The Renters’ Rights Bill will bring the biggest changes in over three decades, so it’s important to understand what the bill means to you, if you are a landlord or someone working in the estate market.
What Is the Renters’ Rights Bill?
The Renters’ Rights Bill was introduced by Labour MP Lloyd Russell-Moyle. The purpose of the bill is to eliminate the power imbalance between tenants and landlords, address affordability, provide better tenant financial security, and improve housing standards.
What is the latest update?
The bill has advanced its second reading in the House of Lords and is currently undergoing the Committee Stage as of 16th April, which is a crucial phase to becoming law. If the bill is passed, it will introduce obligations on landlords, tenancy lengths and regulatory compliance.
What is included in the Renters’ Rights Bill?
The bill will:
- Abolish Section 21 evictions: landlords will no longer be able to evict tenants with “no-fault” notices
- Abolish fixed-term assured shorthold tenancies (ASTs): tenancies will now become periodic
- Limit rent increases: Because all tenancies will be periodic, Section 13 notices will be the only way for landlords to raise rent, and this can only be served once yearly
- Deposit reform: Tenants will no longer need to raise a new deposit before receiving their old deposit from their previous home.
- Ban rental bidding wars: landlords and estate agents can no longer accept offers above the listed rent amount
- Introduce landlord ombudsman: This body will help resolve disputes between landlords and tenants impartially
- Create a private rented sector (PRS) database: this database is designed to compile information about landlords and properties and provide visibility on compliance
- Apply Decent Homes Standard: all rental properties must meet the minimum quality standards set
- Criminalise discrimination: landlords can no longer refuse tenants on benefits, with children or with pets
- Allow renting with pets: landlords can no longer unreasonably refuse tenants with pets, but can require them to take out insurance to cover damages to the property
How will this affect landlords & estate agents?
Here are the key proposals from the bill that will affect landlords and estate agents:
Abolition of Section 21 (‘No-Fault’ evictions)
One of the most drastic changes from the bill – landlords will no longer be able to evict tenants without providing a valid reason.
All evictions will have to follow Section 8 grounds, which include specific scenarios such as sale of property, landlord wishing to move into the property, serious tenant misconduct or breaches of contract.
Rent controls
There is a series of rent control measures under the new bill. Rent increases will now be limited to once per year and must be issued through a formal Section 13 notice.
This means landlords will not be allowed to accept offers above the listed rent amount or engage in a bidding war, and they can only request up to one month’s rent in advance. If tenants find rent hikes unreasonable, they will have the right to challenge unfair increases at a First-Tier Tribunal.
Shift to periodic tenancies
Under this bill, fixed-term Assured Shorthold Tenancies (ASTs) will no longer exist and will instead be replaced by periodic tenancies that continue indefinitely until lawfully ended by either party.
Tenants will now have the flexibility to leave with two months’ notice, whereas landlords must provide at least four months’ notice, with valid grounds for possession of the property. There will also be a 12-month protection period at the beginning of the tenancy in which landlords cannot serve a possession notice.
Lifetime deposits
Another significant change brought by the bill is a lifetime single deposit system. Tenants will no longer be required to raise new funds before receiving their previous deposit back.
Tenant protections
This Renters’ Rights Bill also brings changes aiming to reduce discrimination in the rental market. Landlords will no longer be able to refuse tenants based on the fact that they have children, pets or are receiving benefits.
Landlords will no longer be able to refuse pets in the property unless they have a valid reason. Landlords can, however, request that tenants take out pet insurance to cover potential property damage.
Decent Home Standard & Awaab’s Law
Awaab’s law will now be extended to private rentals. Under this law, landlords must address any serious health hazards, such as damp or mould. This must be communicated within a set timeframe, or else landlords could be penalised.
The Decent Homes Standard, currently covering social housing, will now also apply to private rentals. This means all properties must meet the minimum standards of safety, facilities and warmth.
Compulsory Ombudsman registration
Regardless of whether a landlord uses a professional estate agent or not, they will need to be registered with a new Ombudsman scheme, which will provide dispute resolution services for tenants outside of court.
The ombudsman will have the power to investigate disputes, order compensation, and require landlords to take corrective actions. Landlords who fail to register could face monetary penalties or be prohibited from letting properties.
Impact on tenants
This Renters’ Rights Bill brings significant improvements for tenants. The abolition of Section 21 means tenants will no longer be evicted without a valid reason, offering better stability and financial security. Tenants will also be given more flexibility in leaving the property, whereas landlords will have to give a longer notice before terminating the tenancy. Stricter property standards and the introduction of an independent ombudsman service will help hold landlords accountable for poor living conditions.
Impact on landlords
Under the new bill, landlords will face new responsibilities. Landlords will now have to provide valid grounds for eviction or termination of a tenancy. There will be limitations on rent increases and the amount of money that can be charged as a deposit (5-6 weeks’ rent). They will also need to comply with stricter property standards, standardised tenancy agreements, and can no longer engage in a rent bidding war. Failure to comply with new restrictions may result in fines or being banned from letting properties.
Impact on estate agents
With the changes from the new bill, estate agents will now have more responsibilities, including advising landlords on new procedures and requirements, and ensuring that properties let comply with the new standards, and can no longer accept rent higher than the amount advertised. It will now be crucial that this new information is communicated clearly to landlords and tenants to avoid penalties or complaints.
