible letting services give landlords and tenants the best of both worlds, without getting drawn into the ever-more-complicated world of assured shorthold tenancies. At City Relay, we match perfect properties with the right guests, ensuring that all parties are delighted with the outcome.