What Is the Renters Reform Bill and How Will It Impact Landlords and Tenants?

The Renters Reform Bill has now been formally presented to parliament for review. This bill, which heard its first reading on the 17^th of June 2023 is designed, according to HM UK government to be a ‘once in a generation’ overhaul of housing laws. The outcome of a manifesto pledge back in 2019, the Renters Reform Bill, aims to deliver ‘safer, fairer and higher quality homes’ across the UK whilst also protecting over 2 million UK landlords. The bill which has had much speculation will have an impact on the wider rental sector. But what does it really mean and what do both tenants and landlords need to know?

Centrick’s Andy Butts, Group Sales and Lettings Director explains these new laws for landlords and tenants:

               “The UK has been moving more towards a mainland European rental model for many years, so it is no surprise that the Renters Reform Bill has been widely anticipated by Landlords and Tenants alike. As a regulated agent the team at Centrick have always ensured our landlords are fully compliant with ever changing legislation and work tirelessly to ensure that all of our tenants feel safe, secure and protected in their homes.

Many landlords have expressed concerns about the headline changes outlined in the Renters Reform Bill and while the final details have yet to be seen and may not be debated for some time the initial proposals do present short and long term benefits for both good, compliant and genuine landlords and tenants. Proposed greater rental security for tenants and clear, actionable redress for landlords with easier pathways and stronger grounds to evict tenants that do not abide by the rules of their agreed tenancy.

We also anticipate that the Renters Reform Bill will boost relationships between landlords and tenants, enhancing trust and creating longer, happier tenancies.”

What Is The Renters Reform Bill?

The Renters Reform Bill is a piece of proposed legislation put forward by the UK Department for Levelling Up, Housing and Communities. This prospective legislation aims to bring into law the following regulations, all of which are aimed at creating a fairer landscape for both landlords and tenants…

• The abolition of Section 21, no fault evictions
• Movement of all tenancies to periodic
• Stronger grounds for repossession for unruly tenants
• Introduction of an Ombudsman for the private rental sector
• New tenant and landlord portal for information on their obligations
• Stronger rights for pet owners to request they keep a pet in a property

How Does The Renters Reform Bill Impact No Fault Evictions and Section 21?

Section 21, referred to as “No Fault Evictions” is  the element of the bill that is most widely debated. Indeed the bill, if passed, does effectively abolish no fault evictions. Most, if not all well managed, regulated landlords will not have cause to use section 21. However, Shelter record that 230,000 tenants were evicted by landlords citing their Section 21 rights. Whilst the bill does propose to remove this ground for termination, it also looks to strengthen grounds for possession with additional reforms planned where landlords intend to sell or for cases of repeat rent arrears.

One of the key reforms proposed is a move from fixed to periodic tenancies, effectively meaning that all tenancies will become period. Should the bill be passed then, a tenancy will only be concluded should a tenant end it or if a landlord has adequate grounds to repossess their unit. Landlords will need to be aware of this proposed change as it has the potential to lessen tenant security. Tenants similarly may welcome this news as positive in terms of rental freedoms. Details have yet to be announced or debated but Centrick as part of Safeagent, Propertymark and ARMA will support all of our landlords and tenants to ensure compliance with any new regulation.

While the headlines focus on the proposed abolition of Section 21, responsible landlords will be assured with the addition of substantial reasons to evict tenants on reasonable grounds and will actually be bolstered by the revision of Section 8. Housing Minister, Michael Gove, echoed this sentiment by stating that fair and reasonable landlords will not be negatively impacted by these changes, explaining that “our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants”.

What Are The Changes To Section 8?

Section 8 of the Renters Reform Bill is set to be strengthened, providing landlords with more powers to evict tenants that have explicitly contradicted the terms of their tenancy. This can include damage to the property, antisocial behaviour, and refusal to pay rent. Landlords will therefore have the ability to repossess their properties with greater speed, if necessary, by making notice periods in these instances shorter. This protects landlords from tenants that seek to disregard the rules of their tenancies. This should provide landlords with greater peace of mind, especially after the proposed abolition of Section 21.

It is worth noting that NRLA raise some concerns not around the proposed reform but around potential legal enforcement saying that “The Government needs to ensure that responsible landlords have confidence that they can swiftly and effectively repossess properties where there are legitimate grounds.”

All of this will mean that referencing will undoubtedly become increasingly important for landlords. At Centrick we have always and will continue to provide best in class referencing for all parties.

Has The Renters Reform Bill Been Passed?

On Wednesday 17^th May the Renters Reform Bill was introduced to parliament for consideration, and the details were published in full, which you can read here. However, the first reading of the bill does not inscribe it in law just yet – parliament will have time to review the document before debating its contents at the second reading, which no dates have been announced for yet. These parliamentary discussions are due to commence in the near future and will allow members of parliament to dispute aspects of the bill and further query it. As such, the Renters Reform Bill we currently have access to is not the finished article and is subject to change before it is passed by parliament and becomes legally binding.

On 23rd October, the bill had its second reading in parliament. This suggests that the date by which the contents of the bill are enshrined in law could be as late as Autumn or Winter 2024. Since the first hearing, the government have also experienced some backlash from landlords regarding their proposed abolition of Section 21, although the government still seem dedicated to reforming the ‘no fault evictions’ laws. The parliamentary debate focused on the role of the justice system and suggested that the courts must be made ‘fit for purpose’ before action to abolish Section 21 is taken.

How Will The Renters Reform Bill Impact Tenants With Pets, Children and Social Funding?

Blanket bans on tenants could be removed as part of the Renters Reform Bill. Whilst it may spell good news for pet owners this may also spark concern with landlords. However, the detail is not in the headline.

Under the Renters Reform Bill pets, children, or tenants that claim benefits cannot be outright denied to rent the property in question. This aspect of the bill aims to reduce discrimination across the rental sector. Landlords are encouraged to explore a tenant’s credentials prior to making a decision on whether to rent to them. As a leading property agent Centrick will ensure landlords and tenants are compliant with any regulation.

A Digital Property Portal?

Given the rise of selective licensing, landlords will not be surprised to see the proposed Digital Property Portal. It is widely anticipated that the Digital Property Portal will become a central hub for compliance. Landlords may be required to list and manage properties within the portal and demonstrate compliance with any and all legislation. The goal of this proposed portal is to increase transparency for landlords and adherence with the Decent Homes Standard. It remains to be seen of the “what and how” this will materialise.

What Is The Decent Homes Standard?

At the time of writing, the Decent Homes Standard is only applicable to social housing. However, it is set to become standard across the private rental sector. The Decent Homes Standard states that properties must be free of any hazards, include useable facilities, and be appropriately clean. This comes as the government has vouched to halve the number of non-compliant rental homes across the country by 2030 as part of their broader Levelling Up scheme.

Although the vast majority of landlords provide safe, warm accommodation for their tenants, the Decent Homes Standard seeks to root out rogue landlords who fall short of these obligations. At the time of writing, 21% of PRS units are deemed unsuitable by these standards. A further 12% present a serious threat or hazard – these are the units that the government is intent on improving. Additionally, the government wish to expand upon Rent Repayment Orders to reimburse tenants with any rental payments they have made whilst living in housing that is deemed to be below the aforementioned standards.

Will A New Ombudsman Be Introduced?

The government have proposed that a new, more comprehensive ombudsman covering all private landlords be created. Membership to this ombudsman shall be obligatory for all landlords regardless of whether they utilise a letting agent. This is yet another way that the government is trying to hold landlords accountable.

The Renters Reform Bill may take some time to pass into law. Even then, changes may be further still from implementation. Nonetheless, it is vital that landlords and tenants across the UK are up to date with the proposed changes. For more information on what changes you will experience once the Renters Reform Bill is passed, and further guidance on how to prepare for these changes, fill out the form below to contact a member of the Centrick team. Have an opinion on the bill you’d like to share? Fill out Propertymark’s latest survey on the Renters Reform Bill to have you say.