The Renters’ Rights Bill is currently progressing through the House of Lords and is anticipated to become law as early as April or May 2025.
Once enacted, the draft legislation will be referred to as the Renters’ Rights Act and will retrospectively apply to existing and new tenancies. In this article we discuss how crucial it is for all landlords to familiarise themselves with the new changes and how these could affect their tenancy agreements.
The headline of the Renters’ Rights Bill is the end of section 21 notices, more commonly known as 'no-fault' evictions. A 'no-fault' eviction is one where, provided the fixed term has expired, the landlord can terminate the tenancy without providing good reason.
The draft legislation aims to abolish section 21 'no-fault' evictions, providing tenants with enhanced security of tenure. Landlords will only be able to terminate their tenancies by serving a section 8 notice, relying on one or more of the grounds set out in schedule 2 of the Housing Act 1988 such as:
It's hoped that new law will also benefit landlords, by allowing for:
Next steps for landlords:
Once in force, the Renters’ Rights Act will abolish fixed-term tenancies and all tenancies will become periodic, meaning they continue indefinitely on a rolling basis until either party terminates the agreement.
It's currently proposed that all fixed-term tenancies will immediately convert into periodic tenancies on the date the new law is implemented. The Renters’ Rights Bill refers to these new tenancies as section 4A assured tenancies.
Under the new regime, tenants will be able to give two months’ notice to leave at any time, creating a more flexible and tenant-friendly approach, whilst a landlord will be required to satisfy one of the grounds under schedule 2 of the Housing Act 1988 (see above).
Any landlords who 'purport' to grant a fixed-term tenancy could be subject to sanctions including a fine, so it's important that landlords ensure that all future tenancy agreements do not include a fixed term.
The Renters’ Rights Bill proposes to standardise and regulate the rent increase process by limiting landlords to one rental increase per annum and banning rent review clauses. Landlords will only be able to increase the rent under the statutory procedure, by serving a section 13 notice providing their tenants with at least two months’ notice before the rent increase takes effect.
Furthermore, any rent increase must reflect market-rate and tenants will be able to challenge any rent increases via the First-tier Tribunal which will be required to determine whether the new rent is reflective of the open market rent.
Crucially any findings of the tribunal will no longer be back-dated and as such any rent increase, whether approved or reduced, will take effect from the next payment date following the tribunal's decision, rather than the intended date. It's therefore anticipated that all tenants will look to challenge any increase to delay the implementation of the increased rent.
In relation to the social housing sector, rent increases are already regulated, however, please make sure all existing policies are checked and updated if necessary.
Next steps for landlords:
The Renters’ Rights Bill proposes increased flexibility for tenants by requiring landlords to reasonably consider all tenant requests to keep pets. Blanket bans will no longer be enforceable and landlords must provide reasonable grounds for refusal – for example, the landlord holds the property under a lease, the terms of which prohibit pets.
As currently drafted, the proposed legislation doesn't provide any further guidance as to what reasonable grounds for refusal might be and it's likely to be up to the county courts to decide this on a case by case basis.
Focusing on the positives, allowing pets could encourage:
However, allowing pets may also increase:
For the social housing sector, many landlords already allow pets, nevertheless policies and tenancy agreements should be revised for consistency with the new and incoming regulations.
Next steps for landlords:
The Renters’ Rights Bill aims to make renting more inclusive and fairer for all, to ensure that tenants are treated equally. For this reason, it will become illegal to discriminate against prospective tenants regardless of circumstance, for example tenants on benefits or with children.
Landlords will still be able to undertake affordability checks but will not be able to refuse prospective tenants based on the fact they receive benefits.
The social housing sector doesn't tend to enforce blanket bans on certain characteristics, however, policies will still need to be reviewed and/or revised.
Next steps for landlords:
The Renters’ Rights Bill proposes to make the Decent Homes Standard compulsory for all landlords meaning that tenancy agreements and subsequent repairing obligations will need to be reviewed and potentially revised.
Although many private sector landlords are already compliant with the Decent Homes Standard, its introduction will force landlords of sub-standard properties to immediately review and carry out works to improve their properties.
Even though the social housing sector is already subject to these rules, additional compliance may need to be implemented. The minimum standard includes that the property must:
Next steps for landlords:
It's important that landlords understand the changes which will affect existing and new residential tenancies once the Renters’ Rights Act comes into force. If you need assistance in this respect please contact Avika Korrin, Emma Hindon or the property disputes team at Ashfords.
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