Renters Reform Bill is finally here
All About the Renters (Reform) Bill. What Is It, and What Could it Mean to YOU as a Landlord?
Introduced to Parliament on 17th May, 2023, change – yes, yet more change – is on the way for landlords.
And, it’s a big one. It could be the most significant development in the private rented sector in England for over 30 years.
These changes aren’t yet on the statute books. But, as a vital part of the government’s “levelling up” agenda, it all looks highly likely.
You may already have heard of the Renters (Reform) Bill, so we’ve summarised everything you need to know in this easy-to-read blog to keep you up to speed.
What It’s All About?
In brief, the Bill will focus on abolishing so-called no-fault evictions, and on re-shaping the grounds on which you can obtain possession of your property.
The aim is to bring about a “better deal for renters”. You may already consider the legislation surrounding your role as a landlord plenty tough enough, thank you. We recognise your frustration. However, these new plans aren’t necessarily for the myriad league of decent landlords like yourselves.
The Bill targets, if we may say so, those less than legitimate landlords whose properties fail to meet even basic decency standards. Sadly, this “rogue” element may surprise you in its prevalence:
According to gov.uk, nearly a quarter of all UK rented homes in the private rented sector fall into this category: they’re practically uninhabitable due to damp, poor maintenance, etc. And, the government needs things to change.
So, What’s in the Renters (Reform) Bill?
There are FOUR major elements to the Bill. Let’s start with the one that’s been creating the most noise:
Abolition of Section 21 Notice
In brief, the CURRENT legislation under Section 21 allows you to give your tenants two months’ notice to quit after a fixed initial period of six months’ occupancy. Importantly, you do not need to provide them with a reason why. This will be changing.
Should the Bill become law:
- The tenancy will end only if the occupiers choose to leave, or you have a valid reason as defined by new, more robust Section 8 legislation (see below)
- In most cases, the first six months of the tenancy will remain protected for tenants who are not in breach of their agreement
- All new tenancies will move from being Assured Shorthold (AST) to periodic tenancies. There will be no set end date. Any existing ASTs will convert to periodic ones, too
- There will be a caveat regarding re-possession for personal or family reasons.
In response, there are plans to strengthen Section 8. There are several reforms on the cards, but these are the main ones:
Section 8 Reform
- Grounds to re-possess your property in order to sell it – although this will not apply during the first six months of the tenancy.
- Serious, repeated arrears – you may be able to evict a tenant if they are at least two months in arrears three times within a three-year period.
- You and any close family members will be able to move into the property – again, the six-month rule will apply.
- Anti-social behaviour. Eviction notice periods will be lowered, and the government is looking at issuing further guidance to help resolve issues earlier.
Here’s the thing:
With a few exceptions, it looks like you will only be able to gain possession of your property through Section 8 grounds.
And, Section 8 nearly always equates to legal action.
Not to put too fine a point on it:
Legal action always requires you to follow all the processes and steps to the letter of the law. Get something wrong – anything, even a minor detail – and you may have to restart the whole thing. Although you can apply for an accelerated possession order, we hear that landlords are already frustrated by the glitches and bumps in the court possession process.
In the case of rent arrears in particular, whilst you wade your way through the court system, your tenant is most likely not paying any rent at all. It doesn’t take a genius to conclude that no rental income could add up to a whole heap of financial problems.
The Other Parts of the Reform Bill
Be aware of:
- The creation of a new property Ombudsman to settle disputes and relieve pressure on the courts. This means you. All landlords will have to be a part of this scheme.
- A digital Property Portal to keep tenants and landlords up to speed with all their obligations and rights. And, to help local councils to carry out their enforcement duties.
- Implement a statutory right for tenants to request that they bring a pet into the property.
What We Think
All of this could become law by the Spring of 2024.
The government has drawn up these plans to make it easier for landlords to re-possess in cases of rent arrears and anti-social behaviour.
In theory, it should Teflon various nightmare scenarios and smooth the path towards more precise outcomes.
In our view, and also in the opinion of the National Residential Landlords Association, the reforms lack detail. We can’t see much evidence regarding “when” or “how”. Also, “who”: will additional, trained staff be required to deal with the details of these reforms?
Also, as students will now have open-ended tenancies, it may become ferociously hard to make plans around the academic year.
The Brighton Homes Reassurance
Do contact us if you have any queries or concerns about the impact of the Renters (Reform) Bill on your role and obligations as a landlord.
Certainly, owning and renting out properties is more challenging than it used to be.
Nevertheless, put your faith and trust in Brighton Homes to do the right thing on your behalf. We’re confident that we offer the absolute highest service standards and expert advice – and will continue to do so.
For example, we offer a free rental guarantee, as well as legal protection as standard, and included in your management fee. In addition, we focus on sourcing excellent tenants for you.
So, you can rely on us to carry out extensive credit and reference checks. And, we always ask for proof that your potential tenants’ net monthly salary is three times their rental amount (the industry standard is twice the gross amount).
But, here’s something that may surprise you.
We’ve got you covered, and here’s how:
As Section 21 disappears, reinforcing Section 8 will almost certainly result in legal action.
Should you decide to ask your tenants to vacate in favour of a close family member, they may see things differently. As reliable renters, they could raise a dispute, resulting in potentially expensive and time-consuming legal action.
Having already spoken to existing management landlords, this is an area we understand well. Therefore, we fully intend to protect and cover you costs-wise, should a legal disagreement loom into view. Here at Brighton Homes, we put our landlords first, so this is just another way for us to remove as much as possible of the potential stress and hassle associated with the new legislation.
From us, for the time being, our message is:
Keep calm and carry on, and hold fast. Get in touch with the Brighton Homes team if you’d like some guidance. We’re at your service.