Back in May 2023, the UK government announced the UK Renters (Reform) Bill. This move aims to create a better private rental market, improve housing conditions, address unfair rent increases, and strengthen the rights of the tenant.
With over four million properties in the UK currently rented, and the number doubling since 2001, this couldn’t come at a better time.
The proposals outlined include moving from periodic tenancy agreements to rolling month-by-month agreements, making rent increases fairer, tackling discrimination and helping to improve housing standards.
Although this Bill hasn’t yet become law, we believe that tenants and landlords alike deserve to understand and prepare for the potential changes to the private housing market. Keep reading to find out what to expect.
What does the UK Renters (Reform) Bill include?
Whether you’re a private landlord or tenant, there are many changes outlined in the UK Renter’s (Reform) Bill that you need to know about. These include the following:
1. Landlords will only be able to evict tenants under reasonable circumstances
When the Renter’s (Reform) Bill comes into effect, it will abolish section 21 “No Fault” evictions that mean that landlords do not need to give a reason to evict their tenant from the property. Instead, they will only be able to do so under reasonable circumstances.
This aims to encourage tenants to challenge unjust rent increases, landlords to engage and resolve issues and to overcome other poor practices often found within private property rental.
However, in October 2023, UK Parliament said that these changes can only happen when “Sufficient progress has been made to improve the courts. Firstly, we need to digitalise court processes and bailiff involvement, address anti-social behaviour, and provide advice to tenants and landlords alike before we can implement these changes and ensure they are effective.”
2. Landlords will be able to end a tenancy agreement if they have a legal reason
While section 21 stands to be removed, the UK government also proposes to strengthen section 8, ensuring that the landlord will be able to end a legal tenancy agreement if they have legal reason.
There are also plans to add a new mandatory ground for repeated rent arrears including mandatory eviction when the tenant has not paid at least two months’ rent three times in the last three years.
Landlords can also apply section 8 if they wish to sell their property or want family members to live there instead. However, the tenant must have been living in the property for at least 6 months before this can be applied.
3. Tenancies will instantly renew by month with no specific end date
With the Renters (Reform) Bill, the UK government also aims to simplify tenancy contracts by abolishing fixed-term tenancies of 6, 12 or 24 months. Instead, the tenancy will “roll by” every month.
If the tenant wants to leave a property, they will need to give two months’ notice so that landlords can avoid lengthy periods where their property lies unoccupied and can cover the costs of finding a new tenant.
4. Landlords will need to provide two months’ notice before rent increases
Rent increases will be better controlled with the Renters (Reform) Bill and limited to just one per year, putting an end to automatic rent increases that are vague or unfair. It also ensures that rent increases cannot be used in an attempt to evict tenants.
If you’re wondering “how much can my landlord increase my rent?”, this should put your mind at ease as any increases must be in line with market rate increases and you must be given two month’s notice.
5. Tenants will be able to apply to keep pets
Under the changes, tenants will now be able to request permission to keep a pet in their rental home. To do so, they must provide written confirmation that they have insurance for their pet or that they are willing to cover costs in case of pet damage.
The landlord must accept or refuse within 42 days of the request and cannot unreasonably withhold consent.
6. Landlords will need to join a government-approved ombudsman
Whether using a trusted letting agent or not, landlords will need to join a government approved ombudsman to protect the rights of all parties.
This allows a former or current tenant to make a complaint against a landlord that can be independently investigated. Then the ombudsman can compel the landlord to put things right, whether this is issuing an apology, providing information, taking remedial action or paying compensation of up to £25,000.
Failure to comply could result in repeat or serious offenders being liable for a Banner Order.
7. A new digital property portal will be created to support private landlords and tenants
The UK government also proposes to create a digital portal to help landlords understand their legal requirements and ensure that they can comply with them. Landlords will be legally required to register their property on the portal and the local council can take enforcement action if necessary.
Potential solutions are still being explored to make sure they work for local councils, tenants and landlords alike.
8. Private rental properties will have to meet certain standards
Perhaps most importantly for tenants, the Reform Bill will introduce minimum housing standards to the private housing sector for the first time.
This will protect the right to basic living standards and ensure that landlords are obliged to maintain their rental properties, resolve any issues or undertake more extensive repairs before they rent their property.
If this doesn’t happen, Local Authorities will be able to enforce these rules including fines of up to £30,000, a banning order or allow tenants to claim up to 24 months worth of rent back.
9. Landlords will not be able to discriminate against families with children or those on state benefits
Landlords will no longer be able to discriminate against certain renters such as those with children or those on social benefits. This means they will not be able to include “no DSS” or “no children” in their adverts nor prevent people from viewing a property.
10. Landlords will face additional rules
If a landlord commits several offences, they will be liable for a RPO (Rent Repayment Order). This means they will be forced to repay rent if they:
- Breach the ombudsman rules
- Fail to comply with improvement notice
- Use violence to enter a property.
- Deliberately provide false or misleading information to the property portal.
Summary
The Renters Reform Bill seeks to improve the private rental sector, benefitting both landlords and tenants alike. However, many landlords feel concerned that these changes will force them to comply with additional restrictions and leave their properties more vulnerable.
Tenants, on the other hand, welcome these changes as they mark significant progress towards changing their housing conditions and making privately renting a property more affordable and accessible.
What happens when these changes come into effect remains to be seen. However, the Renters Reform Bill looks set to eliminate previous problems within private rentals and protect the rights of both parties.
