%20xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.jpg)
Amongst the 35 bills that Labour plans to get through Parliament, the King’s Speech on 17 July revealed a new Renters’ Rights Bill. Part of the state opening of Parliament ceremony, the speech marked the start of the parliamentary year and set out the new Labour government's priorities for the months ahead, following the party's landslide General Election victory on 4 July 2024.
During his speech, the King made only a brief reference to the private rented sector. He said his Government would give “greater rights and protections to people renting their homes, including ending 'no fault' evictions and reforming grounds for possession” through a new Renters’ Rights Bill.”
Both the name of the bill and the content are not dissimilar to Michael Gove’s Renters (Reform) Bill that fell at the final hurdle, failing to make it to the statute book before Parliament was prorogued on 25 May after the General Election was announced.
“It is mostly a recycled Renters (Reform) Bill with some predictable amendments that the Government tried to get through as amendments when in opposition."
- Sean Hooker, Head of Redress at the Property Redress Scheme
Here, we’ll explore what the new bill means for landlords.
Labour’s manifesto was thin on detail about their plans for the private rented sector, but they did promise that they would ‘immediately’ abolish Section 21 ‘no fault’ evictions and ‘overhaul’ the regulation of the private rented sector. The Renters’ Rights Bill, they now explain in the notes that accompany the King’s speech, “delivers our manifesto commitment to transform the experience of private renting, including by ending Section 21 ‘no fault’ evictions – we will take action where the previous Government has failed. The Bill will give renters much greater security and stability so they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.”
While the Government does also make the point that landlords must enjoy robust grounds for possession where there is good reason to take their property back, they state that they are “determined to level decisively the playing field between landlord and tenant by providing renters with greater security, rights and protections and cracking down on the minority of unscrupulous landlords who exploit, mistreat or discriminate against tenants with bad practices such as unfair rent increases intended to force tenants out, and pitting renters against each other in bidding wars.”
Many of the measures in the Renters’ Rights Bill, which the Government says will ‘overhaul’ the private rented sector, were included in the original Renters (Reform) Bill. Here, we explore the components of the Bill and what they mean for landlords.
This was one of the most contentious measures contained within the original Bill. Aimed at ‘removing the threat of arbitrary evictions and increasing tenant security and stability’, new clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to. While this was in the original Renters (Reform) Bill – see ‘What’s happening to evictions and Section 21?’ the detail on the new grounds remains to be seen.
In his blog, ‘Not Renters Reform but Renter’s Rights’, David Smith, law partner at JMW specialising in residential property rights, says:
“All of the same problems will arise as before. I note that the briefing also states that there will be suitable additional grounds for possession to protect landlord’s ability to reclaim property when needed. However, I do not expect there to be a ground for repeated rent arrears which was in the previous Bill and I worry about whether a student possession ground will exist. I would also anticipate some longer notice periods for some grounds, especially a ground for possession to allow for sale.”
- David Smith, Partner at JMW
Chris Norris, Policy Director for the National Residential Landlords Association, said it is vital that whatever replaces Section 21 works for both landlords and tenants.
“The system that replaces Section 21 needs to be fair, workable and sustainable for both responsible landlords and renters. That means fixing a broken justice system which too often fails those reliant upon it.
“The Housing Minister has rightly noted that landlords need the courts to operate quickly where they have a good reason to repossess a property. This includes cases of tenant anti-social behaviour and serious rent arrears, which currently take almost seven months to process. This is far too long.
“Tenants are no better served by delays, which increase hardship, stress, and uncertainty. We need action from the Government, alongside the Bill, to ensure all are able to access justice in a timely fashion when they need to do so.”
- Chris Norris, Policy Director at the NRLA
Talking to LandlordZONE Paul Shamplina added:
“Rayner’s acknowledgment of the need to address inefficiencies within the court system highlights the need for a balanced approach that considers both the rights of renters and the practicalities faced by landlords. Nevertheless, given Labour's pledge, we now anticipate a further surge in the number of landlords serving Section 21 notices in the coming months.
"Landlords are likely to act pre-emptively to protect their interests before any legislative changes take effect.
"The primary concern for landlords is that without the ability to use Section 21, they might face significant challenges in managing problematic tenancies effectively.
"The uncertainty surrounding the timing and implementation of these changes is likely to drive more landlords to take action now, rather than risk being unable to address issues swiftly in the future.”
- Paul Shamplina, founder of Landlord Action
This measure aims to tackle rent increases designed to force tenants out ‘by the back door’. There has been much speculation about Labour introducing a form of rent control, but it seems that this is unfounded. In our recent podcast, ‘Should landlords be worried about a Labour government?’, Paul Shamplina, founder of Landlord Action and Chief Commercial Officer at Total Landlord, said that bringing in rent caps as a way to control the rental market would ‘scare the life out of landlords’ and cause many to exit the sector. He also pointed out that Angela Rayner, the new housing secretary, has said Labour would only bring in mandatory annual rent reviews as the mechanism by which landlords could raise their rents, with increases coupled to inflation and/or the base interest rate.
David Smith suggests that this is another way of expressing a provision that was in the previous Bill, which required that landlords always had to put rent increases on a Section 13 notice and allowed tenants to challenge them in the First-Tier Tribunal as being above market level. See our article, ‘Are tenants being given more power to challenge rent rises?’ which provides more detail on the original proposals.
This is a new measure, which was not in Labour’s manifesto but was widely referred to in the media before the King’s speech following comments by both Angela Rayner and Kier Starmer. This measure is aimed at strengthening tenants’ rights and protections. There is a similar law prohibiting rental bidding that came into force in 2021 in New Zealand. The New Zealand law states:
“Landlords cannot invite or encourage prospective tenants to pay more rent for a property than is stated in the advertisement or offer. This means they cannot organise an auction over a rental property, or offer to give the rental to a tenant if they agree to pay more for it.
Prospective tenants or any other person can still voluntarily offer to pay more than the stated amount of rent and a landlord may accept this offer.”
David Smith has covered this in more detail in his blog and as reported by LandlordZONE, arguing that it would be very difficult to enforce.
Landlords would need to consider a tenant’s right to request a pet and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed. This was in the original Renters (Reform) Bill – see ‘Will landlords have to accept pets soon?’
This is to make sure homes are safe, secure and hazard free, ‘tackling the blight of poor-quality homes’. While this was omitted from the Renters (Reform) Bill, the previous government had committed to a Decent Homes Standard, albeit with an extended implementation period ‘to avoid the cost of any improvements being passed on to tenants’. Find out more in our article, 'What's the Decent Homes Standard?'.
This measure involves setting clear legal expectations about the timeframes within which landlords in the private rented sector must make homes safe where they contain serious hazards such as damp and mould. This was referenced in Labour’s manifesto so was expected. For more information read David Smith’s blog, ‘What is Awaab’s law?’
‘Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most.’
This is aimed at supporting quicker and cheaper resolution when there are disputes – preventing them escalating to costly court proceedings by providing fair, impartial and binding resolution, to both landlords and tenants and reducing the need to go to court. This was included in the previous Renters (Reform) Bill and you can read more in our article, ‘How will the new ombudsman work?’
Sean Hooker, Head of Redress at the Property Redress Scheme, supports this measure. He says:
“I am pleased to see the emphasis on dispute resolution has been continued for the proposed new bill, however we again await the detail on how it will work. We already have effective redress for complaints against agents but the challenge of extending the same benefits to cover complaints against landlords, will need to be closely scrutinised.
I will also be interested to see, how mediation can be used to resolve many issues at a very early stage. This can be useful not only for settling issues such as repairs and maintenance during a tenancy, but also for when the tenant and landlord need help with arrears or possession matters before these escalate to legal action.”
- Sean Hooker, Head of Redress at the Property Redress Scheme
This was also contained within Michael Gove’s Bill and you can find more details on the original proposals in our article, 'Are no DSS blanket bans being outlawed?'.
‘New investigatory powers will make it easier for councils to identify and fine unscrupulous landlords and drive bad actors out of the sector.’ Some of this was also featured in the original Renters (Reform) Bill – find out more in our article, ‘What are the new powers being given to local councils?’ and our article on Rent Repayment Orders, which includes information on changes proposed by the original bill.
Summing up the proposals for a new Renters’ Rights Bill, the details of which can be found on page 69 of the briefing document which accompanies the King’s speech, David Smith says:
“The briefing document makes pretty clear that what is going to be done is one of the two scenarios I have previously sketched out … That is to bring back the old Renters (Reform) Bill with a new name but with a lot of the elements intact and probably re-using the same wording and then to edit it a bit to take out parts the Labour government do not like and to add in some new elements.”
- David Smith, Partner at JMW
You can read more of David’s analysis in his blog, ‘Not Renters Reform but Renter’s Rights’.
While the new Labour government is keen to implement these changes sooner rather than later, it will take some time before they can become law - Sean Hooker provides likely timings.
“As with all proposed legislation, we will not see a lot of detail until the Bill is laid, and even then, a lot of meat on the bone will only be added after it becomes law. It now looks almost definite that the Bill will only have its first reading after conference season, so October at the earliest and whilst it might go through the process quite quickly, we are looking at 2025 before it becomes an Act.”
- Sean Hooker, Head of Redress at the Property Redress Scheme
Other proposed bills that will impact the property sector include the English Devolution Bill, a draft of the Leasehold and Commonhold Reform Bill, and the Planning and Infrastructure Bill, which aims to ‘get Britain building, including through planning reform, … to accelerate the delivery of high quality infrastructure and housing”.
Following the King’s Speech, Prime Minister Keir Starmer said:
“Today’s new laws will take back control and lay the foundations of real change that this country is crying out for, creating wealth in every community and making people better off - supporting their ambitions, hopes and dreams.”
- Keir Starmer, Prime Minister
We will update this article with more information as the details of the Renters’ Rights Bill emerge. For more relevant information on the impact of the Labour government on landlords, read our article, ‘What does the General Election mean for landlords?’ which features highlights and insights from the National Landlord Investment Show, and listen to The Property Cast election special, ‘Should landlords be worried about the new Labour government?’ with Sean Hooker, Head of Redress at the Property Redress Scheme.
And for regular updates on breaking private rented sector and property news, subscribe to LandlordZONE, also powered by Total Property.
