Renters Reform Bill – A Major Overhaul in Private Renting Coming Soon!

The Queen’s Speech delivered in May 2022 announced that the current Government intends to introduce substantial changes to the way in which private residential property can be let in this country. It aims to redress the perceived imbalance between landlords and tenants and provide greater rights for tenants. The Government aims to:

“Deliver the biggest change to renters’ law in a generation, improving the lives of millions of renters by driving up standards in the private and socially rented sector, delivering on the government’s mission to level up the country”

There are currently estimated to be 4.4 million households in private rented accommodation.

The proposals for the Renters Reform Bill were set out in the Government’s A Fairer Private Rented Sector white paper released in June 2022; the Government is seeking to introduce the Bill before May 2023.

The most publicised and perhaps controversial aspect of the bill is the abolition of the right for landlords to serve s.21 Notices terminating assured shorthold tenancies on 2 months’ notice on a no-fault basis.

In future landlords will need to terminate tenancies by serving s.8 Notices.  These are fault-based Notices and have traditionally represented a route to recover properties where, for example, the tenant had rent arrears.  These will now be used to make eviction mandatory in certain circumstances, e.g., where a tenant has had at least two months’ rent arrears three times within the previous three years regardless of the arrears balance at the hearing.

A new ground will be introduced for landlords allowing them to serve s.8 Notices where they wish to recover possession to allow them or close family members to move into a rental property (but not in the first six months of a tenancy).  However, what is clear is that landlords will not be able to simply “move tenants on” for whatever reason whenever it suits them.

There are a number of other significant measures planned in the legislation including the following:

• Decent Homes Standard – a requirement that all rented properties comply with the Decent Homes Standard currently applicable in social housing with local councils having the tools to enforce breaches.
• New court process – an aim to introduce a package of wide-ranging court reforms that will target the areas that slow down the possession process, for example, increasing county court bailiff capacity, introducing a paperless process.
• Landlord rent increases – limited to once per year with a minimum of two months’ notice.
• Tenant’s notice – tenants must give two months’ notice if they wish to vacate.
• Ombudsman – all landlords to be members, substantial powers to resolve issues between landlords and tenants without the courts becoming involved and ability to enforce binding decisions.
• Pets – requests by tenants to have a pet not to be unreasonably refused.
• No blanket DSS or family bans – it will be illegal to have blanket bans on letting to families with children or those in receipt of benefits.
• Property portal – this will be set up to enable allow landlords to understand their legal obligations.
• Enforcement – additional powers for local authorities and Ombudsman.

This is an area that has been subject to huge statutory intervention over the years.  The new proposals lead to yet further change; hopefully they will create fairness for both sides with the systems in place to swiftly resolve any issues that arise.  The devil will be in the detail when the legislation is approved by Parliament, and we will have to wait and see whether it will be a positive development or cause more landlords to exodus from the market and further reduce the housing stock available for rent.