In our Autumn 2022 Property Matters article, we advised that the Renters Reform White Paper was published with proposals affecting landlords and tenants. Now, with the bill finally published, we can provide an overview of what it may mean for the future. The outlook is positive and the message has to be keep calm and carry on.
Back in 2019, during the late Queen’s speech at the opening of Parliament, she stated plans to remove section 21(no fault evictions) as well as assured shorthold tenancies within the private rented sector.
In July 2019 a consultation, was launched. This resulted in the White Paper which was published in June 2022 and the Renters (Reform) Bill was finally laid before Parliament in May 2023.
The bill is currently under scrutiny and is pending a second reading in the House of Commons, once they have scrutinized the bill and feel no further changes or amendments are required, it will be passed to the House of Lords, and possible further amendments before receiving Royal Assent.
As you can see it has already been a lengthy process to date. Coronavirus played a big part in the delay. At least there is now a clearer understanding of the direction the legislation is likely to be heading. Whilst we are still quite a way from the bill becoming legislation, the Government will want to get this legislation passed before the next election.
Tenancies
Assured shorthold tenancies, will be a thing of the past. There will be no fixed term or renewal tenancies as they will be periodic tenancies.
There will be a transition period known as the extended application date.
If an existing fixed term becomes periodic before the extended application date deadline then that will be the extended application date for that tenancy. The extended application date deadline will be set by regulation and this will be the date after which all remaining fixed terms will convert to periodic tenancies.
Periodic tenancies will be a major concern for landlords of student let properties although there is already significant pressure for student lets to be an exception to periodic only tenancies.
Rent Increases
All rent increase clauses will be removed and for existing contractual periodic tenancies the rent increase clause will no longer be enforceable from the transitional date.
Rents can still be increased by serving a section 13 notice though with two months’ notice to your tenant, no more often than once every 12 months.
Loss of section 21’s, with proposed strengthening section 8 grounds for possession.
The bill proposes more grounds for a landlord to obtain possession. There are currently 20 grounds, for possession. The bill suggests an additional 11 grounds with other grounds amended. Many of these new grounds are for social landlords. Notice periods have been increased for the rent arrears grounds to four weeks. The anti-social behavior ground 7a is now immediate like Ground 14.
The holiday let ground has been removed which will be a blow to some landlords who offer “winter lets”.
Pets
Just like now the tenant must make a written request to be ablet to keep a pet. The landlord would have to either accept or refuse the request, in writing within 42 days and consent must not be unreasonably withheld.
The landlord can request the tenant maintain insurance that covers the risk of pet damage during the tenancy or, if the landlord takes out insurance, the tenant must pay the landlords
reasonable cost for maintaining the insurance. The landlord must give the tenant a copy of the insurance policy and inform them if there is an excess amount they could be liable for.
What has not been included in the Renters (Reform) Bill
The White Paper had mentioned that they would also be looking at introducing a Decent Homes Standard by 2030, ensuring every property is deemed safe for all tenants to live in.
Introducing a new property portal for both landlords and tenants to have access to, having a single ombudsman to deal with disputes between landlords and tenants, as well as
lifetime security deposits.
It also mentioned not being able to have a blanket ban for families with children or those in receipt of housing benefits or universal credit
Whilst these have not been mentioned in the bill, it can be expected they can be either added to the Renters (Reform) Bill at a later date or the bill may allow for further regulations to be made in the future to bring these elements into force.