The Renters’ Rights Bill is set to make the biggest changes to the private rented sector in over 30 years when it comes into force next year.
The Bill was given its first reading in the House of Commons last month with Housing Minister Matthew Pennycook predicting it will pass by spring next year and become law soon afterwards.
It contains much of its predecessor – the Renters (Reform) Bill – which was introduced by the last Conservative government but was lost when Rishi Sunak called the election In May and the Bill ran out of time.
The new Labour Government has introduced 80 additional clauses into the Renters’ Rights Bill with some major reforms to the Private Rented Sector (PRS) and creating a whole raft of measures for landlords to consider.
In short, it will abolish Section 21 notices; put a stop to in-tenancy rent rises and limit rent increases to once per year, capped at market levels. It will also introduce a new Decent Homes Standard to the private rented sector and see the creation of a digital Private Rented Sector database and a new ombudsman service.
Rental bidding wars will also be banned, and landlords will no longer be able to discriminate against families and benefit recipients while the use of Rent Repayment Orders will also be expanded.
The Renters’ Rights Bill will see a move to a simpler tenancy structure where all assured tenancies are periodic – providing more security for tenants and empowering them to challenge poor practice and unfair rent increases without fear of eviction.
It will also ensure possession grounds are fair to both parties, giving tenants more security, while ensuring landlords can recover their property when reasonable.
The bill introduces new safeguards for tenants, giving them more time to find a home if landlords evict to move in or sell, and ensuring unscrupulous landlords cannot misuse grounds.
The bill will also provide stronger protections against backdoor eviction by ensuring tenants are able to appeal excessive above-market rents which are purely designed to force them out.
As is now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed.
There will also be a new Private Rented Sector Landlord Ombudsman that will provide “quick, fair, impartial and binding resolution for tenants’ complaints about their landlord” – putting tenant-landlord complaint resolution on a par with complaining to a property / estate agent.
It’s also hoped that the creation of a Private Rented Sector Database will help landlords understand their legal obligations and demonstrate compliance (giving good landlords confidence in their position), alongside providing better information to tenants to make informed decisions when entering into a tenancy agreement.
Tenants are also going to have strengthened rights to request a pet in the property, which the landlord must consider and cannot unreasonably refuse.
But as a result landlords will be able to require pet insurance to cover any damage to their property.
The Decent Homes Standard will also be applied to the private rented sector to give renters safer, better value homes and remove the blight of poor-quality homes in local communities.
Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “Plans to reform the private rented sector have been on the table for over five years now.
“The end of Section 21, ‘no explanation’ repossessions represents the biggest change to the sector for over 30 years. Once the Bill is passed, it is vital that sufficient time is provided to enable the sector to properly prepare.
“Over 4.5 million households will need tenancy agreements updating, letting agent staff and landlords will need to undertake training and insurance and mortgage providers will need to adjust policies and rates. None of this will happen overnight.
“Too often the actions of a minority of rogue and criminal landlords have brought the sector into disrepute. We therefore support measures to ensure every rental home is of a decent quality, and swift action is taken where standards threaten the health of tenants. However, this all needs to be backed up with robust enforcement by councils.”
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