Renters Rights Bill Latest and why there are reasons to be positive

Key Updates:

• Abolition of Section 21 ("No-Fault" Evictions):

Current Situation: Section 21 allows landlords to evict tenants without a stated reason, often leaving tenants with little security.

Proposed Change: The bill eliminates Section 21, ensuring that tenants can only be evicted under specific, justifiable circumstances, thereby providing greater stability in their housing.

• Transition to Rolling Tenancies:

Current Situation: Many tenancies are fixed term, often leading to uncertainty at the end of each term.

Proposed Change: The bill introduces rolling periodic tenancies, meaning tenants can stay indefinitely unless they choose to leave. Tenants need to give two months' notice, while landlords must provide four months' notice if they wish to move in or sell. Additionally, tenants are protected from eviction during the first 12 months.

New Grounds for Possession:

The bill introduces specific grounds where landlords can seek possession of their property:

Landlord Moving In:

• Landlords can reclaim their property if they, or a close family member, need to move in. This provides flexibility for landlords whilst ensuring the reason for eviction is valid.

Selling the Property:

• Landlords can evict tenants if they intend to sell. However, this cannot occur within the first 12 months of the tenancy, ensuring some stability for tenants.

Breach of Tenancy Terms:

• Tenants who violate significant terms, such as failing to pay rent or engaging in antisocial behaviour, can be evicted. This balances tenant rights with the need for landlords to manage their properties effectively.

Repeated Rent Arrears:

• Landlords can evict tenants with a history of repeated rent arrears, even if they eventually pay up. This addresses the issue of tenants who habitually fall behind on rent.

Compulsory Ombudsman Membership

Regardless of whether they use a professional agent or not landlords will have to join a new Ombudsman service which will provide a complaints resolution service for tenants and have the power to compel landlords to issue, apologies, provide information, carry out remedial action and pay out compensation.

Agent’s advertising properties for landlords who are not registered with this scheme could face enforcement actions from local councils ranging from civil penalties up to £7000 to criminal prosecution or fines of as £40,000 for repeated breaches.

These penalties are applied to landlords aswell and tenants have the right to seek Rent repayment orders if their landlord persistently fails to register with the ombudsman.

PRS Database

Letting agent will be required to check that the property is registered correctly on the database before they market for let. Agents will face penalties for properties marketed which are not registered.

Other Provisions:

Rent Controls:

• Rent increases are limited to once per year and must align with market rates, preventing sudden and unfair hikes. Contractual in-tenancy rent increases are also banned.

Ban on Rental Bidding Wars:

• Landlords and agents must publish rent prices and cannot accept offers above the listed amount, preventing competitive bidding that could drive up rents.

Strengthened Enforcement

• The bill increases enforcement powers, including broader Rent Repayment Orders and higher fines for repeat offenders, adjusted for inflation. This ensures better compliance and protection for tenants.

The Renters Rights Bill seeks to balance tenant security with landlord rights, creating a fairer and more transparent rental market. By abolishing no-fault evictions and introducing new grounds for possession, it aims to reduce tenant vulnerability while still allowing landlords to manage their properties effectively. The inclusion of rent controls and the ban on bidding wars further aims to stabilise the rental market, making it more accessible and predictable for tenants.

Expert Verdict - "There are plenty of reasons to be positive"

Amardeep Lall, Head of Lettings, gives her take on the latest Renters Rights Bill Update.

There has been a lot of doom and gloom from landlords and rental publications around the Renters Rights Bill, but actually, there are plenty of reasons to be positive. Sections of the media have framed the bill as pro-tenant but it might be a big plus for many Landlords too. I say 'many landlords' because all landlords will now be held to a higher standard, and those failing to comply are likely to be forced out of the market, but is this really a bad thing? Serially bad landlords leaving the market will have a positive impact on the quality of rental housing available and potentially adding an increase on rents as supply will be impacted as the demand for rental accommodation will continue.

Now, what I will say is it's as important as ever having the right letting agent on your side will ensure tenants are managed correctly from the start to the end process which in turn will support the upkeep and growth of your investment.

Going forward self-managing landlords will have to comply to the Private Sector Landlord Ombudsman Scheme which is likely to create more work for self-managing landlords, so it's vital landlords seek the help of an agent who's got the knowledge and resources to do the majority of work for them and keep them compliant throughout. This is especially true for the let-only landlords out there.

One of the biggest concerns has been around the scrapping of no-fault evictions, but a landlord still has grounds to remove a problematic tenant. What's more, it's a good idea for landlords to use an agent who provides a rent guarantee. This way, even if a tenant falls into arrears, landlords have the security of still receiving rent until the situation is legally resolved.

It remains to be seen exactly how certain aspects of the bill will be implemented and although landlords may feel a little uncertain, this bill is certainly not the knockout blow for landlords that many would have you believe. As ever, we'll keep you in the loop as we await further updates.