The UK rental market is set for major changes with the introduction of the Renters Rights Bill.
This legislation aims to improve security and fairness for tenants while ensuring landlords can still effectively manage their properties.
Here’s what both landlords and tenants need to know from the key elements of the Renters Rights Bill expected in the Summer.
We also explain what Landlords should be doing next to ensure they are prepared for these significant changes to the Private Rental Sector.
Key Changes Under the Renters Rights Bill
1. Abolishing Section 21 “No-Fault” Evictions
Currently, landlords can end a tenancy without giving a reason under Section 21. The new bill will remove this option, meaning landlords will need to regain possession of their property under updated section 8 grounds. These grounds will include “landlord circumstance grounds” where the landlord wishes to sell or potentially move back into the property.
What this means:
- For landlords: Stronger requirements for repossession, but improved grounds to remove tenants for anti-social behaviour or rent arrears.
- For tenants: Greater security and protection from unfair evictions.
2. Moving to a Single System of Periodic Tenancies
The bill will eliminate fixed-term tenancies, replacing them with a single system where tenants can leave with two months’ notice, and landlords need a legitimate reason to end a tenancy.
What this means:
- For landlords: Less certainty on tenancy length, but flexibility to regain possession under fair conditions.
- For tenants: More freedom to move without being tied into long contracts and an initial protected period of 12 months before a landlord can sell or move back into the property with 4 months notice provided.
3. Strengthening Landlord Compliance and Tenant Rights
A new Private Rented Sector Landlord Ombudsman will be introduced, alongside a national Rental Sector Database to improve transparency, understanding of legal obligations and demonstrate compliance
What this means:
- For landlords: Increased accountability, but easier access to support and legislation guidance
- For tenants: Easier access to dispute resolution and better visibility of their landlord’s compliance.
4. Restrictions on Blanket Bans (e.g., No DSS, No Pets)
Landlords will no longer be able to implement outright bans on tenants receiving benefits or owning pets. Landlords must not “unreasonably” refuse the request of a pet, though they can request insurance to cover potential pet damage.
What this means:
- For landlords: More inclusive renting, with protections in place for potential risks.
- For tenants: Improved access to rental properties without the burden of blanket restrictions.
5. Apply a Decent Homes Standard and “Awaabs Law” to the Private Rental Sector
Landlords and managing agents will need to ensure rental homes meet a minimum standard in regards to condition and ensure any damp or mould issues are investigated and rectified.
What this means:
- For landlords: Provides clear guidance on expectations when renting a home.
- For tenants: Gives renters safer, better value homes and remove poor quality homes in communities.
6. End the Practice of Rental Bidding
Landlords and managing agents will no longer be able to accept offers over the advertised asking price.
What this means:
- For landlords: The positive of having no rent cap and the freedom to set the desired asking price.
- For tenants: Provides a fairer process when it comes to applying for a rental home based on suitability rather than rent offered.
What Should You Do Next?
Landlords:
- Ensure you fully understand the new legal requirements and update your tenancy agreements accordingly.
- Consider fully managed services to handle compliance, rent collection, and tenant disputes efficiently. To find out more about Sowerbys’ Fully Managed Service click here.
- Explore legal and rent protection insurance to safeguard your investment against arrears and legal costs.
Tenants:
- Stay informed about your new rights and responsibilities.
- Communicate openly with your landlord or letting agent if you have concerns about changes to your tenancy.
The Renters (Reform) Bill brings opportunities for a fairer, more transparent rental market. Whether you’re a landlord or a tenant, preparation is key. As a current managed landlord to can relax knowing all these updates in addition to the array of other legislation will be managed by Sowerbys on your behalf.
Need expert guidance?
Contact Sowerbys' Lettings team today to ensure you’re ready for these changes.