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14 October 2024
Note: Articles on the Renters’ Rights Bill will be continuously updated as details emerge
There’s been much media coverage over the past few months and years in anticipation of the coming changes to the residential letting rules. First, through the period of the Conservative Government and its Renters (Reform) Bill, which never became law, then under the new Labour Government with its Renters Rights Bill, which was published on 11 September 2024. That’s the one we are concerned with here.
Given the speed with which the new Government wish to implement reforms to the private rented sector, much of the material set out in the previous Bill has been used as a basis for the new Bill, with several crucial additions.
The Bill had its second reading on 9 October and will now pass on to the Committee Stage, which will look at the Bill clause by clause. This stage is due to be completed by 28 November.
There were no amendments brought forward at the second reading so little to report. The House debate was sparsely attended, given the importance of the Bill, but allowance must be made for the now smaller number of Conservative MPs.
Secretary of State, Angela Rayner, opened the debate for the Government, the Shadow Secretary, Kemi Badenoch, replied, and the debate was closed by the Housing Minister, Matthew Pennycook.
MPs made speeches about different aspects of the Bill throughout the debate, and while most were supportive of its measures, Kemi Badenoch was the stand-out objector. Predicting the Bill “will not work” and will “break” the rental market she cited the Scottish experience, (research by Indigo House and the Scottish Housing Network), to back her claims.
Badenoch admitted the Conservative Bill was also flawed, but had been delayed because of this, and argued “you cannot buck the market” and that this Labour Bill would “act as a powerful disincentive to landlords” and would “reduce supply.”
In the light of the Government’s commanding majority, it is anticipated that the Bill will go through Parliament and become law by spring/summer 2025 largely unchanged, though there will inevitably be some changes, which we will follow here as they occur.
It must be said that some of the reforms in the Renters’ Rights Bill will cause landlords concern. Undoubtedly it gives tenants greater rights and security. Landlords and agents will need to use proper planning and diligent tenancy management to cope with these measures. The point of this article is to identify the key issues and allay some of the fears.
A major change is the abolition of the Section 21 “no-explanation” eviction process. We must now rely solely on Section 8 for evictions. That’s for rent arrears, breaching other tenancy terms or exhibiting anti-social behaviour.
It must be said that by far most residential tenancies are problem free. The tenant pays rent on time, looks after the property and leaves by giving notice. But there are a minority of tenancies that, for one reason or another, go wrong, and landlords have no choice but to seek possession.
It also has to be acknowledged that there is a small proportion of rogue landlords in the private rented sector and that a substantial proportion of rental housing, around 25% according to the English Housing Survey, is below acceptable safety and energy efficiency standards.
The grounds for possession are a safeguard for the many issues that can go wrong and are there to assist landlords in achieving the successful eviction of a problem tenant.
In all these cases the key to a successful eviction is having sufficient documentary evidence to prove your case to the court. This will be ever more important under the new rules. This article is designed to help with that.
One major concern for landlords has been the backlog of court cases causing delays in getting access to justice. But if the new Government is true to its word, this situation should improve dramatically with coming court reforms.
Housing Minister, Matthew Pennycook, has pledged that the Government will invest in additional court capacity to manage the increased demand expected once Section 21 is banned.
The grounds for possession are a safeguard for the many issues that can go wrong and are there to assist landlords in achieving a successful eviction of a problem tenant.
In all these cases the key to a successful eviction is having sufficient documentary evidence to prove your case to the court. This will be ever more important under the new rules. This article is designed to help with that.
One major concern for landlords has been the backlog of court cases causing delays in getting access to justice. But if the new Government is true to its word, this situation should improve dramatically with coming court reforms.
Housing Minister, Matthew Pennycook, has pledged that the Government will invest in additional court capacity to manage the increased demand expected once Section 21 is banned.
“We will invest in additional court and tribunal capacity to handle any extra hearings generated by these reforms. Additionally, a new digital system for possession claims is being developed to streamline the process, making it quicker, clearer, and more reliable for landlords and tenants alike.”
- Housing Minister, Matthew Pennycook
In this guide, we’ll briefly summarise the key provisions in the Renters’ Rights Bill before looking at the implications for landlords and how you can best navigate the changes.
Note: This is a guide, not advice and applies primarily to England. The published Bill is a first draft and subject to change as it progresses through Parliament. Seek professional advice before making any decisions.
We cover the Bill in more detail in our article, What does Labour’s Renters’ Rights Bill mean for landlords?. To summarise, the Renters’ Rights Bill will introduce:
The Renters’ Rights Bill is likely to have a significant impact on both landlords and tenants. While it is aimed at giving tenants greater security, some measures such as the abolition of Section 21 may cause more landlords to consider selling. Landlords will certainly need to make sure they are carrying out thorough tenant referencing and that their tenancy agreements are robust. And some landlords may need to make improvements to their properties. But this is all best practice and what good landlords should be doing anyway.
Housing minister Matthew Pennycook has committed to engaging with landlord and tenant groups as the Bill progresses to make sure everyone is prepared for the changes.
Here, we’ll explore the implications of the new Bill for landlords.
Abolition of Section 21. This is perhaps the biggest change. It means landlords can only end tenancies in specific circumstances using the new grounds for possession under Section 8 of the Housing Act 1988.
Tenants will benefit from a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict them to move in or sell the property. Landlords will need to provide four months’ notice (previously two months) when using these grounds, giving tenants time to find a new home. When in rent arrears tenants will enjoy increased protection as the mandatory threshold for eviction is increased to three months’ arrears from two months under the present AST.
To regain possession, landlords will need to serve notice in the prescribed form, giving at least the required notice period to the tenant. Under Section 8, if a tenant does not leave, the landlord will need to go to court and convince a judge to issue a possession order by providing sufficient evidence that the chosen ground or grounds apply.
Factual evidence is vital as anecdotal evidence will not stand up in court. For example, in the case of rent arrears or persistent late paying the landlord might provide a schedule of payments and missed payments over a period, bank statements showing when payments were made and when they have been missed, copies of correspondence or diary entries following phone contacts, emails and letters reminding the tenant when payments are due and when they were missed, etc.
Sale or re-occupation. Landlords will be required to show evidence that relying on these grounds is genuine, for example by providing evidence that an estate agent is engaged. There could also be penalties if the sale is not followed through. In both cases eviction is not possible during the first 12 months of the tenancy and thereafter there is a four months’ notice period, to allow the tenant time to re-locate.
The grounds for possession. There will be 25 mandatory grounds where a judge cannot refuse a possession order when the ground is proven, and 11 discretionary grounds where the judge can decide whether to issue an order. If landlords feel confident presenting their case in court, they can appear in person (litigant in person) or they can use the services of an eviction specialist. See Schedule 1 of the Bill in conjunction with Schedule 2 of the Housing Act 1988 for a full list of the grounds for possession, with the new notice periods etc.
Unlike previously with Section 21, Section 8 allows claimants to attach a money order to cover rent arrears. This means that the evicted tenant could also be given a county court judgement (CCJ) for any arrears claimed.
Market rents. Section 13 of the 1988 Act (increases of rent) is to be amended in accordance with the new rules. The Bill says the Government does not intend to impose rent controls, and nothing in the Bill restricts landlords from raising rents in line with market prices. With the new system, all private rented sector increases will be made via the statutory ‘Section 13’ process, as amended. This requires a landlord to complete a simple form, which will be published on GOV.UK, and serve this on the tenant.
If the tenant accepts the proposed rent increase, they simply need to pay the new amount on the next rent day. A tenant can dispute the increase by applying to the First-tier Tribunal, if they think it is above market level. This must be before the starting date of the proposed new rent and tenants should notify their landlord that they are doing so. The Bill makes changes to the tribunal system to support tenants in challenging unreasonable rent increases.
Awaab’s Law. The Bill extends Awaab’s Law and makes clear legal expectations about timeframes within which landlords must take action to make homes safe where they contain serious hazards, such as damp and condensation. As far as landlords and agents are concerned the emphasis should be on making sure that the property is free from serious defects, carrying out regular inspections and risk assessments.
Tenants’ rights to request a pet are to be strengthened. When considering the request to accept a pet in the property landlords and agents should be mindful of the suitability of the pet for the property type, including the rights of neighbours, whether the pet comes with references, say from a vet to confirm injections / behaviour etc, and whether insurance cover is available. Landlords still have a right to refuse if the pet does not pass these basic tests. See our article on renting to tenants with pets and Total Landlord’s pet damage protection plan, designed for renting to tenants with pets, for further information.
Tenant checks. Rigorous checks when selecting and verifying new tenants are an important part of tenancy management for landlords and agents. Credit checks and referencing are vital if landlords are to avoid taking on a problem tenant.
Grounds for possession – Renters’ Rights Bill – Schedule 2 Housing Act 1988 and Schedule 1 Renters Rights’ Bill September 2024.
This is a summary of those grounds for possession set out in the Bill that are applicable to private landlords
For more detail see the Government’s guide to the Bill and the Bill itself in conjunction with the Housing Act 1988 as amended.
Mandatory grounds
Many of these rule changes will make little difference to the way responsible landlords operate at present. However, there is to be a general tightening-up of the rules on the conditions in the property and in the ways in which tenants are treated. This includes in terms of discrimination, rent levels and increases, allowing children, benefit tenants and pets where appropriate, and county court oversight of all evictions.
The new Bill should hold no fears for responsible landlords and agents who take a pro-active approach, provide safe, warm and secure properties and who treat tenants fairly.
Our media partner, LandlordZONE, offers exclusive insights and breaking news on the private rented sector. Keep up to date with everything you need to know by subscribing to LandlordZONE, the UK’s largest online landlord property news website.
You can also visit Total Landlord's Renters’ Rights Bill hub which will be regularly updated as more details emerge.
