Renters Reform Bill: What, When and Why?
Fri 20 Oct 2023
It will be many months before there is any clear resolution on the various proposed amendments...the best suggestion is to keep calm and carry on."
Lesley Levy, Residential Lettings Manager, Norwich
Over four years after first being proposed, the Renters Reform Bill is back in the spotlight - so exactly what is it, what could it mean for the industry and when?
Introduced in Parliament on 17th May, 2023, the Renters Reform bill was originally fulfilling the 2019 Conservative manifesto commitment to abolish ‘no fault’ evictions in England - whereby landlords can evict tenants without reason.
However, the Government has now moved to mitigate this.
Responding to a report from the House of Commons Select Committee, it has now pledged the abolition of Section 21 will be ‘aligned’ with reforms to the legal system.
Currently it can take six months for courts to process possession claims.
The Government’s plans for reform were originally established in the June 2022 White Paper; A Fairer Private Rented Sector after various consultations but has been slow in making progress.
The Bill's main aim was to abolish the current Assured Shorthold Tenancies including the Section 21 'no fault' evictions - which means landlords can evict tenants without reason.
It is proposed these tenancies will be replaced with PRS (Private Rented Sector) monthly tenancies with no end date.
Now the Government has stated: “Abolishing Section 21 will increase security for tenants as landlords will always need a good reason to evict.
“However, we believe that increased security for tenants must be balanced with a landlord’s need for flexibility when they want to sell or move into a property themselves and we are committed to introducing these changes once reforms to the court system are in place.”
Other measures included in the Bill are to give landlords greater powers to repossess properties, a new process will be established for implementing annual rent increases and tenants will no longer need permission to keep a pet.
Lesley Levy, Residential Lettings Manager, based in our Norwich office, said: "It will be many months before there is any clear resolution on the various proposed amendments etc, which will then have to go to the House of Lords.
"At this stage, no one has any idea of exactly which proposed reforms will reach final legislation, nor when.
"As we have seen from the Government’s recent pull back on its original proposals to require higher EPC ratings in properties by 2025, proposals are subject to change.
"I am keeping a close eye on everything to do with it as I am a member of the Professional Standards Committee. In the meantime, we advise our clients that at this stage no one knows what the end Bill will contain but the shortage of rental properties in this country still makes investing in the lettings market an attractive proposition.
"We can also advise our clients that there will be plenty of notice before the Reform Bill becomes law and if there is anything in the Act that causes them concern, they will still have an opportunity to gain possession of their property, should they wish to do so, before the law changes.
"So, at this time the actual facts are unknown and the best suggestion is to just keep calm and carry on."
Tasca Kruse, Residential Lettings Manager, in our Retford office, said: "The proposed abolition of the Section 21 notice has made a lot of landlords nervous.
"Landlords should be assured that the removal of this notice (now subject to court reform) would not mean they weren’t able to serve notice on their tenants anyway as they would still be able to serve Section 8 notices which are being reviewed to be able to be served for reasons such as wanting to sell a property, wanting to move back into the property or move a close relative into the property etc.
"The Section 8 notice on rent arrears is being re-examined to allow the landlord more opportunity to serve notice if a tenant is in constant arrears. These details could change but I think reassurance to landlords and prospective landlords is key.
"What they can or cannot do won’t be changing drastically."
FAQs; Frequently Asked Questions:
What is the Renters Reform Bill?
This Bill includes the following proposals:
- It would abolish Assured Shorthold Tenancies and with them, Section 21 ‘no fault’ evictions. Instead, PRS tenancies will be monthly, Periodic Assured Tenancies with no end date. This is now being aligned with court reform meaning it looks likely not to be implemented immediately.
- The grounds on which landlords can seek to repossess properties would be amended and strengthened. The aim is to make it easier for landlords to repossess properties where tenants exhibit anti-social behaviour or repeatedly build up rent arrears.
- A process would be introduced for implementing annual rent increases. First-Tier Tribunals would determine market rents if a tenant appeals against a landlord’s proposed increase.
- A new independent Ombudsman would be established for the PRS.
- A new PRS Property Portal would be established so tenants, landlords and local councils can access the information. One aim of the portal is to help local authorities target enforcement activity where it is most needed.
- Landlords would be required to consider tenants’ requests to keep a pet. They would not be able to refuse such a request unreasonably.
- Landlords would be able to require pet insurance to cover related property damage.
Why was the Renters Reform Bill brought in?
Assured Shorthold Tenancies (ASTs) were introduced by the Housing Act 1988 and became the default tenancy in the PRS in England and Wales from 28th February, 1997.
However, ASTs offer no long-term security of tenure. Section 21 of the 1988 Act enables private landlords to repossess their properties without having to establish fault on the part of the tenant. It is referred to as the ‘no-fault’ ground for eviction.
The Bill aims to correct the feeling of a lack of security for tenants, who feel unable to enforce their rights in relation to repairs and to challenge unreasonable rent increases.
Local housing authorities argue 'no fault' evictions increase the likelihood of homelessness. Landlord bodies dispute this.
Michael Gove, Secretary of State for Levelling Up, Housing and Communities, made a series of recommendations earlier this year and recently confirmed the Bill would receive its Second Reading.
Now, the Bill has received its Second Reading in the House of Commons, it proceeds to the next stage.
If you have a property to let or a tenant looking to rent and are concerned about the implications of the Renters Reform Bill, or need some general advice, please contact Lesley Levy in our Norwich office on 01603 629871 or Tasca Kruse in our Retford office on 01777 712945.
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