Here’s what the government’s new Renters’ Reform Bill means for tenants and landlords
Whether you’re a landlord or a tenant, the government’s proposed Renter’s Reform Bill will likely have a big impact on how you live and work. The long-awaited changes - first proposed back in 2019 - have still not been finalised, but the government has given us some clear insights into what we can expect from the bill.
The government recently outlined proposals for what they describe as “the biggest shake-up of the private rented sector in 30 years”. Here are 6 ways the reforms could impact you as a renter or landlord - and what you need to know.
Tenancies will become periodic
The UK lettings market currently combines fixed term tenancies with periodic tenancies. At the moment, most renters and landlords commit to a fixed rental term of 6 or 12 months. After this fixed term, tenants and landlords have the option to either:
- choose not to renew the contract (the tenant leaves)
- renew the contract for another fixed term (the tenant stays for another 6 or 12 months)
- let the tenancy move onto a periodic tenancy, also known as a ‘rolling contract’ (the tenant stays indefinitely but can leave after giving 1 month’s notice)
But under the proposals in the Reform Bill, this combined system will be replaced by a single system of periodic tenancies.
This means renters will no longer have to commit to a fixed rental term by default, resulting in more flexibility for individuals to adapt to a change of circumstances, like moving to a new job in a new location or moving in with a partner.
However, the notice period for leaving a tenancy will become extended to 2 months, rather than the current 1 months’ notice period, giving landlords more time to get organised.
No fault evictions are out
If it goes through, the Renters’ Reform Bill will see the end of controversial section 21 eviction notices, also known as ‘no fault’ evictions.
Until now, landlords could evict tenants with 2 months’ notice after the fixed term had ended, without having to provide grounds for doing so. Section 21 notices have been blamed for discouraging tenants from challenging landlords, for instance in the case of urgent repairs on the property.
Under the new rules, landlords will only be able to evict tenants on fault-based grounds and under reasonable circumstances, such as needing to sell the property. The new periodic tenancy system also means tenants and landlords will have to provide 2 months’ notice before an eviction and they will not be able to agree to notice periods longer than 2 months.
Abolishing Section 21 will provide tenants with more security, giving renters the ability to communicate more confidently with their landlords, without fear of eviction.
Section 8 evictions will be strengthened
While section 21 evictions are being ditched, the grounds for serving a section 8 eviction notice will be strengthened. With the new government reforms, landlords will now be able to serve a section 8 notice after the first 6 months of a tenancy agreement and with 2 months’ notice if:
- They choose to sell their property
- They choose to move themselves or close family member(s) into the property
The bill also hopes to strengthen landlords’ ability to evict tenants based on repeated, serious arrears. As it stands, tenants can simply pay the minimum amount needed to push arrears below the legal threshold for a court appearance, leaving landlords powerless.
Under the reforms, eviction will be enforceable if a tenant has been in two months’ rent arrears at least three times over a three year period. At the same time, notice periods for eviction on these grounds will increase to four weeks.
These changes protect both landlords and responsible renters - preventing tenants from being evicted on the grounds of one or two temporary lapses, while giving landlords more grounds to evict repeat offenders.
The bill also seeks to protect landlords from anti-social tenants - landlords’ ability to evict tenants based on criminal or serious anti-social behaviour will be enhanced, reducing the notice period down to just two weeks and granting landlords the ability to make a claim in court immediately.
Court proceedings will be improved
There are more changes coming to court proceedings. Until now, the lengthy timelines and complexity of the court system has long been a bugbear for landlords - and for tenants, the court process can often be intimidating.
With this in mind, the new reforms will address court proceedings and attempt to make them easier and more efficient for both landlords and tenants.
Improvements in the court system will include:
- Proposed enforcement measures to combat misuse of section 8 notices - e.g. preventing a landlord from reletting a property for three months after using moving and selling grounds to evict a tenant - and/or breaches of the new periodic tenancy system.
- Creation of a new Private Renters’ Ombudsman to free up time in the courts - helping tenants and landlords resolve issues without the need for court escalation
- Digitisation of court and tribunal processes
- Better access to legal advice for renters earlier in the dispute or possession process
- Mediation services for landlords to help resolve disputes earlier in the process
- Prioritisation of urgent cases, such as cases of antisocial behaviour or crime
The aim of these reforms is to make court proceedings surrounding rental properties easier to navigate and more effective, while prioritising the most serious cases.
New minimum standards set for private rentals
Good news for tenants - under the new proposals, there will be increased pressure placed on landlords to make sure their properties are free from serious health and safety hazards and in good repair. The government plans to target the lowest performing regions of the country first in an attempt to improve the quality of rental housing, setting new minimum standards for all private rental properties.
Local councils will be given more tools to enforce these new housing standards, motivating landlords to proactively manage and maintain their properties. Some of the requirements will include making sure all rental properties are clean, usable and dry for tenants. Kitchens and bathrooms will also be required to be in good condition, with adequate noise insulation, for instance.
While the introduction of the Decent Homes Standard in the private sector could cause some headaches for landlords, it aims to ensure that all tenants are able to live in safe, decent homes.
There will be a new Private Renters’ Ombudsman
The Renters’ Reform Bill could see the creation of a new Private Renter’s Ombudsman that will allow tenants and landlords to resolve disputes more easily and avoid going to court over minor issues.
Landlords letting via an estate agent will be required to join the scheme, meaning they will be more directly accountable to their tenants.
If tenants have a complaint about their landlord, they will be able to seek redress for free.
This could be relating to:
- Behaviour of the landlord
- Conditions of the property
- Repairs that have not been completed within a reasonable timeframe
If a tenant’s complaint is found to be justified, the ombudsman will then have power to compel landlords to issue an apology, provide information, take remedial action or compensate the tenants for up to £25,000. Non-compliance with these instructions could result in the landlord being banned from the lettings market.
In issuing these changes, the government hopes to hold landlords more accountable and tackle the root cause of problems affecting tenants in the UK.
All landlords will join a property portal
With the new bill, landlords will be required to register their properties on a new digital property portal. This move is designed to help landlords understand their legal obligations and give tenants more information about their landlords’ compliance with these requirements.
If the property portal is introduced, local councils will also have more access to data about the landlord, helping them to clamp down on criminal or otherwise non-compliant behaviour and improve standards across the industry.
Tenant rights are top priority
To help more tenants cope in challenging economic times, the government has moved to protect the financial security of tenants with a number of reforms outlined in the new bill.
- Doubling the notice period for rent increases to two months and allowing rent increases only once a year
- Strengthening tenant rights for rent repayments, allowing tenants to reclaim rent if their tenancy ends earlier than the period they’ve paid for or in cases where a property is unsuitable or unsafe
- More rights to keep pets in properties, while also permitting landlords to require pet insurance to protect properties from damage caused by pets
- Preventing landlords and letting agents from banning families with children or people on benefits from renting
These changes should significantly improve the rental experience for tenants - while clamping down on criminal landlords and rewarding responsible landlords upholding best practices.
Are you ready for the new reforms?
The aim of the government’s new bill is to make renting easier and safer for both landlords and tenants - and they could spell big changes to the private rental sector.
These sweeping reforms will strengthen the rights and autonomy of tenants, enabling them to have more control over the terms of their rental agreements and more power to dispute issues with landlords, while eliminating the fear of no fault evictions.
Simultaneously, responsible landlords who keep their properties in good condition will appreciate the introduction of clearer eviction rights, more streamlined court process and the Private Renters’ Ombudsman, which will make it easier to resolve disputes and address problems around late rent payments and antisocial behaviour.
Whether you’re a tenant or a landlord, it’s important to know how these changes could affect you when they come into effect in 2023.