Guidance for Landlords Preparing for the Renters Reform Bill
14.07.2022
The Renters Reform Bill has garnered a lot of press attention and raised concerns for landlords unsure where this newest piece of legislation might take the property rental market.
However, it is vital to appreciate that the bill isn’t necessarily harmful, nor should it be perceived as a negative for responsible landlords. Most headlines have focused on Section 21 evictions, but the reform does not mean landlords won’t have any viable options to vacate a tenancy should they need to.
Let us clarify some of the details around the Renters Reform Bill to help you stay up to date and prepare for potential future changes.
What Is the Renters Reform Bill?
Our first point to clarify is that the Renters Reform Bill is neither law nor finalised. Instead, the bill is a starting point for updating property market regulations and forms proposals for debate and discussion.
Several broad-scope ideas within the paper aim to reward professional landlords but eliminate poor rental standards. It’s worth reiterating that private rental homes are in enormous demand and are crucial to help shore up the gaps in quality housing supply.
The ongoing amendments will likely incorporate clauses to protect landlords and incentivise further investment.
Why Has the Renters Reform Bill Been Drafted?
The background to the Bill is the White Paper called ‘A Fairer Private Rented Sector’. As part of the governmental ‘Levelling Up’ agenda, this aims to improve housing quality.
Although some of the changes are fairly significant, the underlying objective is to promote higher standards.
Among the proposals which support tenancy rights, the bill suggests a property portal designed as a support mechanism for the 2.3 million landlords in the UK, offering greater clarity and assistance where required.
The Key Proposals
Let’s talk about evictions as one of the central themes that has attracted so much attention.
Section 21 allows so-called ‘no fault’ evictions – a landlord can evict a tenant without explaining why, even if there are no issues within the tenancy.
Withdrawing Section 21 is contentious because although it means that landlords can’t evict tenants without cause, it also poses an issue for landlords who may wish to reclaim a rented property for many reasons unrelated to the tenant. The reality is that the government isn’t just removing Section 21, but is also introducing new grounds for a Section 8 possession, reportedly to balance the protection of landlord rights against tenant security.
Anecdotal quotes advise that the government will build new mandatory grounds into Section 8 to ensure landlords can give notice to end a tenancy if they choose to sell or live in their property. Propertymark CEO Nathan Emerson confirms that, while we don’t yet know much detail, the government has committed to ensuring that there are options for landlords to gain property access by a newly revised Section 8 notice.
Other recommendations within the bill include:
- Standardised periodic tenancies as a single system to replace Assured and Assured Shorthold Tenancy Agreements. Tenants must give at least two months’ notice to avoid long void periods for landlords.
- The notice period for rent increases will climb to two months, with one rent price rise allowed per year.
- Minimum housing standards will be introduced, meaning rental properties must be free of serious health and safety hazards.
- Blanket bans on children, pets or benefit recipients will become unlawful, although landlords will be given rights such as requiring pet insurance to cover the cost of repairs.
A new Ombudsman has also been suggested, which means that landlords and tenants will have one point of contact to mediate and resolve disputes.
When Will the Renters Reform Bill Become Law?
When the full paper was published in June 2022, the announcement was that the law, with any subsequent amendments, would be passed before the end of this parliamentary session.
There haven’t been any announcements about whether the current political drama and ongoing election of a new Prime Minister will impact this. Either way, it will be at least several months, and possibly longer, before any elements of the Renters Reform Bill become legally binding.
Advice for Professional Landlords
It’s important to remain conscious of the aim of the Renters Reform Bill – it isn’t designed to make things difficult for landlords but is rather focused on raising standards.
The landlord portal hasn’t been as high profile as Section 21 reforms (possibly because it isn’t so controversial). Still, it is a fundamental part of the proposals, aiming to reduce substandard rental properties by 50% in the next eight years. That may mean further incentives for quality landlords with excellent properties to ensure that residences well above minimum standards are rarely vacant.
There are already considerable housing shortages, much of which the government has looked to the private rental sector to fill, so there will likely be some modifications that benefit those responsible landlords, particularly if demand for properties rises and availability reduces.
Preparing for the Renters Reform Bill
Landlords have plenty of time to ensure they are prepared. One of the most important steps is to engage with an experienced local lettings agent or property management team.
We can advise on current and forthcoming regulations and handle the legal aspects of renting a property, such as holding deposits and vetting possible new tenants. Now may also be an optimal time to revisit your rental charges, with a valuation by a skilled adviser to help quantify whether your rental rates are at the right level or could be returning a better profit margin.
If you would like any guidance about the changes brought about by the Renters Reform Bill or steps you can take now to prepare, please contact the Tod Anstee Lettings Team. Our friendly team of property experts have been managing rental properties in Chichester and West Sussex for decades and can provide ongoing support now and after the Renters Reform Bill becomes law.