Renters Reform Bill – summary and reaction
The government has finally unveiled its Renters’ Reform Bill, which contains measures to abolish Section 21 evictions.
The bill will enable tenants to challenge landlords when their properties are substandard without fearing eviction.
Meanwhile the reforms pledge to strengthen landlords’ rights to throw out tenants in cases of anti-social behaviour or where they fail to pay the rent.
A new grounds for eviction will be introduced called “persistent arrears”, while landlords will be able to evict their tenant when they want to sell the property.
There will be a private renter’s ombudsman to deal with disputes between renters and landlords. It will be mandatory for all landlords to join the scheme.
Fixed term contracts are changing to rolling contracts in a bid to give tenants more security.
It’s thought the government needs to create rules for landlords that rent to students, as they currently rely on short-term tenancies due to students leaving at the end of the academic year.
Landlords will only be able to raise rents once per year, while they will need to give two months’ notice when they do, up from one. Tenants will be able to challenge the increases if they are deemed unjustified.
UK landlords will no longer be able to ban renting to benefit claimants and families, while they won’t be able to prevent tenants from having pets.
Meanwhile tenants will be able to claim back rent if the property is below the ‘decent homes standard’, the definition of which is still being developed.
Councils will have more powers to tackle rogue landlords, as they will be able to issue bigger fines for serious offences.
Landlords will have to register on a new property portal, which will enable tenants to see if they are compliant with the rules.
According to the NRLA the government is seeking to integrate information from the Database of Rogue Landlords, which tracks landlords with criminal offences, and make it available to the public.
Propertymark and the NRLA called for an end to selective and additional licensing schemes once the portal is live, so landlords aren’t expected to pay money to both schemes.
The Bill will now move going through parliament, but it’s likely to be subject to lots of alterations before it is certified.
Timothy Douglas, head of policy and campaigns at Propertymark, reckons we are at the start of a 9-12 month process before the measures hit the market.
Rebecca Marsh, ombudsman at The Property Ombudsman, said: “The Renters Reform Bill, as a package, is the most significant set of reforms for the private rented sector in a generation.
“Requiring landlords to have a reason to evict a tenant while at the same time giving them enhanced abilities to deal with anti-social behaviour, it seeks to address issues which TPO regularly sees in the enquiries and disputes we receive.
“Underpinning this is the need to reduce court times and the introduction of redress, both of which will play a fundamental role in ensuring these reforms work on a practical level.
“We absolutely support the need for redress, in the form of an Independent, not for profit, Landlord Ombudsman, as it is better for landlords and for tenants than basic redress schemes.
“This is because the enquiries function will be vital to resolving matters before they become major disputes and will allow an early warning of areas of concern, so landlords can be properly supported in addressing these before they get into more formal processes – be they the formal elements of redress or the courts.
“It is also important that the provision of redress is based on, and for, the interests of the parties and the sector, not the interests of shareholders.
“We look forward to continuing to work with the Department to help them develop an Ombudsman that not only resolves disputes, but also helps tenants and landlords and supports the wider sector and the court reform.”
Oli Sherlock, director at rental market expert Goodlord, said: “The rental sector has never been under more pressure. The ongoing delays to the publication of this Bill have caused a lot of uncertainty for the market at a time when it could ill afford it. Even now, we’re not completely clear on what the final version of this legislation will contain, but at least we have more clarity on the contours after years of speculation.
“There are really positive steps to celebrate here when it comes to tenants’ rights. And we’ve seen some softening of areas that were giving landlords major concerns – such as the ability to evict anti-social tenants or those who consistently miss rental payments. But we can’t hope to sustainably reform and strengthen the lettings industry without meaningfully addressing the structural issues facing the market.
“Right now, all the anecdotal evidence points to a rising number of landlords deciding to sell up. This, combined with a chronic lack of new rental homes being built, is creating a supply and demand issue that is driving up rental prices, creating despair for tenants seeking new homes, and resulting in market conditions which this Bill hasn’t been designed to fix. I think there are also valid concerns around whether the courts will be able to cope with the rise in cases this Bill will likely create, even with increased digitisation.
“The government should not see the publication of this legislation as a job done. It should be the first step in a longer line of urgent changes that are needed. A healthy rental market requires empowered, protected tenants as well as fair-minded, incentivised landlords in order to function. Any legislation that addresses one without the other won’t make the difference it needs to.”
Scott Goldstein, partner at solicitor firm Payne Hicks Beach, said: “The abolition of no-fault evictions has been on the cards for more than four years and the only surprise is that it has taken so long to come to Parliament. Although we have yet to see the Bill, the Government briefings ignore the elephant in the room, which is that it takes a court order to evict a tenant and the workload of the courts is higher than ever.
“Many landlords are honest people who rely on rental income to pay their mortgage. Abolishing no-fault evictions will give unscrupulous tenants another way of delaying, as cases where a landlord has to prove the tenant is at fault take many more months, and can cost thousands more, than no-fault eviction cases.
“An honest approach by the government would have seen an overhaul in the court system administering evictions but that would have required serious investment so I am sad, but not surprised, that it has not happened.”
Gary Scott, partner at legal firm Spector Constant & Williams, said: “Landlords have voiced concern that removal of the no-fault route for eviction leaves in place a possession process which is significantly flawed both in terms of the current permitted grounds for possession and the fact that the Court process is wholly unfit for purpose. In some cases, the process from serving notice to obtain possession has taken in excess of 12 months. In cases of rent arrears of at least two months, this means potentially 14 months of receiving no rental income without being able to obtain possession.
“The Bill proposes to extend the permitted grounds for possession and reform to the Court process. The details of such reform are not given and it is yet to be seen whether they are sufficient and can be implemented satisfactorily.”
Neil Cobbold, managing director at software firm, PayProp UK, said: “After years of delay the Renters (Reform) Bill has finally been published, but it contains no surprises for the industry as the measures were already included in the 2022 Fairer Private Rented Sector white paper.
“While the bill appears to be light on specific details, the government has announced that more information about the proposals will be outlined in another white paper. Unfortunately, more delays will extend the holding pattern the private rented sector currently finds itself in.
“The industry will not be able to press ahead with reform until the government clarifies when it will deliver on changes to evictions, applying decent home standards, introducing a new ombudsman, and a landlord portal.
“We trust the government will consult the wealth of experience and knowledge held by landlords, agents, tenants and other stakeholders to ensure the Renters (Reform) Bill delivers to the benefit of all parties.”
Alex Sullivan, co-founder of Smarter Rent, a property rental agency, said: “While Michael Gove plays down the impact of the renter’s reform bill, saying it will only affect the “minority” of landlords, I disagree.
“I believe it will impact the majority of landlords. But I don’t see why this is a bad thing. If, as a landlord, you don’t believe a tenant has the right to stay in a property they call home, while paying rent on time and respecting the property and if, as a landlord, you don’t believe in transparent price increases that are fair, then you shouldn’t be in the industry.
“Make way for an investor that believes tenants deserve to have security. To have a home. What we need is to make it easier and more attractive for new investment. To change the narrative. By creating energy efficient properties that a tenant can call home for the long-term is a good thing.”