The Renters (Reform) Bill was introduced to parliament by the previous government in May 2023.  It now looks set to be replaced by the Renters Rights Bill.

The purpose of the previous Bill was to introduce groundbreaking rental reforms the then Conservative government felt would have a positive impact on landlords, tenants and the private rented sector as a whole.  The Bill initially made good progress through its various readings but this ground to halt during the lead up to the 2024 General Election.  While the new Labour government effectively shelved the Bill in its existing form, they did subsequently commit to delivering some of the main points it proposed.  The most notable is the abolition of Section 21.

Last month’s King’s Speech underlined the government’s pre-election pledge to give people renting their homes “greater rights and protections, including ending ‘no fault’ evictions and reforming grounds for possession” and confirmed these changes would come in the form of a new Renters’ Rights Bill.  The key aspects of this Bill would be:

• The end of ‘no-fault’ evictions  by abolishing section 21 notices 

• Strengthening tenant rights by giving renters the right to challenge rent increases and demand they keep their pets. 

• Limiting rent increases and preventing tenants from getting locked into automatic rent increases not in line with the current market. 

• The need for a landlord to repay any upfront rent should a tenancy end before the agreed date. 

• Giving landlords greater protection from unscrupulous tenants by introducing a ‘three-strike system’ enabling them to serve a Section 8 notice if a tenant falls into arrears three times.

How will the new Renters Rights Bill impact landlords?

The initial Renters Reform Bill was never popular with landlords.  They recognised they would need to review and update their tenancy agreements to comply with the new regulations and support the introduction of a more structured rental environment.

Having surveyed more than 800 letting agents and landlords, leading lettings platform Goodlord found almost every landlord interviewed felt pessimistic about the introduction of the new rules with 25% feeling “very” pessimistic and 29% feeling “somewhat pessimistic” and only 14% feeling optimistic.  Admittedly, 29% of letting agents feel optimistic about the changes but one would assume this may be because it should reduce conflict between landlords and tenants, conflict they would probably be drawn into in some way.

With regards to how the new Bill will impact landlords, there are some changes that could be more palatable.  In the 2024 Renters (Reform) Bill the new rules for landlords would have included: 

• Adding special clauses to rental agreements setting out rent increases, eviction procedures, and dispute resolution options. 
• The ability to only increase rent once a year and the need to give tenants at least two months’ notice of any changes. 
• The banning of automatic rent review clauses are also banned. 
• The introduction of fines of up to £30,000 if local authorities did not consider rental properties to be of a decent standard.
• Giving tenants the ability to reclaim up to 24 months rather than 12 months rent through rent repayment orders. 
• The introduction of a new ombudsmen service to give tenants advice and support to resolve issues with their landlords.
• The introduction of social rent limits for 2024/25, limiting increases to 7.7% for most tenancies. 
• The removal of the requirement for landlords to verify a digital Certificate of Application with the Landlord Checking Service. 
• A higher CGT liability for landlords when they sold buy-to-let properties. 

The scope of the proposed Renters’ Rights Bill is narrower.  However, if you are a landlord you should start to consider how the main aspects will impact your rentals and what action, if any, you will need to take to ensure you meet the new requirements: 

• How will you deal with the eviction of tenants once section 21 notices/”no-fault evictions” is abolished? 
• How will you respond should a tenant challenge a rent increase you wish to action? 
• How will you decide whether a tenant’s request to keep a pet is reasonable?  How should you respond if you deem the request to be unreasonable?
• How will you respond if your local authority decides you are a ‘rogue’ landlord and chooses to use their new powers against you? 
• What are the new anti-discrimination measures and how will you make sure you do not end up facing of accusations of discrimination? 
• What is the landlord ‘redress scheme’ and how can you make sure it provides you with a fair hearing if you find yourself in a dispute with a tenant?

If you would like to discuss the Renters’ Rights Bill or any other aspect of Landlord & Tenant or property law with one of the property barristers in our Civil Law team, please contact us today.