The Renters’ Reform Bill represents a significant legislative effort to enhance the rights and protections of tenants within the private rental sector.
The Renters’ Reform Bill is a cross-party bill that originated with the Conservative Party in May 2023, but it did not finish all its parliamentary stages before the dissolution of Parliament earlier this year. The King’s Speech in July 2024 referred to the Renters’ Rights Bill 2024, which would be introduced by the new Labour government.
The second reading in parliament takes place on 9th October 2024, and the 3rd reading will likely to be before Christmas 2024.
These initiatives are designed to create a fairer rental market, addressing the needs of both landlords and tenants.
Key Reforms
Section 21 ‘no-fault’ evictions
The main change to the bill is the abolition of Section 21 ‘no-fault’ evictions. This will provide renters with more security and stability by replacing fixed-term agreements with periodic assured tenancies. However, tenants will be required to give 2 months’ notice to end the tenancy.
Periodic assured tenancies
Under the new bill, all existing tenancies will automatically convert to periodic tenancies at the commencement, and all periodic tenancies will be monthly or 28 days or less. Any period above monthly will be prohibited and defaulted to monthly if incorporated. There will be no transition period.
Enhanced living standards
Introduce a Decent Homes Standard (DHS) to ensure safe and decent homes for tenants, supporting the government’s goal to reduce non-decent rented homes by 50% by 2030. Local councils will be granted effective and proportionate enforcement powers, and the government will publish the standard in due course.
Regulating Rent increases
Landlords can only increase rents once per year with at least two months’ notice before the new rent takes effect using a Section 13 notice. Rent review clauses in tenancy agreements will no longer be valid. The new rent must align with market rates; if challenged by the tenant, the First-tier Tribunal will determine if it reflects open market rent.
Grounds for possession
With the removal of Section 21, landlords will need to rely solely on Section 8 grounds for possession. The bill expands the list of grounds for possession on which landlords can reclaim their properties, including new mandatory and discretionary grounds whilst protecting tenants with appropriate safeguards.
Greater transparency
By clarifying tenant rights and landlord responsibilities, the bill aims to empower renters with the knowledge they need.
Private Rented Sector Landlord Ombudsman
The bill will introduce the creation of a private rented sector landlord ombudsman. All landlords will be required to register with the ombudsman service, which will handle tenant complaints and disputes without requiring court action. The service aims to provide tenants with a free, impartial, and legally binding resolution to their complaints. Failure to register with the ombudsman could lead to fines of up to £7,000. Repeated offences may result in more severe penalties or even criminal prosecution.
Private Rented Sector database
A private rented sector database will be introduced for use by landlords and local authorities. All landlords are required to register themselves and their properties on the database. Failure to register may result in penalties up to £7,000 and properties will not be eligible for possession proceedings unless correctly registered.
Discrimination
The bill prohibits landlords and letting agents from discriminating against potential tenants based on whether they receive housing benefits (‘No DSS’) or have children. Landlords can still carry out affordability checks, but they must not reject applicants solely because they receive benefits or have children. Violations of these rules could lead to civil penalties.
Rental bidding
The practice of rental bidding will be abolished. Landlords and agents must advertise a set rental price and are prohibited from accepting offers above this rate.
Pets
The bill establishes a tenant’s right to request permission to keep a pet in rental properties. Landlords cannot unreasonably refuse this request and must respond in writing within 28 days, or within 7 days if additional information about the pet is required.
Tenancy deposit schemes
The current law requires landlords to protect a tenant’s deposit within 30 days. Failure to do so prevents them from serving a Section 21 notice, with the only remedy being to return the deposit in full or with agreed deductions. However, the new bill allows landlords who miss the 30-day deadline to protect the deposit late and still serve a notice for possession, provided the deposit is protected and the prescribed information is given to the tenant. There are exceptions to this rule, where landlords can bypass the deposit protection requirements in certain circumstances, such as returning the deposit and specific grounds for possession.
When will the Bill come into force?
It is expected the new tenancy system will be in place by summer 2025.
If you would like to discuss further, contact Catherine Giles or Harriet Tolhurst.
