The proposals in the Renters (Reform) Bill, which were first set out in the 2022 fairer private rented sector white paper, are intended to implement many of the proposals for improving the private rental sector ("PRS") for renters contained in the Government's 2017 white paper "Fixing our broken housing market". This includes the introduction of minimum standards for housing in the PRS, and the abolition of both the section 21 method of obtaining vacant possession and the assured shorthold tenancy.
Where is the Bill now?
The Bill's first reading was a year ago, in May 2023. It had its first reading in the House of Lords on 1 May 2024, which means that it has started its passage through the Lords. Its provisions will be scrutinised by the Lords after its second reading, but as yet no date has been fixed for this process.
What's in the Bill?
2.1 Abolition of ASTs
Chapter 1 of Part 1 provides that all assured tenancies will be periodic tenancies with rent periods of up to one month. Any terms which try to create a fixed term tenancy will be void. This will mean that assured shorthold tenancies will cease to exist.
Purpose-Built Student Accommodation (PBSA) will be exempt from these changes as long as the provider is registered for Government-approved codes, since these tenancies are not assured. Lettings by PBSA landlords are nonetheless governed by the Protection from Eviction Act 1977.
The Bill also removes section 21 of the Housing Act 1988 which contains the procedure for bringing a tenancy to an end without recourse to the courts, known as 'no fault' evictions. This will mean that assured shorthold tenancies will cease to exist, and will be replaced by periodic assured tenancies.
2.2 Ending a tenancy
Clause 4 introduces new possession grounds to enable landlords to recover vacant possession if they wish to sell their property or move close family members into it, and to provide grounds for landlords to repossess properties where there has been anti-social behaviour or repeat rent arrears.
Tenant groups are concerned that these grounds could be exploited by unscrupulous landlords, whereas landlords are concerned about the costs, delays and uncertainties that are the usual consequences of bringing a court action. Clause 126 requires the Lord Chancellor to assess the operation of the process by which the county court is able to make possession orders for rented property in England, and by which such orders are enforced, before implementing the removal of section 21.
Clause 18 amends section 5 of the Protection from Eviction Act 1977 so that a tenant's notice to quit must be given not less than 2 months before the intended end date of the tenancy, and not within the first 6 months of the tenancy (unless it is a renewal lease).
2.3 Increasing the rent
Clause 7 of the Bill amends section 13 of the Housing Act 1988 so that a private landlord will have to issue a section 13 notice in order to increase the rent. Tenants will be permitted to appeal against a rent increase in the Tribunal. The Tribunal will continue to be able to determine the actual market rent of a property.
2.4 Pets
Under clause 10, tenants will be able to request a pet in the property. Landlords must consider such a request and cannot unreasonably refuse, although they will be able to require pet insurance to cover any damage to their property. Reasonable grounds to refuse would include the landlord's own lease not permitting pets.
2.5 Tenancy deposit protection
Clause 24 ensures that tenancy deposits will continue to be protected as now, notwithstanding the removal of section 8 of the Housing Act 1988, and that compliance with this regime will be required in order for a court to grant a possession order.
2.6 Protection of longer leases
Clause 28 provides that fixed-term tenancies of more than 7 years cannot be assured tenancies. This will mainly affect shared ownership leases, and will mean that landlords will not be able to use section 8 grounds to forfeit the lease if arrears have built up. This is a disproportionate sanction in this situation, and has been campaigned against for some time.
2.7 PRS database
Clause 67 provides for the establishment of a PRS database which will contain the following information:
- Names of residential landlords;
- Details of properties that are within the PRS;
- Residential landlords which have been served with a banning order or penalised for relevant offences.
Landlords will have to register and then keep their details up to date. Enforcement provisions include the service of a rent repayment order.
2.8 Prohibition of discriminatory practices in the PRS
Clause 30 prohibits a landlord from banning or restricting letting PRS properties to people with children. There are a few exceptions such as where this is a proportionate means of achieving a legitimate aim (such as complying with overcrowding regulations) or meeting the requirements of an existing insurance policy.
Clause 31 probits landlords and letting agents from banning or restricting letting PRS properties to people in receipt of benefits, unless this is done to meet the requirements of an existing insurance policy.
The financial penalty for breach is £5000 and, in addition, any clause in breach of these provisions (whether in a letting document or in a new insurance contract) will be void.
2.9 Landlord redress scheme
Chapter 2, clause 56, obliges landlords to join a landlord redress scheme once regulations have been put in place. Such a scheme will provide for the independent investigation and settling of complaints by tenants of residential landlords and their agents.
2.10 Decent Homes Standard
Clause 90 provides that the Government can set Decent Homes Standards for the PRS that will be enforced by local authorities. This concept has historically applied to social housing, and a consultation was carried out in 2022 to gather views about how best to apply it to the PRS. The Government has not yet responded to this consultation so it is uncertain what this new regime would mean in practice.
2.11 Enforcement
Enforcement will include fixed financial penalties and rent repayment orders, and also "naming and shaming" via the new PRS database. In addition, clause 93 provides that where a corporate landlord has committed an offence under the Bill either with the consent or connivance of a director as a result of their neglect then they can be treated as having committed the offence and consequently may be subject to a rent repayment order as well as the company itself.
Much of the onus for enforcement will be placed on local authorities. The Local Government Association has said that although they welcome the Bill, because they consider that it could "deliver a fairer, more secure, and higher quality PRS for both tenants and landlords", they stress that it will be vital for council teams to be properly resourced if they are to meet their new regulatory and enforcement responsibilities under the Bill.
What's next for the Bill?
Tenant groups have been dismayed that the Bill has not yet been enacted but the Government has said that it is committed to introducing the Bill during the current session of Parliament. We will report further if and when it receives Royal Assent.
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