_Renters’ Rights Bill explained: what does it mean for landlords and tenants?

During the King’s Speech on 17 July 2024, it was stated that “Legislation will be introduced to give greater rights and protections to people renting their homes, including ending no-fault evictions and reforming grounds for possession”.

On 11 September 2024, the Renters’ Rights Bill was introduced to UK Parliament with its first reading in the House of Commons.

To help you understand the main points currently set out in the Bill, we have put together this important update. The Bill still has many stages to get through which will include debates in the Commons and House of Lords. So, there could be changes before it receives Royal Assent.  It's also worth noting that all of this applies only to Assured Shorthold Tenancies.

So, what’s in the Bill?

1. The end of Assured Shorthold Tenancies

a. Section 21 to be abolished as soon as the Bill comes in; it will be replaced with section 8, which will allow landlords to gain possession of their property using prescribed grounds only

b. The prescribed grounds for possession will be updated to include mandatory grounds if a landlord wants to sell or move back in, landlords will be required to give 4 months’ notice and such notice cannot expire earlier than 12 months from the start date of the tenancy. The mandatory and discretionary grounds will also be updated for a tenant who is in rent arrears, involved in anti-social behaviour or breaches the terms of their tenancy agreement.

c. The end of fixed term tenancies; tenancies will be periodic from the start of the tenancy.

d. Rent periods will be limited to monthly or less.

2. Rent increases will be restricted to once a year and by way of a formal Section 13 notice only, with tenants having the ability to challenge a rent increase through the First Tier Tribunal.

3. Tenants will be able to serve 2 months’ notice (or less if agreed otherwise) in writing to end their tenancy from the start of their tenancy, and common law suggests a tenant’s notice should expire at the end of a rental period. For example, if the tenant’s notice period is two months, and the rent due date is 1st of the month and the tenant serves notice on 15th June, the notice would be to 31 August. If one tenant gives notice to leave, they are binding all tenants to that notice.

4. Landlords will have to sign up to a Landlord Redress Scheme, with landlords required to sign up before the property is marketed. This will allow tenants to seek redress against landlords and is expected to be cheaper and quicker than going through the court system.

5. Landlords will need to sign up to a PRS database, registering themselves and their property before the property is marketed.

6. Tenants will have the right to request a pet and a landlord will not be able to unreasonably refuse such a request unless the superior landlord doesn’t allow pets.

7. Agreed rent cannot be higher than the advertised rent and bidding will not be allowed above the advertised rent.

8. All tenants must be provided with a written tenancy agreement.

9. Landlords cannot discriminate against those who receive benefits or those with children living with them or visiting.

10. Awaab’s Law will apply to the Private Rented Sector, outlining set times to investigate and repair certain issues.

11. Decent Homes Standard will also apply to the Private Rented Sector to ensure minimum acceptable property standards.

When are these changes coming in?

The date for these will be dependent on when Royal Assent is received. It is rumoured to be in Summer 2025.

What will enforcement look like?

Local authorities’ enforcement powers are to be strengthened and extended, with civil penalties being increased up to £7,000 for initial or minor non-compliance and up to £40,000 for repeat offences.  Rent Repayment Orders could be demanded on some of the new offences, with penalties being increased from 12 to 24 months’ rent; superior landlords and company directors could now also be liable.

The government have produced a set of guidance alongside the Bill, which can be found here.

How can we support you?

At Knight Frank, a high percentage of the new tenancies we agree are non-ASTs, due to our excellent relationships with Relocation Agents who source many of our corporate tenants and much of the above won’t apply.

Our average tenancy length is 2 years and continues to increase. Over the last 2 years, over 80% of Knight Frank tenants served notice to end their tenancy, rather than landlords and rent arrears occurred in less than 1% of our total rent roll. We also have comparable evidence available to support in evidencing market value when proposing a rent increase.

If you choose to have your property managed by Knight Frank, you will have an expert responding to any property-related issues and access to our panel of contractors. This is why, as a client of Knight Frank, you can rest assured that your asset is in the best possible hands.

As your Partners in Property, we will continue to keep you updated as this progresses. If you have any queries, please contact Beverley Kennard, Partner, Head of Lettings Operations or Gary Hall, Partner, Head of Lettings.