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Report maintenance Renters’ Rights Bill
Well, here we are again, discussing a new bill to reform the private rental market. Since the Renters’ Reform Bill was shelved with the calling of a general election, we’ve been waiting on the new government’s approach to rental reform. The Labour government have now had their ‘first reading’ of the new Renters’ Rights Bill, and a more detailed document was released shortly after. In this article, we will go over some of the big-ticket items within the bill and how they impact the Bristol rental market.
Key Features of the Renters’ Rights Bill:-
With the bill only having its first reading, it still has some way to go before it becomes law. The bill must go through the scrutiny of both the House of Commons and House of Lords (including the committee stages discussing the finer details). We would expect the parliamentary stage to be relatively smooth, given the huge majority held by Labour. We weren’t expecting many new surprises as most parties supported the rental market reform. So, here we are again discussing removing section 21s, fixed-term tenancies and blanket bans, new databases and court reform.
So other than a new name what does the “Renters’ Rights Bill” include? Two of the biggest headliners remain the abolishment of section 21s and fixed-term tenancies: –
Bye-bye to Section 21s
It feels like we’ve been talking about the abolishment of Section 21s forever. The so-called “no-fault” eviction, so it’s no surprise to find it included in the new bill. There will no longer be a 2-stage process (of old vs new tenancies.) Instead, the abolishment of Section 21, will take effect for all tenancies from one set date.
Does this mean a Bristol landlord won’t be able to get their property back? Well yes and no, it depends on the reason. Landlords won’t be able to evict tenants for the sake of it, although our experience suggests this rarely happens anyway. There will be some mandatory and discretionary grounds for a landlord to regain possession of their property. If a tenant wants to remain, then the landlord will have to go through the court process. It is widely felt court reform is needed, there is no indication this will happen before Section 21 is removed.
Mandatory grounds are set to include a landlord or family member wishing to move into the property. As well as the sale of the property (both reasons require 4 months’ notice). It’s worth pointing out that tenants are protected from these grounds for the first 12 months of their new tenancy. We’ll dive deeper into grounds for possession in a future article.
No more fixed-term tenancies
This is a big change for the market. With landlords no longer having the reassurance of a tenant(s) for a minimum term of 6 or 12 months. Effectively this will create an immediate periodic “rolling” tenancy. The key exception here is student HMOs (3 or more sharers). These landlords will still be able to regain possession of their property in preparation for a new student intake. This allows for the cyclical nature of the student market under ‘ground 4a.’ It has left a big question mark over smaller student properties and potential workarounds for those landlords. It’s one we hope to see some change to during the amendment process. We’re members of Propertymark, the leading membership body for property agents. Propertymark are working with the Government to close some of these gaps.
A big concern for some landlords, particularly student landlords, will be the ability for a tenant to give 2 months’ notice at any time. The worry for student landlords will be the increased risk of 2–3-month void period, due to a tenant potentially giving notice for the summer break. For both professional and student landlords, there is still the reassurance that the demand for property typically outstrips the supply. It’s fair to say that a well-maintained property with a good landlord/tenant relationship will have less to worry about. Tenants don’t typically want to move every 2 months if they don’t need to. However, poorly kept properties, with poor relationships may see some tenants looking to upgrade.
What else is in the bill?
As the bill progresses, we will dive deeper into the detail, but here are some key points: –
Rent increases – I object!
Currently, this bill does not propose a rental increase cap. What it does do is allow a tenant to disagree with an increase if they consider it above market conditions. If an agreement cannot be made between landlord and tenant, then it can be referred to a tribunal. The rent increase itself would not become binding until this tribunal has happened. This isn’t actually to dissimilar from now. The main difference is that a tribunal can only enforce the rent increase stated or lower (no longer a higher amount.)
Bidding wars
The published asking rent will be the highest you can accept. This could see a move towards “offers up to” style rental values, potentially causing advertised rental prices to initially bump up.
Blanket bans/discrimination
The Bill looks to make rental properties more accessible to a wider audience. A landlord will not be able to unfairly refuse tenants with children or claiming benefits. Tenants will also have the right to request a pet – so no more blanket pet bans. This will likely be paired with the landlord being able to ask for specific insurance policies or higher deposits for pets.
New rental database
We know, more admin! Landlords will need to be registered on the Private Rented Sector Database. It should help landlords understand their legal obligations, whilst giving tenants a good level of information to make informed decisions. This is going to take some time to set up, and we’re hoping this is something we’ll be able to help our managed landlords with.
Decent Homes Standard
The Decent Home Standard will be applied to the private rental sector. Aiming to increase the standard of rental accommodation and ensure safer homes for tenants.
No more rent in advance
We wanted to pull this one out separately. It’s commonplace for a tenant to offer to pay their rent in advance, where they may not satisfy affordability requirements or for other reasons. Without this financial assurance, it is likely to result in an increased need for guarantors, which can be difficult for international tenants.
So what’s next?
There is a lot to unpack and some of the above could well change, but if you want to read some more information about the bill in all its glory, grab a coffee and click here>
When will it come into force? Well, we can’t be sure yet and elements in the bill around new databases and court reform will likely come in later down the line, however, summer 2025 is the current best guess. The 2nd reading will take place on the 9th of October 2024 – rest assured that we will keep you informed of all the developments.
And, we’ll do our absolute best to help our landlords adapt to the new rental environment. Ultimately there is still a huge demand for rentals in Bristol, and we don’t see this changing anytime soon.
