Residential Update: Renters (Reform) Bill

Posted by Strettons on 19th June 2023 -

The long-awaited Renters (Reform) Bill finally had its first reading in Parliament on 17th May and its second reading on 5th June. 

This bill has the potential to change many aspects of the rental sector for both tenants and landlords and will attempt to make the private rental sector fairer and more stable. This is arguably the most significant set of reforms to the private rented sector since the Housing Act was passed in 1988. 

Here are the key Renters’ Reform Bill dates:

• April 2019: Initial consultations over the bill
• February 2022: Initial consultation white paper published by the government
• May 2022: Renters’ Reform Bill promised in the Queen’s Speech
• June 2022: A Fairer Private Rented Sector white paper published by the government
• May 2023: Renters’ Reform Bill to be debated and voted on this Spring

While it may seem focused on the benefits it will bring to tenants, it will also bring welcome changes for landlords. They will be able to quickly recover their properties from anti-social tenants and those in rental arrears, and more of the court process will be digitised to speed up proceedings.

What's included in the Renters (Reform) Bill?

Abolishing section 21 ‘no fault’ evictions

Section 21 Notices enable private landlords to repossess their properties from assured shorthold tenancy tenants without grounds for possession. While the Bill proposes the removal of Section 21 notices, importantly, it states that landlords will still be able to regain possession more easily under new Grounds under Section 8 Notice. 

New grounds for possession will be widened. Landlords will be able to seek possession on the following bases:

• The landlord or their wider family members (parents/grandparents/siblings/children/grandchildren/spouse or civil partner’s children or grandchildren, including half-blood relationships) need to use the property as their home. Currently, this ground only extends to the landlord and their spouse/civil partner. Possession can only be sought once six months of the tenancy has expired, and landlords cannot subsequently let or market the property for letting for a period of three months. If they do so, they may incur a financial penalty or criminal offence.
• The landlord intends to sell the property. There is currently no guidance on what would be sufficient to demonstrate an intention to sell. The landlord would need to give a minimum of two months’ notice.
• The landlord intends to employ a permanent agricultural worker who needs to live at the property.
• The landlord needs possession to comply with enforcement action.
• A new ground for repeated rent arrears has been added. If rent arrears of more than two months (where rent is payable monthly) or eight weeks (if rent is payable for a period shorter than a month) have been unpaid on at least three separate days in a period of three years, this will be sufficient to obtain possession.
• The notice period for standard rent arrears will be increased from 14 days to 4 weeks. Any unpaid amounts will be ignored if a tenant is entitled to universal credit. 
• The threshold for obtaining possession based on anti-social behaviour will (arguably) be lowered from behaviour which is “likely to cause” a nuisance or annoyance to behaviour which is “capable of causing” a nuisance or annoyance.
• The ability to gain possession on the basis that a property is a holiday let will be removed.

Introduction of periodic tenancies instead of fixed terms

Tenancies will be changed to a simpler structure, running on a ‘rolling’ basis until notice is served. Landlords will be able to increase rents, in line with the market price annually by serving a Section 13 notice.

Introduction of a new Ombudsman for private landlords and a Property Portal

Landlords may be required to join an impartial redress system for situations where tenant complaints cannot be resolved directly. A Property Portal is also being proposed to aid landlords in demonstrating compliance with property safety standards.

Allow tenants to request a pet

Tenants will have the right to request a pet in the property, which landlords can’t unreasonably refuse. Landlords will, however, be able to require that the tenant has pet insurance to cover any potential property damage.

Tenant’s Notice to Quit

Tenants can give their landlord two months’ notice to vacate, and it will not be possible to state the method by which tenants can provide written notice.

What happens next?

At present, the Bill is draft legislation. It must still go through several readings in the House of Commons and House of Lords, where the contents will be discussed and potentially amended before receiving royal assent and becoming law. This process is anticipated to take around a year, with the new legislation expected to come into force in early 2024. We also hope that any fundamental changes are permitted a period of implementation once the legislation is passed. However, there is no mention in the Bill about transitionary periods.

Read article on Strettons website 

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