Renters’ Reform Bill – a guide for rural landlords
The Renter’s Reform Bill was reintroduced to Parliament in May 2023 after first being promised back in 2019. It aims to deliver a “fairer private rented sector for tenants and landlords”.
The contents of the Bill are actually pretty familiar in that they are based around a Conservative Party election manifesto commitment to abolish Section 21 evictions and reform grounds for landlord possession. It also reflects the contents of a White Paper on the private rented sector which was published in June 2022.
The headline reforms in the Bill are to:
- Abolish section 21 ‘no fault’ evictions and fixed term tenancies. All tenants with an assured tenancy or assured shorthold tenancy will move to a periodic tenancy. Tenants will need to provide two months’ notice when leaving a tenancy. Landlords will only be able to evict a tenant in reasonable circumstances.
- Change the grounds on which landlords can gain possession of the property. These will include if a landlord wishes to sell the property or if they or a close family member wants to move in. Misuse of this provision could lead to fines of up to £30,000. If a tenant has been in at least two months’ rent arrears three times within the previous three years, landlords will also be able to evict them. There will also be changes to make it easier to repossess a property in cases of anti-social behaviour.
- Landlords will be able to raise rents annually to market levels but must provide two months’ notice of any change, rather than one month as is currently the case. Tenants will be able to challenge above-market rent increases through the First-tier Tribunal (Property Chamber), to prevent unreasonable rent increases being used to force tenants to vacate a property.
- All landlords will be required to join a new Private Rented Sector Ombudsman. The government is saying this will provide impartial and binding resolutions to many disputes and prove quicker, cheaper, and less adversarial than the court system.
- A digital Privately Rented Property Portal will be set up to help landlords understand their legal obligations and demonstrate compliance and to help tenants understand the terms of their tenancy agreement. Landlords will be required to sign up and register all properties they let out.
- Tenants will have the right to request a pet in the property, which a landlord cannot unreasonably refuse although they will be able to insist on pet insurance to cover any damage.
In addition, the government has committed to bringing forward separate legislation at the earliest opportunity to:
- Apply the Decent Homes Standard to the private rented sector for the first time. Previously, this has only been applicable for social housing. There was a consultation in September 2022 to get views on how the DHS should be applied to the private sector, which the government says it will respond to shortly.
- Make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children.
- Strengthen local councils’ enforcement powers and introduce a new requirement for councils to report on enforcement activity – to help target criminal landlords.
It is important know that nothing has changed at this stage.
Measures contained in the Bill will need to overcome the normal legislative hurdles, requiring Parliamentary time. During the progress of the Bill, it will be subject to amendments.
As Strutt & Parker is a Propertymark member, we will be updated by the professional body, and we will use this information to keep you updated.