The Renters (Reform) Bill was introduced into Parliament for its 2nd reading on 17th May 2023 by Michael Gove as Minister for the Department for Levelling Up, Housing and Communities. This is the stage at which the bill is debated before progressing to the Committee stage and so on until it becomes law. According to the government the intention is that the bill will deliver a “fairer, more secure, and higher quality private rented sector for both tenants and landlords”.
Major changes relevant to residential landlords include the proposal to abolish section 21 ‘no-fault’ evictions which is the current preferred and most timely route for gaining possession of a let residential property. The reasoning behind this change is so that tenants will feel empowered to challenge landlords over poor housing conditions without the fear of eviction.
Other significant changes include the abolition of AST or fixed term tenancies, making periodic tenancies (ie. month to month) as standard and prohibiting the inclusion of rent review clauses in tenancy agreements. Instead, a statutory regime will apply so that rent cannot be increased more frequently than once a year and on two months’ notice. The tenant may either accept this or challenge it at tribunal.
Although the bill does not introduce the ‘Decent Homes Standard’ currently applicable to the social sector it does introduce a private sector rental database or “property portal” with the provision for compulsory membership of a landlord redress scheme or Ombudsman to help avoid disputes going to court. The Ombudsman will have powers to compel landlords to remedy issues and a right to impose fines of up to £25,000 for non-compliance.
Although primarily strengthening tenant rights, the bill amends several section 8 grounds for possession, including introducing a wider range of provisions that a court or Ombudsman should consider around anti-social behaviour. It also clarifies other grounds for eviction including for repeated rent arrears, the sale of the property or for its use for agricultural workers or close relatives.
The private rented sector has seen unprecedented growth in recent years with an estimated 11 million private renters and 2.3 million landlords in England. The intention of the reform bill is to ensure that tenants not only have a greater degree of protection and home security, but that rental standards are upheld. The government, however, must be careful not to go too far in disincentivising landlords in the private rented sector in order to ensure a continued supply of much needed good quality rental homes.