Sweeping changes proposed by the Renters’ Reform Bill
Legal Development 26 October 2022 26 October 2022
UK & Europe
UK Real Estate Insights
The Government claims that the Renters’ Reform Bill will introduce “a generational shift that will redress the balance between 4.4 million private rented tenants and landlords”. We summarise the proposed changes that both private and public sector landlords should be aware of.
The Renters Reform Bill will, according to an announcement from the Department of Levelling Up, Housing and Communities, be introduced in this session of Parliament, ending in May 2023.
The Bill seeks to change the landscape for rental tenants and landlords. Landlords may already feel the law is weighted in favour of tenants and some proposals in the Bill may add to this feeling. However, there may also be elements of the Bill which are useful to landlords.
The key changes proposed are summarised as follows:
1. Removal of Section 21 evictions
A key pillar of the Conservative Government manifesto, the Bill will abolish “no fault” evictions under section 21 of the Housing Act 1988.
Landlords will only be able to evict on fault-based grounds and “reasonable circumstances” (which will be defined in the Act).
At the time of writing, the Government remain committed to this proposal but there has been reports the Government may scrap this ban. Much will depend on further readings of the Bill and possible changes in Government over the coming months.
2. Section 8 notice of intention to issue possession proceedings
The Bill introduces:
a) A new mandatory ground for repeated serious arrears. Where the tenant has been in at least 2 months’ rent arrears 3 times within the previous 3 years, the Court must make an eviction order. This will apply regardless of the arrears balance at the time of the hearing.
b) A ground for landlords wishing to sell or move themselves (or their close family) into their rental property.
c) Specific grounds for supported and temporary accommodation.
3. Reformed Court process
“Wide ranging reforms” are promised targeting areas that frustrate and hold up possession proceedings. Where the required financial and physical resource necessary to achieve this will come from is not specified in the Bill.
There will not be a new housing court introduced.
There is a wish to strengthen mediation services for landlords and renters to prevent avoidable evictions.
4. Fixed term tenancies scrapped
All new and existing tenancies are to move to periodic tenancies to allow tenants to leave when they want to leave, provided they give 2 months’ notice.
There may also be a requirement that all tenancies are in writing.
5. Rent increases
Landlords will only be permitted to increase rents once per year and must give a minimum notice of 2 months.
The Bill seeks to end use of rent reviews or automatic rental increases which are vague and unconnected to the market.
Tenants will be given the confidence to challenge unjustified increases through the First Tier Tribunal. How this confidence is to be given remains unclear, however.
6. Decent Homes Standard (DHS)
The DHS currently only applies to the social housing sector but will be extended to the private sector. It requires homes to be free from serious health and safety hazards and kept in a good state of repair by landlords.
7. Extended Ombudsman powers
A new Private Renters’ Ombudsman will be introduced whose powers and decisions will be binding on all landlords. Membership will be mandatory.
The Ombudsman will have powers to compel landlords to “put things right”, either by way of apologies, remedial action or payment of compensation up to £25,000.
8. New Enforcement Measures
- Civil Penalty Notices to be issued by local authorities to those who illegally evict or harass tenants;
- Rent Repayment Orders for breach of the DHS
- Tenant compensation through the Courts for breaches of the new regulations;
- Restrictions on a landlord marketing or reletting for three months following use of “moving” / “selling” grounds
- Mandatory entries on to the ‘Rogue Landlord Database’
9. Other changes
- A new property portal will be introduced to assist landlords understand and demonstrate compliance with their legal requirements.
- Pets will be permitted in rented accommodation, subject to the landlord requiring pet insurance covering damage to the property.
- Landlords will be encouraged to allow reasonable requests to hang pictures or change appliances.
- Purpose-built student accommodation is likely to be exempt from many of the changes. Other student properties will be included.
If you are a landlord or a tenant affected by these changes and require advice, get in touch with our experienced Property Litigation team.