The Labour government introduced its Renters’ Rights Bill to Parliament for its first reading in September 2024.
This is different from the Conservative version, the Renters’ Reform Bill, which didn’t become law in time before the general election in July 2024.
We’ve now spoken to countless landlords who are confused and worried about the differences between the two Bills and how the new Bill will affect them and the private rental sector. This article outlines key areas where the proposed legislation is identical to the previous Bill and where there are differences.
Background
The Renters’ Rights Bill was announced by the Labour Government in September and had its first reading in parliament on 11 September 2024. While it may sound similar to the Conservatives’ Renters’ (Reform) Bill and, in some areas, be the same, there are critical differences:
- Abolishment of Section 21
This law change—which is seen as very divisive—will happen as soon as the Bill is passed. On the other hand, the Conservative Bill proposed that implementation would be delayed until new reforms reduced the current backlog in the court system.
- Rent increases
Section 13 notices will still be the method by which rent can be increased once a year, but Labour has tweaked this to add that any rent increase can only be to the ‘market rate’. Tenants can also challenge the rent amount agreed upon at any time within the first six months by going to a tribunal.
- Bidding wars
This was not included in the Reform Bill earlier this year, so is totally new.
This addition limits the rent allowed to be offered to the advertised asking price with a £7,000 fee if this is breached.
- Pets in Lets
There has been no change here. Tenants can request permission for a pet in their let in writing and if a landlord refuses, they must give a valid reason in writing.
- Awaabs Law
This law will now apply under the new Bill. It sets clear legal expectations about the timeframes within which landlords must take action to make homes safe where they contain serious hazards.
The law is named after two-year-old Awaab Ishak, whose death was caused by the dampness and mould in his home.
- Tenancy lengths
As already proposed in the Reform Bill, tenancies will become periodic, allowing the tenant to give notice at any time.
- Minimum term
Under the Reform Bill, tenants would need to have been in a tenancy for a minimum of six months in the property, but now the proposal is for all tenancies to become periodic from day one. This means the contract will be on a monthly rolling basis, with no specified end date.
- Landlord giving notice
Under grounds 1A and 2 for repossession, where a landlord needs to sell the property or move into it, the new proposal is that a landlord will now need to give four months’ notice to the tenant instead of the previous two months. If the landlord doesn’t sell or move into the property, the property cannot be re-let for 12 months after the notice expires.
- No transition period
The legislation proposed will become effective for all tenancies, new and current, on the same date.
- Property Ombudsman membership
All landlords will need to join a new Ombudsman service, which will provide complaint resolution services for tenants and have the power to compel landlords to issue apologies, provide information, carry out remedial action and pay compensation.
Agents who advertise properties where the landlord is not registered could face enforcement action from local councils, ranging from civil penalties of up to £7,000 to criminal prosecution or fines of as much as £40,000 for repeated breaches.
What does this mean to our clients?
The changes proposed in legislation are significant for the private rental sector, potentially reshaping the landlord-tenant relationship. It’s crucial for landlords to be prepared and understand how the changes will affect them. The changes could become law as soon as summer 2025.
We are keeping up to date with the proposals and the Bill’s progress on its way to becoming law, understanding what the changes will mean for our landlords and how changes in the law will affect the legal rights of both tenants and landlords.
We have worked with Grace Miller & Co for a number of years now. We have always found them to be an excellent company to work with who really understand the property business and their clients’ needs. They provide a very professional service that I would thoroughly recommend. – HG
If you have any concerns you’d like to discuss or you’d like an up-to-date rental valuation of your property, please get in touch.
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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.
