Property To Let – a look inside the Renters (Reform) Bill

The rental market has been changing over recent years, with more protection for both landlord and tenant in a tenancy agreement. The Renters Reform Bill 2023 seeks to make some major changes to current legislation - no less significant than the abolition of no fault evictions. The amendment is designed to drive out short-term landlords and increase the percentage of longer-term investors to the sector; it is hoped this will bring both assurance and clarity for tenants.

No fault evictions

The Renters (Reform) Bill 2022-23 was introduced to Parliament earlier this year. Its aim is to abolish ‘no fault’ evictions in England. The debate on its second reading on its way to become law took place in October. The proposed legislation covers Assured Shorthold Tenancies (ASTs), which were introduced by the Housing Act 1988. Section 21 of the 1988 Act enables private landlords to regain possession of their properties, once the fixed term has ended and subject to giving a minimum of two months written notice, without having to establish fault on the part of the tenant.

A lack of security

There’s evidence that this lack of security has led to tenants feeling constrained when it comes to enforcing some of their basic rights of tenancy – such as asking for repairs to be carried out, or to fear challenging unreasonable rent increases. The foreword to the government’s white paper A fairer private rented sector observed that: ‘Far too many tenants are living in damp, dangerous, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.’

Charities and local housing authorities argue no fault evictions increase the likelihood of homelessness, but landlords dispute this. They insist homeless applications from people living in the sector are linked more closely to people falling behind with their rental payments than landlords using section 21. Currently there’s no legal requirement for private landlords in England to belong to a redress scheme, so tenants are often left to negotiate with their landlords and enforce their rights through the courts.

The new bill would abolish assured shorthold tenancies and consequently the section 21 ‘no fault’ evictions. Instead, PRS (Private Rented Sector) tenancies will be deemed ‘monthly periodic assured tenancies’ with no end date. The government has also said that the abolition will not happen until reforms to the justice system have been put in place. Among the reforms, the grounds on which landlords can seek to repossess properties would be amended and strengthened. The aim is to make it easier for landlords to repossess properties, where tenants carry out anti-social behaviour or repeatedly build up rent arrears – where a definite ‘fault’ can be established. Other reasons the landlord would be able to regain possession include the need to sell the property with the benefit of vacant possession and also in situations where the landlord or a direct family member wishes to use the property as their principal residence.

There will also be a process for introducing annual rent increases, and tribunals would determine market rents – if a tenant appeals against a landlord’s proposed increase as being unreasonable. A new independent Ombudsman would be established for the private rented sector and a new Property Portal would be established, so that tenants, landlords and local councils can access this information. Landlords would also be required to consider tenants’ requests to keep a pet and wouldn’t be able to refuse a request unreasonably. In these cases, landlords would be able to require pet insurance, to cover any damage pets may cause.

If you would like to find out more about the Renters (Reform) Bill 2022-23, or think you may be affected by the changes, then get in touch with us today.