The Renters Reform Bill is the most significant, proposed piece of legislation to impact the private rented sector for the past 30 years. The government first published its plans in relation to renters reform in June 2022 with the publication of the white paper “A Fairer Private Rented Sector” and in May 2023, introduced the bill to Parliament.
The provisions of the bill include:
- Abolition of Section 21 notices
- Introduction of new grounds for possession
- End of fixed-term tenancies
- Change to the mechanism for rent reviews
- Requirement for all landlords to belong to an Ombudsman Scheme
- Introduction of a digital property portal
- Ban on landlords having a blanket ban on pets
What stage is the Renters Reform Bill currently at?
The bill recently passed through the Committee stage, where a detailed examination of the bill has taken place, with the third reading still to take place before the bill receives Royal Assent and becomes law.
The End of Section 21 "No Fault" Evictions and New Grounds for Possession
The Renters Reform Bill is intending to abolish Section 21 notices, the mechanism by which notice is served to end a tenancy without having to specify a reason This will be replaced with new, set grounds for possession which include selling the property and the landlord or immediate family moving back in. There will also be a change to gaining possession for cases of antisocial behaviour. This will become an accelerated ground, so the process will become quicker and move from a discretionary to mandatory ground.
Importantly, just ahead of the second reading, it was announced that further ground would be introduced for student tenancies so landlords can gain possession of their properties in line with each academic year.
There is no change to the way possession is obtained for rent arrears.
Recognising the importance of landlord confidence, just before the second reading in October, the government announced that the scrapping of Section 21 notices would be delayed until the courts have a chance to reform. They have stopped short of introducing a Housing Court, but we expect the court changes to include: Those improvements include:
- Digitalisation of the court process
- Improving bailiff services to create a more efficient and predictable process
- Strengthen mediation services
Pets in Properties
The Renters Reform Bill will prevent landlords having a blanket ban on keeping pets in the property and states that landlords won’t be able to unreasonably withhold consent. Landlords will be entitled to request that tenants take out insurance to cover the cost of any damage caused by pets if consent is granted.
End to fixed-term tenancies and Rent Reviews
The new legislation will also see the end of fixed-term tenancies replaced by month-to-month or periodic tenancies. This change will allow tenants to end a tenancy at any time by serving 2 months' notice. Landlords will also be able to serve notice at any time under the provisions of the new possession grounds.
Importantly, rents can still be reviewed annually but with an increased notice period of 2 months and using a Section 13 notice. This notice has been used for periodic for many years now and agents are well used to serving this on behalf of landlords.
Requirement to belong to an Ombudsman Scheme
The bill also sets the requirement for all landlords to belong to an Ombudsman scheme. We anticipate that landlords using an agents’ ‘managed service’ will be covered under the agents membership whilst ‘self-managed’ landlords will need to join a scheme, This provision is designed to give tenants a point of redress and for both landlords and tenants to have the comfort that disputes that they cannot resolve will be fairly reviewed and adjudicated on with binding outcomes.
Introduction of a Digital Property Portal
The bill will also introduce a new digital property portal where landlords will register and upload compliance information, which will provide support for landlords in meeting compliance requirements while allowing tenants to have oversight of compliance details ahead of committing to renting a property.
The property portal will be run by local councils that will have the power to levy fines against non-compliant landlords. We anticipate that we will be able to maintain the compliance details on the portal for landlords using our managed service.
At John Shepherd, we understand that being a landlord involves more than just property management. That's why we go above and beyond to provide a comprehensive range of services tailored to your needs and are closely watching the progress and detail of the bill to ensure our service continues to meet your needs. As your trusted letting agent, we're here to navigate the complexities of the Renters Reform Bill and act as your reliable ally every step of the way.
How we can help you
We remain committed to assisting you through these changes and ensuring your investment interests are protected. Our experienced team has a deep understanding of the rental market and the specific needs of landlords. Rest assured that we will continue to stay up to date with all legislative developments and provide you with expert guidance throughout this transitional period.
As the situation currently stands, we will support you with the following:
Serve Notice with Ease
Serving notices to tenants can be a legal minefield. We take care of the administrative intricacies and ensure that all notices are drafted correctly, compliant with regulations, and served within the required timelines, helping you navigate complex legal procedures with confidence.
Dealing with Pet Requests
Deciding whether to permit pets in your rental property can be a difficult task. Our seasoned letting agents facilitate transparent communication, establish reasonable pet regulations, and assist you in addressing any concerns. We would prioritise tenants who demonstrate responsible pet ownership.
Considerations for Student Tenancies
Managing student tenancies requires specific expertise. We specialise in student accommodation, understanding the unique considerations such as turnover during academic breaks and compliance with student-specific regulations. With our knowledge of the academic calendar and regulations, we ensure a seamless rental process tailored to the dynamic nature of student rentals.
Possession & Arrears Teams
Dealing with tenant arrears and possession issues can be time-consuming and legally complex. That's why we have an in-house team of specialists dedicated to resolving these issues efficiently. Our team handles all legal procedures, communicates with tenants regarding overdue payments, and takes appropriate actions to protect your interests. With our specialists on your side, you can expect a streamlined resolution process with minimal delays.
Advocating for Positive Reforms
We believe in continuously improving the court process for eviction and possession cases. As your proactive letting agent, we actively engage with industry stakeholders, participate in consultations, and provide insights to policymakers. By advocating for changes, we strive to influence positive reforms that benefit both landlords and tenants, ensuring a fair and expedited court process.
We recognise that the private rented sector is evolving, and we're committed to keeping you informed about future developments. The proposed Renters Reform Bill hints at broader changes, including elevated housing standards and the elimination of discriminatory practices. We stay ahead of these changes, ensuring that you are prepared for what the future holds.
The date that this will be implemented is not yet confirmed but we anticipate that it will be Autumn 2024. The changes will be implemented in two stages, and there will be 6 months’ notice given. There will then be a minimum of 12 months before the second changes take effect.
The main changes are:
- An end to fixed term tenancies.
- End of use of Section 21 notice for no fault evictions.
- A change to how rent can be increased.
- Requirement for all properties to meet the Decent Homes Standard.
- Requirement for all landlords to join an Ombudsman Scheme.
- Registration of properties on a new property portal.
As the name suggests, a fixed-term tenancy is for a set period of time, at the end of which either you or your tenant can serve notice to end the tenancy. The changes will see all tenancies becoming periodic which is a tenancy on a rolling basis with no end date with the tenant able to give 2 months’ notice to end the tenancy at any time.
The law will see the end of the Section 21 notice, which is used for no fault evictions i.e. the mechanism for ending a tenancy without needing to give a reason. New grounds for possession are being introduced to enable you to take back your property in circumstances such as if you wish to sell the property or move back in. You will, of course, still be able to end the tenancy if the rent falls into a certain amount of arrears or for anti-social behaviour.
Yes, you can still increase the rent once a year, but this can now only be done by serving two months’ notice using a Section 13 notice, setting out the details of the rent increase on your tenant. We will be able to do this on your behalf.
All rented properties will need to be maintained at a certain standard. We are confident that all properties under our management already meet this standard and will continue to work with you to advise and assist with any works that may be required in future. If we don’t manage your property, we can undertake a review of the condition and health of a property on request.
Yes, a new Ombudsman service is being introduced which all landlords will have to join. This is being introduced to resolve disputes between landlords and tenants. We do not yet know if there will be a membership cost but are confident that if we manage your property, we will be able to administer this on your behalf.
You will need to register your properties on a new property portal to which councils, landlords, and tenants will have access. The purpose is to give tenants and councils access to information such as compliance details so that they can see that the property has all the necessary safety checks in place. As an agent, we anticipate having access to this portal and, under our managed service, hope to be able to administer this on your behalf. Additionally, we will continue to arrange for all safety checks to be undertaken to keep you compliant.
Yes! You still have the right to accept a particular tenant at your property. However, the Government is proposing that blanket bans on families with children or pets, or recipients of benefits will be prevented. As an agent, we already ensure that there are no such blanket bans in place.
No, the proposal is to allow tenants to have the right to request a pet in their property, which cannot be unreasonably refused. In turn, you will be able to ask that tenants buy pet insurance to protect against any potential damage to your property.