TENANCY LENGTHS AND POSSESSION ORDERS
Although abolishing Section 21 ‘no fault’ evictions is the headline reform in the Renters' Rights Bill, there are other changes to the way tenancies are structured and possession is granted, including:
- All tenancies will become indefinite rolling contracts (including all existing fixed-term tenancies), and tenants will have the right to give two months’ notice from the day they move in.
- If you want to move in or sell your property, you need to give four months' notice, which can’t expire before the tenancy is one year old. After gaining possession, you can’t re-let for a year.
- There’s less red tape for anti-social behaviour evictions, but for rent arrears, your tenant must be at least three months behind, and you must give four weeks' notice before starting legal action.
In short, the Bill aims to balance preventing landlords from bypassing the legal process for evictions while accepting that they should “enjoy robust grounds for possession to take their property back.”
RENT INCREASES AND BIDDING WARS
The chronic shortage of rental homes has led to fierce bidding wars and surging rents, which has boosted income for landlords but has been undeniably frustrating for tenants.
The Renters’ Rights Bill aims to get some kind of rein on the situation (perhaps idealistically), and these are the main points:
- Landlords and letting agents will be forbidden from encouraging, inviting or accepting bidding wars, and the rent agreed will not be able to exceed the advertised price.
- Rent increases will be capped at once per year and must stay within market rates, with tenants receiving two months' notice of any proposed increase.
- Tenants will be able to challenge rent increases through a tribunal that can either maintain or reduce the rent, and the increase won’t take effect until the tribunal makes its decision.
As it's impossible to stop multiple bids on a property from tenants determined to find a home, the law may simply force asking rents up, with landlords inviting lower offers to avoid breaching the rules. Only time will tell.
NEW HOUSING STANDARDS AND SAFETY LAWS
The Renters’ Rights Bill will introduce higher safety and quality standards to the private rental sector, and here's what we know so far:
- The Decent Homes Standard for social housing will expand to ensure all private rental homes offer a reasonable level of modernity, thermal comfort, and repair. Around 80% already do.
- Awaab’s Law will require landlords to address serious health hazards like dampness and mould within specific and strictly enforced timeframes.
- Full details of these measures will be set out after a consultation, but for responsible landlords who take good care of their properties, there's probably little to worry about.
If you’re unsure whether your rental property will make the grade, call us on 0151 280 4047 for a chat about any actions you need to take and how we can help you be ready on time.
TENANTS’ RIGHTS AND PROTECTIONS
The Renters' Rights Bill strengthens tenants' rights in several areas, with an emphasis on protection, flexibility, and eligibility, including:
- Tenants requesting consent for pets. While you won’t be allowed to turn them down unreasonably, tenants will be expected to pay for pet insurance if you require it.
- A ban on excluding tenants with children or receiving benefits, but you’ll still be able to consider income, affordability, credit status, references, and rent protection eligibility.
- Tenants will have the right to challenge unfair practices more easily through a new Private Rented Sector Landlord Ombudsman (also called the Landlord Redress Scheme in the Bill).
This part of the Bill is fairly uncontroversial. There are protections in place to give you peace of mind over who you rent your property to, while tenants are given more options for a home.
REVISED RULES AND FINES FOR LANDLORDS
Although the Renters' Rights Bill includes hefty penalties for non-compliant landlords, it also aims to resolve disputes faster and without legal action. Key points include:
- Almost every breach comes with a £7,000 fine for landlords, rising to £40,000 for some repeat offences and even criminal prosecution in the most serious cases.
- All landlords will need to sign up to the new Landlord Redress Scheme before they market their property, with fines for failing to join or follow its decisions.
- You’ll also need to register your properties on the new Private Rental Sector Database. Without joining, you won’t be able to get a possession order, and you could be fined or prosecuted.
- Local authorities will be given more enforcement powers, including strengthened Rent Repayment Orders up to two years of rent paid while a landlord was in breach of the rules.
The fines can soon mount up, and poor knowledge of the law won’t be an acceptable defence. So, unless you have a managing agent looking out for you, please start checking now that your house is in order.
Are you ready for the Renters’ Rights Bill?
We’re entering a new era of stricter landlord responsibilities, so if you're unsure how the Bill affects your rental property, call us on 0151 280 4047 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. for some expert advice and support.
Working with a vigilant and prepared managing agent is more valuable than ever to adapt to these reforms quickly, and we'd love to show you how we keep you protected, profitable, and penalty-free.
