Are You Ready for Rent Reform?

Mark ShiptonLandlord news, Property market news

The Renters Reform Bill has been introduced to Parliament and (at the time of writing) is
awaiting its second reading. This Bill has significant implications for landlords in the private
rental sector as it proposes radical changes that will significantly affect how landlords let
properties in the future. It’s been widely reported that the proposed reforms commit
to “bring in a better deal for renters” and mark “the biggest shake-up of the private rented
sector in 30 years”.
If you’re not aware of this upcoming change in legislation or are worried about its impact on
you, please read this article and don’t hesitate to contact us with any questions. We are
here to help.

Who introduced this Bill?

The Department for Levelling Up, Housing and Communities.

What’s included in the Bill at the moment?

There are several areas covered in the Bill – the main issues are covered below.

Section 21 “no-fault” evictions will be scrapped for tenants with Assured Shorthold Tenancy.

Currently, private landlords can repossess their properties by serving tenants with a Section
21 notice. This starts the legal process. A 2022 Government white paper states, “Removing
Section 21 will level the playing field between landlord and tenant – empowering tenants to
challenge poor practice and unjustified rent increases, as well as incentivising landlords to
engage and resolve issues.”

Once the Bill is passed, a landlord can only evict a tenant under reasonable circumstances –
for example, if they want to sell it or move into it themselves.

Farewell to fixed-term rental periods.

At the moment, most rental agreements are for six or 12 months. After this time, landlords can allow tenants to renew their contract or switch to a “periodic” tenancy – monthly payments on a rolling basis. 

Once the new Bill is passed, all rental properties will be under a periodic tenancy with no end date. Tenants would then need to give two months’ notice so that “landlords can recoup the costs of finding a tenant and avoid lengthy void periods.” 

A new Property Portal for private landlords and tenants

This centralised database would feature information on landlords, properties and rent charges, meaning tenants will know their landlord is fit and proper and that the property meets all legal requirements. This will allow renters to make an informed choice before entering into a tenancy agreement.

The government says that “too often tenants find out too late that they are renting a substandard property from landlords who wilfully fail to comply, and councils don’t know who to track down when serious issues arise.”

It notes that creating a new Property Portal will also “support good landlords to demonstrate regulatory compliance and to attract prospective tenants.”

Landlords will be legally required to register their property on the portal, and local councils will be empowered to take enforcement action against private landlords who don’t sign up. 

This will significantly change local councils’ ability to enforce against criminal landlords. 

We don’t yet have that much information about this portal, but the government will research and test potential solutions that work for tenants, landlords and councils. 

Landlords may need to join a redress scheme

Landlords may need to join a government-approved ombudsman, including all landlords in England, whether or not they use a letting agent. The landlord redress scheme will enable former or current tenants to make a complaint against a landlord, who would then be investigated. 

The ombudsman would have powers to “put things right for tenants”, including compelling landlords to issue an apology, provide information, take remedial action and/or pay compensation of up to £25,000.

The government also intends for the ombudsman to be able to require landlords to reimburse rent to tenants where the “service or standard of property they provide falls short of the mark”.

Rules around rent increases will change 

Once the Bill is passed, rent increases will be limited to once a year on at least two months’ notice. If tenants believe the increase is disproportionate, the government will “make sure that tenants have the confidence to challenge unjustified rent increases” through the First-tier Tribunal. It’s likely that the courts will be able to choose to increase rents for tenants and will encourage tenants to research market rates before challenging an increase. 

Tenants with pets

The Renters Reform Bill outlines that tenants will have more rights to keep pets on a property and that permission cannot be unreasonably withheld for them to do so. A landlord must accept or refuse consent by the 42nd day after the date of the request. This can be extended by one week if they ask for further information. Pet insurance will need to be in place, or tenants must confirm in writing that they will pay the landlord reasonable costs to cover the landlord’s insurance in the case of pet damage. 

It has yet to be determined when the Renters Reform Bill will be passed and come into law, though we know the second reading won’t take place until at least Autumn 2023.  But one thing is certain: whenever the Bill is passed, it will radically alter the Private Rental Market and place a significant burden on landlords. 

As an ARLA Propertymark Agent, we are updated with all the implications of this Bill and when the changes are coming. This means that we’ll be ready to inform our landlords so they can implement all changes in good time. 

Many landlords are very concerned about the impact of this Bill on their responsibilities. 

It’s never been more important to ensure that you and your property are protected by a knowledgeable and reputable agent who will ensure you’re compliant. 

At times like these, help and advice from industry experts is critical. Please do call or email to discuss this or any of our services. We’re here to help you. 

I have used Grace Miller & Co on multiple occasions when I needed rental services for my property. The team is extremely knowledgeable and always willing to help.

 Have recommended them to a few friends and family without reserve.

A Patel

Since opening Grace Miller & Co. in 2000, we’ve given all our clients proactive, professional and personable care. We’re very proud of the reputation we’ve built and the client reviews we’ve received. If you have a property in London or Surrey and would like to benefit from our outstanding service and unrivalled knowledge in residential lettings, sales and block and estate management, please contact us today