The government has been promising to overhaul the landlord and tenant laws in England for several years now. Last week they published concrete proposals for doing this in the shape of the Renters (Reform) Bill.
Here’s what landlords, agents and tenants need to know about the new Renters (Reform) Bill:
The main points from the Renters (Reform) Bill
The government say that the main purposes of the Bill are to ensure private renters have a secure, good quality home while giving landlords more confidence that they can regain possession of their properties where they have good reason for doing so.
The main changes to the law being proposed by the Bill are as follows:
* There will be no more assured shorthold tenancies (ASTs). In future all tenancies will be periodic tenancies. Existing tenancies will become periodic too.
* The possession and eviction rules for rental property will change. Section 21 evictions (no fault evictions as they are sometimes called) will no longer be allowed.
* It should be easier and quicker for landlords to evict tenants where tenants break the tenancy, eg. in the case of anti social behaviour or serious rent arrears. Landlords will also be able to evict tenants if they wish to sell their property or to live in the property themselves/move family in.
There will be clearer grounds for eviction with eviction being granted by courts where landlords can prove the grounds have been met. The court eviction procedure will be streamlined.
* So-called revenge evictions will be prohibited. Landlords won’t be able to evict tenants simply because they complain about the condition of the property or the rent/rent increases.
* Rent increases will only be possible once a year and up to market rent levels. Landlords will need to give two month’s notice of a rent increase.
* Landlords will need to join an approved redress scheme. Tenants will be able to raise any complaints with the redress scheme. The scheme will be able to order landlords to put things right or pay compensation. There will be an Ombudsman to oversee the process.
* Landlords will have to register their properties with a new Private Rented Sector Database and a new Property Portal. Landlords (and also agents) will not be able to list a property for rent until this has been done.
* There will be new provision for tenants to have pets if they wish to do so. Tenants will be able to request permission to have pets which landlords will not be able to unreasonably refuse. Tenants will have to have or pay for insurance to cover any pet damage however.
Local authorities will police many of these new rules, aided by a new lead enforcement authority. They will be able to impose penalties on landlords who break them.
The Bill also mentions that the government intends to introduce the Decent Homes Standard into the private rented sector, as well as banning discrimination against benefits claimants and families when listing properties for let. It also mentions possible new powers for local authorities. However, these measures are not actually included as part of this Bill.
What could Renters Reform mean for the lettings market?
It’s very important to remember that the Renters (Reform) Bill isn’t law as yet. It has to pass through Parliament in the usual way. It’s likely to be a year or even 18 months before it could become law. Even then, there are likely to be amendments along the way and not all of the measures in the Bill will necessarily make it into law – if indeed it become law at all.
If and when the Renters (Reform) Bill does become law it will almost certainly bring transformational change to the lettings market. There will be some benefits for both tenants and landlords alike. However at the end of the day it is likely to make letting out property harder and more expensive than it is now.
As the Bill moves through Parliament it could potentially encourage more landlords to leave the lettings market and discourage some new investors from entering the market. This could reduce the supply of property to rent and possibly push up rents even before the new proposed law comes into effect.