Renters’ Rights Bill: new rules for landlords and tenants

On 11 September 2024 the Labour government presented its plan for the rental sector. The Renters’ Rights Bill will dramatically shake up the rental sector for private and social landlords, though inevitably it is likely that higher standards and more rights will also come with increased rents particularly in the private sector.

The current version of the Bill is lengthy with some 226 pages of proposed changes. It has only had its first reading so there are bound to be some amendments, but some of the key changes are as follows:

• Abolishing fixed term tenancies – all tenancies will be periodic meaning they will run from week to week or month to month.
• Tenants can serve a two-month notice to quit to terminate their tenancy.
• No s.21 notices (no non fault evictions) can be served by landlords.
• Some new grounds for possession will be introduced including where:
  • the landlord wants to redevelop or sell;
  • a superior lease ends;
  • enforcement action has been or is being taken by a local authority;
  • it was supported accommodation and the support has ceased; or
  • where the landlord or a family member wishes to occupy as their only or principal home (retained from the existing Housing Act 1988);
• Changing some existing grounds for possession (for example, Ground 8 will require 13 weeks or three months of rent arrears instead of the current eight weeks’ or two months’ arrears).
• Requiring section 13 notices to be served to increase rent.
• Giving the right for the tenant to challenge rent increases.
• Allowing a tenant to keep a pet if they request consent, this will be subject to any other wider restrictions.
• A new landlord database.
• Ban on rental bidding wars.
• Prohibiting tenancies of more than seven years from being assured tenancies.
• No discrimination against tenants on benefits or tenants with children.

Many renters will see some of the changes as a welcome rebalancing of the renter/landlord relationship – such as the right to end tenancy agreements with two months’ notice, the right to challenge rent increases, and more transparency into landlords’ histories through a new database. However, this greater level of risk for landlords will likely be reflected in increased market rents.

The obligations for landlords to attend to a property within 14 days of a report of a property issue, to comply with the Decent Homes Standards (under ‘Awaab’s Law’), and to be liable for fines of up to £7,000 for failure to achieve this, will give tenants greater legal protections and higher property standards. This will also add to costs for landlords, and drive increased demand and costs for contractors, which are in short supply. Again, this is likely to be factored into new rental prices.

Ultimately, we should expect these changes to create higher standards, better homes, and more rights for tenants, therefore any increase in rents should be seen as a positive market correction which will raise the bar for the whole housing sector. Yet inevitably these changes and the risks of getting it wrong may cause some landlords to exit the market at a time when rental supply is already constrained, and in a cost of living crisis, tenants in the short term may not welcome the increased rents, even with the added benefits they will bring. With the introduction of the Renting Homes (Wales) Act 2016, we have seen many landlords leaving the sector and many sold up before the changes took effect. But some landlords may decide to take advantage of these changes and acquire more property to continue renting on the market.

Potential issues

There is nothing within the Bill which deals with how the courts will manage possession claims, so one can expect delays with the court procedure. There will be increased pressure and demand on the new Rented Sector Landlord Ombudsman so the government will need to ensure enough staff are available to deal with any influx.

In relation to the grounds for possession, there is nothing preventing a tenant from keeping any rent arrears below the longer 13 weeks of arrears to avoid possession proceedings. Furthermore, if a landlord intends to rely on the Anti-Social Behaviour ground for possession they will need to provide “substantial evidence” so there will be a higher burden on landlords to prove this ground. Importantly there appears to be no transitionary provisions in the Bill meaning landlords will have little time to plan for its implementation. The above could be subject to change.

There is a lot to unpack here, and we expect the government will want to push this through as quickly as possible so we could see these changes to come into play early next year. We will wait and see. If you have any queries regarding this and what the rules are for landlords and tenants, do get in touch with our housing team.