Renters Reform Bill – what landlords need to know

The Renters Reform Bill is finally before parliament. It has been a long time in coming. The Conservative Party committed to a ‘Better Deal for Renters’ in its 2019 manifesto. However, it then took the government until June 2022 to publish the white paper, ‘A fairer private rented sector’.

The proposals in the white paper caused consternation among landlords. In recent years, the sector has seen profits drop as tax relief on mortgages has been withdrawn. Landlords have also been hit by a 3% stamp duty surcharge when buying new properties. For many the plans the government outlined in the white paper were the last straw: many landlords have sold up and exited the sector altogether.

The Renters Reform Bill has yet to become law. At the time of writing, it is waiting to receive its second reading in the House of Commons. This means it still has to wend its way through to a third reading, and then through the House of Lords before it can receive Royal Assent. In that time, it’s likely to be subjected to amendments.

That said, landlords will be keen to know what the potential outcomes of the new legislation will be. In this post, we look at 8 key reforms that are likely to introduced.

1. An end to ‘no-fault’ evictions

The cornerstone of the legislation is the abolition of ‘no-fault’ Section 21 evictions. This means landlords will have to rely on Section 8 to evict tenants. Section 8 will be strengthened to include new grounds for possession. For example, landlords will be able to use Section 8 if they need to sell a property or if tenants are in repeated serious arrears. Notice periods for criminal or antisocial behaviour will also be lowered.

2. Changes to rent increase notice periods

Landlords will have to give tenants at least two months’ notice of any rent increase. They will not be able to raise the rent more than once a year.

3. And end to fixed-term tenancies

Fixed-term tenancies ­– typically for a year ­– will end. Instead, landlords will have to offer assured, periodic tenancies. This means the tenancy essentially becomes a rolling one and you won’t be able to evict tenants without valid grounds. Renters will have to give two months’ notice if they want to leave.

4. Compulsory landlord register

After the Renters Reform Bill comes into force, landlords will need to sign up to a national register. If they don’t, they will face fines for advertising or letting out a property. Tenants will be able to view certain information about landlords and their properties via a new Privately Rented Property Portal.

5. Landlords won’t be able to unreasonably refuse pets

Currently, landlords can stipulate in tenancy agreements that pets aren’t allowed. This will end, except where the landlord has a good reason. For example, a landlord could validly refuse to let a tenant keep a large dog in a small flat with no outdoor space.

6. A property ombudsman

Currently, a property ombudsman can settle disputes between tenants and landlords who have letting agents. When the Renters Reform Bill passes, the property ombudsman will be able to handle disputes involving all landlords.

7. Properties must meet the Decent Homes Standard

Currently, all social housing must meet the Decent Homes Standard. In brief, this means a home must not have serious hazards, must be in a decent state of repair, have reasonable modern facilities (no bathrooms older than 30 years or kitchens older than 20 years), and must provide a reasonable degree of thermal comfort. After the Renters Reform Bill has passed, the Decent Homes Standard will apply to privately rented properties too. You can find more information on the Decent Homes standard here.

8. No more bans on tenants on benefits or with families

If tenants are able to pay the rent, you won’t be able reject them simply because they have a family or are on benefits. This will make tenant screening even more important, especially in terms of running affordability checks.

What happens to the Renters Reform Bill next?

As we mentioned earlier, the Renters Reform Bill still has some way to go through parliament before it becomes law. It may be that some proposals are strengthened further, while others are watered down. Indeed, the Daily Telegraph reports that Levelling Up Secretary Michael Gove is planning to backtrack on reforms for student lets. This could result in an amendment allowing these rentals to continue on fixed-term contracts.

Whatever happens next, we’ll be sure to let you know. In the meantime, if you’re looking for an accountancy firm that truly understands the buy-to-let market, be sure to check out our Platinum Service for Landlords.