The Renters’ Reform Bill represents a seismic shake-up of the private rented sector, perhaps the biggest in over three decades. Sweeping reforms have been outlined by the sitting Government, which aims to reset the tenant-landlord relationship and level up the quality of housing in all parts of the country.
However, since initial consultations in April 2019 and the publication of its policy paper, A Fairer Private Rented Sector in June 2022, the proposals have still not been passed into law. So where are we currently with the Renters’ Reform Bill, and what does it mean for tenants and landlords across the country?
What is the Renters’ Reform Bill?
Back in April 2019, after a consultation period about reforming tenancies in England, the government published its initial response and set out a blueprint that it said would deliver a “fairer, more secure, and higher quality” PRS.
A white paper soon followed in June 2022, introducing what Michael Gove dubbed a “New Deal” for 4.4 million households under the care of private landlords.
Since then, however, many have been left wondering when the Renters’ Reform Bill will see the light of day and formally become law across the country. While the government has said it remains committed to the reforms outlined in the white paper, no firm date has been forthcoming, though it is expected to be introduced in the current session of Parliament, which ends in May 2023.
The Renters’ Reform Bill proposes a number of changes to the private rented sector, especially around the relationship between landlords and 4.4 million privately renting tenants, while offering support for people under pressure from the cost of living crisis. It has also been stated that the proposed bill will attempt to address “arbitrary and unfair” rent increases and further protections for the most vulnerable by scrapping Section 21 evictions.
“Everyone has a right to a decent home. No one should be condemned to live in properties that are inadequately heated, unsafe, or unhealthy” said Michael Gove, Secretary of State for Levelling Up, Housing and Communities. “Yet more than 2.8 million of our fellow citizens are paying to live in homes that are not fit for the 21st century. Tackling this is critical to our mission to level up the country.”
According to government figures, the majority of tenants in the country benefit from safe and secure rental accommodation, but 21% of private renters live in unfit homes. In order to address this, the “New Deal” will extend the Decent Homes Standard – guidance for setting the minimum standards that social homes are required to meet – to the private sector.
This alone is momentous, and a huge overhaul of the current standards, meaning all private rented accommodation must adhere to the same stringent health and safety standards that social housing has had to abide by since the early 2000s. Under this standard, landlords must keep properties in a “good state of repair”.
Another huge talking point is the end of ‘no fault’ section 21 evictions. This type of eviction has up until now allowed landlords to terminate tenancies without reason or without demonstrating a “fault” on the part of the tenant, at least in theory. Many campaign groups have long called for an end to proceedings of this type.
One such campaign group, Shelter, said that government figures released earlier this year showed the number of households living in privately rented homes in England who were evicted by bailiffs as a result of Section 21 proceedings had increased by 143% year on year, from 792 households between October and December 2021 to 1,924 households between October and December 2022.
The measures published in the initial white paper also include the following:
- Outlawing blanket bands on renting to families on benefits or those with children
- Ending the use of “arbitrary rent review clauses”, ultimately stopping rent hikes and giving tenants a channel for rent recuperation if the standard of a home is deemed “non-decent”
- Giving all tenants the right to request a pet in their home, which the landlord cannot unreasonably refuse
- Moving all tenants to a periodic tenancy system, which would spell the end for assured and assured shorthold tenancies
- Doubling rent increase notice periods from one month to two months and enabling tenants to challenge “unjustifiable” increases
- Introduce a Private Renters’ Ombudsman for settling disputes between landlords and tenants without going to court
- Rolling out a new property portal that will act as a “single front door” for landlords to understand and comply with new responsibilities under the reforms
How does the Renters’ Reform Bill help tenants?
Michael Gove, Secretary of State for Levelling Up, Housing and Communities, said: “The reality today is that far too many renters are living in damp, dangerous, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.
“They’re often frightened to raise a complaint. If they do, there is no guarantee that they won’t be penalised for it, that their rent won’t shoot up as a result, or that they won’t be hit with a Section 21 notice asking them to leave.”
While there are many criticisms of the Renters’ Reform Bill in its early stages, and from both sides of the debate, it is clear that the protections for tenants outweigh the benefits for landlords.
However, widespread reforms, regardless of who they directly impact, are ultimately for the betterment of the private rented sector as a whole, despite the government being accused of “anti-landlord rhetoric” by some campaign groups and industry figures.
According to Shelter, scrapping section 21 ‘no fault’ evictions will give renters relief from a pervasive and deeply entrenched fear of eviction, giving them the ways and means to exercise their renting rights freely and without fear of retaliation.
The campaign group said that tenants are “putting up with anything from negligence to dangerous living conditions” and that renters are afraid to complain in case they are evicted from their homes.
When it comes to the landlord register, it is believed that more transparency and clarity around who tenants are entering an agreement with will drive accountability, and therefore compliance, giving them insight into the legality and suitability of a landlord’s property or properties.
The government will also reform the “grounds of possessions” under a section 8 notice, which can currently be issued if tenants have broken the rules of their tenancy, like if they’re behind in rent or have damaged the property.
The government has said that the changes to section 8 make them more “comprehensive, fair, and efficient” for both tenants and landlords, protecting the former’s security and the latter’s right to manage their property. Section 8 also changes the rent arrears eviction threshold to two-month arrears three times in the previous three years, extending the notice period for these grounds to four weeks.
What will the Renters' Reform Bill mean for landlords?
In addition to the impact the proposals will have on tenants, the Renters’ Reform Bill will also impact landlords in a number of ways.
There are an estimated 2.3 million private landlords in England, which the government says will receive greater clarity and support through the introduction of these new measures.
It also states that the Private Renters’ Ombudsman represents a faster and more cost-effective way for landlords to settle disputes, without the rigours and timeframes associated with traditional court channels.
In addition to this, it is claimed that the new measures will help landlords gain possession of their properties in a much more efficient manner than before, especially in the case of anti-social tenants. While earlier proposals for a “Housing Court” have been shelved indefinitely, the severe backlog of court possession actions has been crying out for a fast, low-cost mechanism for landlords to expedite possession claims, which this could support somewhat.
The introduction of a property portal can also be of benefit to the landlord, states the government, given that it collates all the necessary information and guidance in one, single platform for compliance purposes. This seeks to help demystify some of the more nuanced guidance that has been present prior to these changes. The property portal will also aid information sharing for councils, tenants and landlords in the case of “rogue operators”.
There are also sweeping changes to tenancies, with assured tenancies and assured shorthold tenancies sunsetted in favour of “periodic tenancies”. Whether this is of benefit to the landlord or not is open to debate, though some believe that a standard tenancy format across the private rented sector will make things more efficient and clear.
What it does mean is that tenants can leave “poor quality” housing or if there is a change of circumstance, without being liable for the rent payments. This could act as a strong deterrent for landlords of sub-standard accommodation.
Perhaps the most divisive issue is that of ‘no fault’ section 21 evictions. On one hand, the new grounds for eviction give landlords the option to end tenancies if they want to sell up, so long as six months have passed since the contract commenced. On the other hand, tenants can end tenancies by giving two months' notice, which could leave many landlords in a precarious or powerless position when it comes to long-term occupancy and security.
However, Propertymark has warned that changes to the rules could result in fewer homes being available for tenants and that the bill doesn’t give enough protection to landlords and letting agents. The move towards periodic tenancies, it says, will mean that tenants can effectively “quit” a property, which could pose a real problem for landlords across the country.
While the renowned industry association welcomes reforms in the sector, it has questioned elements of the proposed changes, including the revised grounds for possession. It fears that the dissolution of section 21 notices will give landlords less of an ability to regain control of properties under reasonable circumstances.
“Letting agents and landlords often form their view of the housing market and the longevity of the sector based on sentiment and certainty,” said Timothy Douglas, head of policy and campaigns at Propertymark. “There are elements of the proposed reform that if progressed will create further risk and our member agents say they have seen enough to convince some of their landlords to sell up or indicate an intention to. Our research shows many properties sold off by landlords are not returning to the rental market.”
Douglas continued by saying that if landlords reject changes to policy, they could quit the private rented sector. As a result, there is a danger that the PRS will shrink, and limited supply would see prices dramatically increase.
“The knock-on effect will see local authorities under unmanageable pressure to help many households secure a suitable alternative against a backdrop of significant under-supply of affordable homes to rent.”
Landlords must also consider changes to rent increase rules, whereby landlords can only increase rents once a year after giving two months’ notice. This gives tenants time to consider options and, in some cases, challenge the proposed rent increase. The government has stated that this is to end the practice of “backdoor evictions”, which have been engineered through an unreasonable rent increase.
While credit checks and affordability criteria remain, landlords are no longer able to impose a blanket ban on families with children or families on benefits, and any family that wishes to keep a pet in a private rented home cannot be outright declined, though landlords still maintain the right to refuse pets.
Renters’ Reform Bill Timeline
Here are the key Renters’ Reform Bill dates as of 21st March 2023.
- April 2019: Initial consultations over the bill
- February 2022: Initial consultation white paper published by the government
- May 2022: Renters’ Reform Bill promised in the Queen’s Speech
- June 2022: A Fairer Private Rented Sector white paper published by the government
- May 2023: Renters’ Reform Bill to be debated and voted on this Spring
It is expected that once the Renters’ Reform Bill becomes an act of parliament, six months' notice will be given of an initial implementation date. From then, all new tenancies that qualify will be under the new rules.
Aas it is a two-tiered rollout plan, approximately twelve months after the initial implementation date, all existing assured and assured shorthold tenancies will be moved to the new periodic tenancy system.
For landlords, this represents an unprecedented shakeup of the private rented sector, so they are urged to be mindful of the forthcoming changes lest they fall foul of the soon-to-be law. Ensuring that all documentation, inventory checks, inspections and evidence are kept up-to-date and consistent is strongly advised as landlords, agents and tenants prepare to transition to the new rules, that is when they eventually do come to pass.