Renters’ Rights Bill – What landlords need to know

What is the Renters’ Rights Bill?

The Renters’ Rights Bill (“the Bill”) is new legislation currently passing through parliament which will completely transform how residential tenancies are managed and terminated. It will give significant additional rights to tenants in the private rented sector.

The Bill will not apply to tenancies which are not Assured Tenancies.

When is it coming into force?

The Bill is expected to come into force as early as spring 2025.

At the time of writing, the Bill was at the Committee Stage in the House of Lords. Implementation is a case of “when” and not “if” and the Bill is not expected to undergo any major changes before receiving Royal Assent.

What are some of the key changes?

• Assured Shorthold Tenancies (“ASTs”) will cease to exist and any in existence will automatically become Assured Tenancies
• Fixed-term tenancies will cease to exist. Assured Tenancies will be periodic in nature
• No-fault evictions will be abolished. If a landlord wants to terminate an Assured Tenancy, it will have to rely on grounds justifying why it should be entitled to possession. These expand and amend the existing section 8 grounds, many of which now have significantly increased notice periods
• Landlord will need to join the newly created Private Rented Sector Database
• It is intended to introduce a new Private Rental Sector Ombudsman to deal with tenant complaints
• The Decent Homes Standard is being extended from social housing to the entirety of the Private Rented Sector. Stricter requirements on landlords to deal with health hazards, such as damp and mould, are also being introduced
• Tenants can ask to keep pets, which cannot be unreasonably refused. The right will be implied into every tenancy and landlords will be under a time limit to respond
• Landlords cannot outright refuse to rent to families or those in receipt of Universal Credit.

Does the Bill impact how much rent I can charge?

• ‘Bidding wars’ will no longer be allowed. In their advertisements, landlords and agents will be required to publish an asking rent for their property and will be prohibited form asking for, or encouraging or accepting any bids above this price
• Rent will be limited to that of the market rent and can only be increased once a year, which must be in line with the open market rent
• To increase the rent, notice needs to be served or determined by the First-tier Tribunal. Rent review clauses in tenancies can no longer be relied on
• The amount of rent landlords can ask for in advance is limited to one month’s rent which cannot be paid until the tenancy is signed
• The Bill increases the likelihood that tenants will challenge proposed increases in rent as they will no longer risk eviction through the no-fault route if they refuse to sign a rental agreement.

Can landlords be penalised for not following the rules?

Yes – in addition to not being entitled to possession if certain requirements are not met, landlords and agents can also be fined up to £40,000 for non-compliance. However, the effectiveness of enforcement for non-compliance is likely to be directly impacted by how well-funded the enforcement bodies are, the resources available to the local authorities and the efficiency of the Ombudsman scheme.

What are the key points to consider?

1. Many of these changes will be immediate with no lead-in time for landlords to prepare once the Bill is passed
2. Landlords are encouraged to prepare now, particularly if they are considering terminating a tenancy
3. Compliance with some key aspects of the Bill is a pre-requisite for being able to serve a valid notice to terminate a tenancy under most of the section 8 grounds. As such landlords are urged to get ahead of the curve so they are in a position to serve notice when needed.