What is the Renters Reform Bill?.
Introduced to Parliament in May, the Renters (Reform) Bill seeks to improve the private rental sector for both tenants and landlords. The bill will legislate for reforms set out in the private rented sector white paper published in 2022, which focuses on abolishing ‘no fault’ evictions and reforming landlord possession grounds.
The need for reform
The private rental sector has undergone substantial growth, doubling since 2004. Comprised of 11 million renters, the sector provides essential flexibility and a steppingstone towards homeownership for many.
However, not all renters enjoy the same level of security and well-being within this sector. The practice of ‘no fault’ evictions under Section 21 of the Housing Act 1988 has left some tenants vulnerable to short-notice displacements, leading to adverse effects on educational outcomes for children, job stability, and community engagement.
Responsible landlords face their own challenges, such as dealing with non-paying tenants, those displaying anti-social behaviour and being undercut by criminal landlords. The Renters (Reform) Bill aims to celebrate good landlords and ensure they have the means to regain possession of their properties when necessary.
Overview of reforms
The Renters (Reform) Bill introduces a range of reforms that have been developed in consultation with landlord and tenant groups over the past five years. The reforms are as follows:
- Abolish section 21 ‘no fault’ evictions: eliminating the uncertainty of ‘no fault’ evictions, providing more security for tenants, and empowering them to challenge poor practice and unfair rent increases without fear of eviction.
- Simplify possession grounds: allowing landlords to recover their property, including where they wish to sell their property, move in family, or evict tenants who are at fault.
- Protection against excessive rent increases: ensuring tenants are able to appeal excessively above-market rents which are designed to force them out, known as backdoor evictions.
- Private Rented Sector Ombudsman: a dedicated ombudsman will provide fair impartial and binding resolution to issues, in a quicker process than the court system.
- Privately Rented Property Portal: an online portal to help landlords understand their legal obligations and demonstrate compliance, while also supporting tenants to make better informed decisions when renting.
- Right to request a pet: landlords must consider the request and cannot unreasonably refuse; landlords will be able to require pet insurance to cover any damage to the property.
Other changes to the sector
The Government is also committed to other reforms that were contained in the white paper but have not been included in the Renters (Reform) Bill. This includes a Decent Homes Standard, like that already in place for the social rented sector, that seeks to improve the quality of homes, as well as outlawing landlords and agents from having a blanket ban on renting to tenants in receipt of benefits or with children.
When can we expect to see the reforms introduced?
The bill is currently at the second reading stage, which will provide MPs with an opportunity to debate on the bill’s main principles. However, with no indication of when the second reading will take place, the legislation – which was first proposed in the Conservative’s 2019 General Election manifesto – has been estimated to take up to 18 months to pass through Parliament.
Once the Renters (Reform) Bill has become law, the reforms will be introduced in two stages to ensure there is a sufficient notice period to implement necessary changes. After at least 6 months all new tenancies will be governed by the new rules and then after at least 12 months existing tenancies will also need to adhere to the reforms.
Reception by the sector
Despite the bill providing much needed support for renters, there is fear that a lack of clarity on how the reforms will work could drive landlords away from the sector. This comes after increasing repair, maintenance and mortgage costs are already bringing the viability of the sector into question for many landlords. Given the current housing shortage, it is important that any reforms adequately protect tenants but do not come at an unfair expense to landlords, as to avoid compounding the crisis.