2nd January 2024

The Renters (Reform) Bill Controversy: Should Landlords be Concerned?

What the Government has called a “once-in-a-generation” transformation of housing laws, The Renters (Reform) Bill is intended to usher in a more equitable letting system for both tenants and landlords. Since its introduction to Parliament in May 2023, the legislative overhaul has attracted significant media and industry attention, causing considerable concern among landlords.

According to a 2023 letting industry report, 25% of landlords feel “very” pessimistic and 29% feel “somewhat pessimistic” about what the new legislation will entail. While a survey by PayProp UK revealed that only 4.4% of letting agents feel positive about the changes.

 

What are the key provisions of the Renters (Reform) Bill?

  • Abolition of Section 21: The most significant and controversial change entails the abolition of Section 21, rendering “no-fault” evictions obsolete. Evictions will now require valid reasons provided through a notice under Section 8 of the Housing Act 1988.
  • End of Fixed Term Tenancies: Fixed-term tenancies will be replaced by periodic agreements from the commencement of the lease. Tenants gain the freedom to provide two months notice under the new periodic tenancy rules.
  • Grounds for Possession: Landlords will witness a transformation in the grounds for possession, including the ability to reclaim their property for personal use, address rent arrears, sell the property, and deal with anti-social tenants. Many grounds will become mandatory, offering landlords enhanced certainty in court proceedings.
  • Pet Permissions: The Bill ensures tenants’ right to keep pets with landlord consent, which cannot be unreasonably denied. Landlords can stipulate that tenants obtain pet insurance.
  • Landlord Portal and Ombudsman: A proposed Private Renter’s Ombudsman and a new property portal aim to streamline dispute resolution outside the courtroom and provide transparent information to tenants about property standards.
  • Rent Reviews and Notice Periods: Rent increases will be restricted to once per year, and landlords must provide a two-month notice period for any proposed rent hike. The changes aim to empower tenants against sudden and substantial rent increases.

 

Should landlords be concerned about the impact of The Renters (Reform) Bill?

While The Renters (Reform) Bill introduces substantial changes to the rental landscape, current legislation is hardly advantageous for landlords pursuing a repossession claim. The process can be lengthy, the courts are often sympathetic towards the tenants, and the bloated costs are disproportionately borne by the landlord.

If The Renters (Reform) Bill succeeds in streamlining the legal process, increasing the court system’s capacity for possession claims, and professionalising the rental sector by expelling rogue landlords, transparency, balance, and efficiency may finally be restored to this cumbersome and unpredictable area of law.

Of course, it is important to keep in mind that the Bill still has to progress through further stages in Parliament. At the Report Stage, predicted to take place in early 2024, MPs will propose, debate and vote on new clauses and amendments. We will continue to review the changes as the Bill passes through Parliament.

 

For landlords, seeking further insights or assistance navigating these changes, or for advice on a repossession claim, our litigation team is readily available for consultation. For more information, email info@bussmurton.co.uk or call on 01892 510 222.

Richard McCulloch

Richard McCulloch
Paralegal