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What is the Renters Reform Bill and how will it affect landlords?

A man writing on a piece of paper.
11 July 2023

By UKinsuranceNET In Landlord Advice

Billed by the government itself as one of the most significant pieces of legislation affecting England’s 11 million or so renters, it’s hardly surprising that the Renters Reform Bill has grabbed so much attention.

The present government formally introduced the legislation in mid-May 2023. It  marks a significant change for private renting, which justifies a closer look at just what it all might mean.

Overhauling the private rented sector

The Bill is the centrepiece of the government’s long-discussed objective of overhauling this part of the housing market. The declared aim has been to establish a “fairer” private rented sector:

Assured shorthold tenancies

  • the most common type of tenancy in the private rented sector is the assured shorthold tenancy (AST);
  • the Renters Reform Bill would abolish ASTs and replace them with “monthly periodic assured tenancies” that have no fixed termination date;
  • tenants will have the power to give two months’ notice on their tenancy;

“No-fault” evictions

  • from the beginning, a central plank in the government’s promise has been the abolition of what is commonly referred to as “no-fault” evictions under Section 21 of the Housing Act;
  • Section 21 currently gives landlords the right to repossess a let property without giving any reason for the notice of eviction and may be used in the absence of any fault on the part of the tenant;
  • the Bill proposes that “no-fault” evictions will be replaced by repossession procedures that are fairer to both tenants and landlords – while the “no-fault” route is abolished, the Bill suggests it will be easier for landlords to evict on the grounds of tenants’ anti-social behaviour or persistent rent arrears;

Fairer rents

  • the promise of fairer rents will be enforced by “First-Tier Tribunals” who can determine and fix a fair market rent if a tenant appeals against a landlord’s intention to increase the rent;

Private rented sector Ombudsman

  • the Bill also promises an independent Ombudsman for the private rented sector;
  • the Ombudsman would offer a free service to current or prospective tenants who have a genuine grievance about the way a landlord has handled a complaint. It could be any kind of complaint – about the landlord’s behaviour, say, a failure to get repairs done on time, or even the overall standard of the let property;
  • the Ombudsman will have the authority to issue various remedies – including a call for the landlord to apologise, provide additional information, take the appropriate corrective action, or compensate the aggrieved tenant. Fines may be imposed of up to £5,000, increasing to £30,000 for repeated breaches of the regulations;
  • landlords will be obliged to register their membership of the Ombudsman scheme and those that don’t lay themselves open to fines of between £5,000 and £30,000, a criminal prosecution, or a banning order to act as a landlord;

Digital support

  • the proposals in the Renters Reform Bill are said to be supported by the appropriate levels of technology;
  • a new private rented sector database, for instance, will underpin a digital “Privately Rented Property Portal” service;
  • every landlord will need to sign up to it and provide the required details of the property they let – on pain of penalties for failing to do so;
  • the Property Portal would then also offer a one-stop shop for landlords in search of guidance on their obligations and responsibilities so that they can comply with the legislation;

Tenants and Pets

  • landlords would not be able to turn down any reasonable request for a tenant to keep a pet on the premises;
  • the reference to “reasonable request” suggests that the pet would need to be well-behaved, and the draft legislation makes specific reference to a possible requirement for the tenant to take out appropriate insurance cover against any damage caused.

Reaction

The Renters Reform Bill is a substantial piece of legislation.

On behalf of tenants, the housing charity Shelter has been loud in its support for “a proposed law that can transform private renting for good”.

The National Residential Landlords Association (NRLA) supports reforms of the private rented sector that are “fair and workable”. But it also warns against what it describes as “anti-landlord rhetoric”.

The Local Government Association (LGA) welcomes legislation it says is designed to grant tenants a safe and stable home. It supports the move to give tenants greater rights in their relationship with their landlord.

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