Over the past two decades, the private rented sector has witnessed a significant surge, with the number of privately rented properties doubling since 2004 and peaking in 2016. Currently, more than 4 million properties are privately rented, setting the stage for the Renters Reform Bill.
However, this growth in the private rented sector has not been without its challenges. Section 21 evictions, also known as ‘no-fault evictions,’ have emerged as a significant issue, often disrupting the lives of tenants and their families, and even their work, when they occur.
This is where the Renters Reform Bill (passed in April 2024) could have a massive impact. The Bill proposes to eradicate Section 21 evictions, but this isn’t the only change heralded by the Act.
This is welcome news to tenants. However, such amendments are causing concern among landlords. In fact, 25% of landlords are reportedly “very pessimistic” about the proposed changes.
Landlords fear this legislation will make it significantly harder to regain possession of their properties, especially in cases where tenants are problematic but not necessarily in breach of their tenancy agreement.
At the time of writing, the Bill is being reviewed by the House of Lords for amendments. However, it’s expected to become law for all new tenancies on 1 October 2024.
Here, we explore the key changes proposed by the Renters Reform Bill and how they are being received by both landlords and tenants.
The abolition of Section 21 evictions
At present, under Section 21 regulations, landlords have the right to evict tenants without giving a reason. As a result, many tenants are reluctant to challenge housing issues and problems with their accommodation for fear of eviction.
With the proposed removal of Section 21 “no-fault” evictions, tenants can now feel reassured that they won’t face eviction when flagging up shoddy landlord practices, providing a sense of protection and security.
Under the new Act, landlords will have to rely on specific grounds for possession, such as the landlord’s intention to sell or redevelop the property or if the landlord or a close family member intends to live there. This change, while it may seem restrictive, is designed to encourage fairness and balance in the rental market, understanding the concerns of landlords.
The Renters Reform Bill also proposes ending fixed-term tenancies in favour of rolling tenancies. This will benefit tenants by providing greater security while maintaining the flexibility of renting in the private sector.
Tenants wishing to end their tenancy must give two months’ notice. In contrast, a landlord who wishes to end the tenancy will need to provide evidence of valid grounds for possession, as mentioned above.
That said, the ban on section 21 “no-fault” evictions was originally promised back in 2019 and has faced significant delays since then. Despite introducing the Renters Reform Bill, which includes the abolition of these evictions, the government has recently decided to delay the implementation of this ban until after court reforms are completed. However, there’s currently no clear timeline for these court reforms, leading to further uncertainty and frustration among renters and housing advocates.
In summary, tenants will likely welcome the abolition of Section 21 evictions, while landlords might be more reticent. However, introducing new grounds for possession should somewhat mitigate landlords’ fears. In addition, only around 6% of evictions occur under Section 21 at this moment, so, in theory, the impact should be manageable.
The introduction of more comprehensive grounds for possession
Under the new Act’s framework, landlords will find it easier to recover their property on the grounds of anti-social behaviour or persistent rent arrears.
For example, if rent arrears are at least two months, landlords need only give four weeks’ notice of eviction.
Alternatively, if the landlord wishes to sell the property, the landlord needs to give two months notice.
Or, in the event of severe anti-social behaviour or criminal activity, landlords can make an immediate claim for repossession.
Protection against backdoor evictions
Tenants will also have the right to appeal against rents excessively above the market rate, which can often lead to backdoor evictions.
That said, landlords still have the right to increase rents by the market rate. An independent tribunal will be appointed to review this.
Private rented sector landlord ombudsman to be introduced
All landlords will be obliged to register with the new Ombudsman to benefit from impartial and binding resolutions quicker and cheaper than going through the courts. Failure to comply could result in local council enforcement action.
Under the new Ombudsman, tenants can challenge landlords without needing to go to court, meaning they have the right to seek redress where landlords fail to deal with legitimate complaints about their tenancy.
The Ombudsman will be able to compel landlords to take remedial action and to pay compensation of up to £25,000.
However, the Ombudsman doesn’t just aid tenants. Landlords also benefit from access to an impartial decision-making body that offers support and training to help landlords improve their services.
The creation of a new Property Portal
The Renters Reform Act also proposes the creation of a new Property Portal.
This portal aims to increase transparency and improve the enforcement of rental regulations.
All landlords will be required to register themselves and their properties with the Property Portal. One of the portal’s functions is as an educational tool, offering landlords guidance on their responsibilities and helping them comply with regulations.
Likewise, tenants will welcome the new Property Portal as it will provide greater transparency. Tenants will be able to access information about their landlords, including compliance with key legislative requirements. The portal will also include details on any banning orders or serious offences related to the property or landlord, effectively making it a “rogue landlord” database.
Tenants will have the right to request a pet
Landlords will have to consider tenants’ requests to keep pets in their property.
Landlords will be unable to unreasonably refuse requests. However, they will be able to require tenants to purchase insurance to cover any damage the animals may cause to the home.
That said, landlords will still have the right to refuse tenants to keep pets if their superior landlord prohibits them.
If tenants feel a landlord has unreasonably refused a request to keep a pet in their home, they can escalate the matter to the Ombudsman for a final decision.
The Decent Homes Standard is to be applied to private rented homes
Landlords will be obliged to conform to the Decent Homes Standard for any property they rent out.
This will raise the quality of privately rented homes on the market, giving tenants peace of mind.
The government aims to reduce the number of non-decent rented homes by 50% by 2030, and these new standards will support this initiative.
Ban landlords and agents from refusing to consider tenants with children or those in receipt of benefits
This measure will make it illegal for landlords and their agents to discriminate against tenants with children or those receiving benefits.
Everyone has the right to live in a decent home, so the discriminatory practice of blanket banning specific tenancy sectors should cease.
The new Renters Reform Bill addresses both overt discrimination, such as “No DSS” signs, and more indirect discrimination, for example, not responding to inquiries from potential tenants who mention they are on benefits.
Landlords will only be able to reject tenants who fail affordability checks and not based on whether they are on benefits or have children.
Enforcement and investigatory measures
New investigatory powers will be introduced to empower local authorities to combat criminal landlords by levying penalties against landlords who flout the new rules. Civil penalties up to £30,000 can be demanded, while criminal prosecution is another alternative.
Summary
As can be seen, the Renters Reform Bill will introduce comprehensive changes to the private rented sector.
It’s to be hoped that the introduction of the Ombudsman and Property Portal will help ensure tenant problems are sorted with minimum delay. While the application of the Decent Homes Standard should raise the quality of rented accommodation.
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