Housing Minister Matthew Pennycook has suggested the Renter’s Rights Bill could be enacted “within the first half or around summer next year” following its introduction in Parliament on 11th September 2024. But property commentators have warned the reforms could impact the supply of private rental housing, and further burden the courts system.
The Bill is intended to overhaul private renting in England and will introduce a ban on so-called ‘no fault’ evictions, force landlords to publish asking rent and stop bidding wars, and prevent landlords from blocking tenants on benefits or who had children or pets.
It will also extend Awaab’s Law, introduced in the wake of the death of Awaab who was living in poorly maintained and mould-infested social housing accommodation, to the private rental sector – requiring landlords to fix issues like damp and mould within a specific timescale.
Work to reform the rented sector began under the previous Conservative government under the Renter’s Reform Bill but did not make the cut in the final days of Parliament after Prime Minster Rishi Sunak called the General Election held on 4th July 2024. Among the intentions of the updated bill are
- Applying the ‘Decent Homes Standard’ to the private rented sector for the first time setting clearer expectations so tenants can expect safe, well-maintained, and secure living conditions. Landlords who fail to address serious hazards can be fined up to £7,000 by local councils and may face prosecution for non-compliance.
- a ban on in-contract rent increases. Landlords will not be able to include mid-tenancy increases in contracts and would only be able to raise the rent once a year, and to the market rate.
- The introduction of a new ‘Private Rented Sector Database’ to help landlords understand their obligations for compliance and provide tenants the information they need to make informed choices for new tenancies. It will also enable councils to focus enforcement where it is needed most.
A trial is ongoing in Birmingham introducing ‘lettings logbooks’ to help with the collation of data associated with rental property and includes tools to help Landlords identify compliance requirements in different council areas and assemble required data and documentation.
While consumer groups have welcomed the news, property commentators say there are wider considerations for the sector, not least the impact on supply of rental accommodation given the continued increase in demand.
“We are pleased that the UK government has prioritised the Renters’ Rights Bill in its legislative agenda and set out its plan to strengthen tenant rights,”
said Law Society of England and Wales president Nick Emmerson.
“As the housing crisis spirals out of control, it is vital that renters are afforded clear rights that protect them from unjust treatment and homelessness. Ending ‘no-fault’ evictions is a critical step in bolstering these protections. However, more details are needed on how the government will ban ‘no-fault’ evictions, while balancing tenant rights with landlords’ routes to repossessions. Maintaining this balance is key in reforming the rental market.
“We also urge the government to invest in both the legal aid system and the courts to ensure renters can access justice and are protected when facing eviction.”
Sarah Taylor, a property dispute resolution partner with Excello Law suggests court backlogs currently impacting criminal, civil and family proceedings could be exacerbated by the proposed reforms.
“This ban on no fault evictions is good news for tenants and should protect them from unscrupulous landlords who decide to serve notice on the tenant with no good reason. The proposed legislation should not adversely affect good landlords who are fair and reasonable when considering when to obtain possession of their properties.
“The risk to both tenants and landlords is the existing backlogs in the Court system. Trying to obtain possession orders will be protracted, causing uncertainty and delays for both landlords and tenants. There is a risk that landlords who are unhappy with the proposed changes, may decide to sell their rental properties, leading to a shortage of good rental properties for prospective tenants. It remains to be seen whether the legislation will actually solve the issues that it is supposed to.”
Scott Goldstein, partner and property disputes specialist at law firm Payne Hicks Beach, comments:
“The plan to abolish section 21 no fault evictions for existing tenancies as well as new tenancies will send a shockwave through the sector. It shows that the new government means business. Expect a huge surge in section 21 notices served in the time before the legislation takes effect; and a bulge in possession proceedings two months later when the notices expire.
“The county court system is completely broken. It now takes many weeks to process claims. We must hope that the government invests in the courts to cope with the expected influx in new claims.”
Representing the estate agency sector Timothy Douglas, Head of Policy and Campaigns at Propertymark, said:
“Having met with the Housing Minister, it is clear his intention is for these reforms to overhaul private renting in England. They are a long-held manifesto commitment from Labour, with the new government at Westminster using their mandate for reform. Whilst Propertymark acknowledges the drive towards improved standards, the UK Government must fully understand and recognise the impact that these changes will have with agents up and down the country left wondering how this legislation will help meet the much-needed demand for homes for people to rent.
“With such significant changes to the current tenancy regime there must be a commitment to ensure the court system and grounds for possession are robust and fit for purpose. Furthermore, without an enhanced, effective and well-resourced enforcement regime from local authorities it is unlikely that any benefits from the reforms will be realised. Propertymark will continue to make the case for evidenced based policies that support a flexible and fair private rented sector for all.”
And Jonathan Rolande, commenting on behalf of the National Association of Property Buyers said the new policy is unlikely to make life better for tenants
“There is no doubt that some renters live in fear of a Section 21 arriving one morning giving them two months’ notice to leave. But anyone hoping for a silver bullet to solve housing issues is in for disappointment. Firstly, the Section 21 could only have been used to end a tenancy after a fixed period. In other words, two month notice could only be given on Month 10 to end a 12 month agreement. Uncertainty comes for tenants on a periodic ‘rolling’ tenancy where the notice could have arrived at any time. But it is a two way street. Tenants also had flexibility in a periodic tenancy, not being tied into a six or twelve month agreement.
“I’d ask how many landlords used Section 21 to evict good tenants when they are not selling the property? I’m not sure anyone has the data but I suspect the number is low. Why would they? Yes, if they are selling the property it is likely to be more valuable and easier to sell vacant but under the new regs, they will still be able to use a Section 8 to get it empty and sold. Ditto bad payers and anti-social tenants. So this is unlikely to prevent many evictions. Add in the fact that more former rental homes are on the market – 18% of all available stock used to be rented versus 8% in 2010 – and we can deduce that many landlords are leaving the sector. My guess is that a high proportion are doing so to beat the legislation. That’s good news for buyers – because we will see more available homes. But it is very bad for renters who will struggle to find a home at all, and what is available is at near all-time high rent.”
“Increasing rents beyond market value looks set to be outlawed too. Whilst there were already rules around this – tenants had a right of arbitration – very few used it and faced with an increase decided to either pay it or leave. There will be issues around proving one way or another what is fair, especially in a market where seemingly, the sky’s the limit.”
“‘In-tenancy’ rent increases written into agreements could be banned. These were not standard in most cases and of course when used, at least gave some certainty to tenants as opposed to an unknown increase at an unknown date in the future. I do not see that the ban will affect many people due to the lack of common use.”
2 responses
I do not think that we will see an exodous of landlords as some might suggest. After all, there are a lot of good renters and good landlords out there and the relationship is working for both parties.
I am worried about future landlords. Despite some people’s opinion we do need private landlords. Some people cannot afford or do not want to buy and that section needs to be catered for. The more properties we have to rent, the better the competition, the more quality housing and the cheaper rent.
Landlord’s are also good for the property market. Landlords buy and sell and at the end of the day we need more buyers especially in this market at the moment. We have a lot of property up for sale and not enough buyers.
They must get rid of higher rate stamp duty for landlords. The cost to be a landlord is extremely prohibitive at the moment; stamp duty, agent fees, epc’s, upkeep, maintenance, checks and upgrading properties not to mention the losses incurred through bad tenants. What incentive is there for someone to invest in property to rent especially after the loss of the tax relief? If the government are going to regulate the industry further (which I am not against per se) it will cost money but they need to give something back to Landlords in return. I’m not convinced that the current suggestion is enough.
Andrew is spot on.
With regards to damp, this is a key issue. I have family in the damp surveying and damp proofing trade. The vast majority of times they are called to do a survey at the demands of the tenant, the reason for the damp is their own behavior.
Shut the windows to keep the heat in, turn the heating down, turn the extractor fans off in the bathrooms to save power, and then dry all the washing inside rather than a tumble drier = massive humidity, no ventilation and a cold internal wall which creates condensation on walls which allows the mold to grow on.
It will be interesting to see how they tackle this without burdening the landlord with unnecessary surveys that will just push rents even higher.
Education is needed here, not landlord-bashing.