_Renters Reform Bill explained: what does it mean for landlords and tenants?
In June 2022, the Government released their White Paper “A fairer private rented sector” which outlined their intentions for reforming the Private Rented Sector (PRS).
Following this, the Renters (Reform) Bill was introduced into Parliament on 17th May 2023. The next stage is a second reading, which will give MPs their first opportunity to debate the general principles and themes of the Bill. Currently, there is no date for when the second reading will take place.
Once the second reading is complete, the Bill then goes through the committee stage, which is when each clause and any amendments to the Bill are debated. The Bill will then go through a further 8 stages through Parliament and the House of Lords before it eventually receives Royal Assent and becomes law.
So, what’s in the Bill now?
1. The end of Assured Shorthold Tenancies
a. Section 21 to be abolished and replaced with section 8, which will allow landlords to gain possession of their property
b. The grounds for possession will be updated to include mandatory grounds if a landlord wants to sell, move back in to or redevelop their property which can only be used after the first six months of a tenancy, mandatory and discretionary grounds if a tenant is in rent arrears or involved in anti-social behaviour, and discretionary grounds if a tenant breaches the terms of their tenancy. A full list of the proposed grounds can be found here
c. The end of fixed term tenancies; tenancies will be periodic from the start of the tenancy. The Bill will also limit rent periods to 28 days or 1 month
2. Rent increases will be restricted to once a year, with tenants having the ability to challenge a rent increase through the First Tier Tribunal if they believe it is above market rate
3. Tenants will be able to serve 2 months’ notice to end their tenancy
4. All landlords will have to sign up to a Government approved redress scheme; this will allow tenants to seek redress against landlords and is expected to be cheaper and quicker than going through the court system
5. All landlords will have to sign up to a Privately Rented Property Portal, creating a one stop shop for landlords to access guidance, receive updates on changes coming and demonstrate that they are compliant
6. Tenants will have the right to request a pet and a landlord will not be able to unreasonably refuse such a request
When are these changes coming in?
The date for these will be dependent on when Royal Assent is received, which is after a lengthy process that could take a year or more.
Points 1, 2 and 3 will be implemented in two stages. The Government will give at least 6 months’ notice of the first implementation date, at which point all new tenancies will need to comply.
Then, the Government will give a further 12 months’ notice for all tenancies to be captured under the new rules.
What else can we expect?
Government is working in partnership with the Ministry of Justice and HM Courts & Tribunals Service, to ensure that court users have access to a modern digital service.
The White Paper also committed to other reforms which Government plan to legislate at the earliest opportunity:
1. Decent Homes Standard which the Government are considering bringing into the PRS, this is already in the Social Sector
2. Blanket ban on refusal to rent to families with children, or those in receipt of benefits
3. Strengthen local council enforcement to help target criminal landlords
This is our understanding of the main points currently set out in the Bill – it still has many stages to get through which will include debates in the Commons and House of Lords. So, there could, and probably will, be changes along the way before it gets Royal Assent. It's worth noting that all of this applies only to Assured Shorthold Tenancies.
The Government have produced a set of guidance alongside the Bill which can be found here
As your Partners in Property, we will continue to keep you updated as this progresses and are available if you have any questions.