Rent Increase Notice Periods Extended, No-fault Evictions Abolished, and Minimum Housing Standards Established.
Key Insights
The much-anticipated Renters’ Reform Bill, which is set to abolish no-fault evictions in England, has been presented to Parliament
The objective of the bill is to make the private rented sector safer and more equitable for tenants
The bill will allow tenants to dispute rent increases and request pet ownership. Furthermore, landlords will no longer be able to reject potential tenants on benefits or with children
In England, the long-awaited Renters’ Reform Bill, which proposes to abolish no-fault evictions, has been presented to Parliament.
The bill incorporates an array of measures aimed at making the private rented sector safer and fairer for tenants while improving the quality of housing.
Additional modifications include providing tenants with a legal right to pet ownership and terminating the blanket prohibition on renting to individuals receiving benefits or those with children.
Tenants will also receive two months’ notice prior to rent increases and will be able to dispute any increases above the market rate for their homes, preventing landlords from using exorbitant rent hikes as a tactic to force tenants out.
The bill also encompasses provisions benefiting landlords, including streamlining the process for them to reclaim their properties when necessary.
In relation to this, Housing Secretary Michael Gove said, “Too many renters are living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.
“This Government is determined to tackle these injustices by offering a New Deal to those living in the Private Rented Sector, one with quality, affordability, and fairness at its heart.”
What Shifts Will Tenants Experience?
Here are the significant changes tenants will encounter when the bill is enacted:
Section 21 ‘no fault’ evictions will be abolished, signifying that landlords cannot evict tenants without a legitimate reason. The government anticipates that this amendment will empower tenants to stand up to inadequate landlords without fear of losing their homes.
Tenants will benefit from enhanced protections against surreptitious evictions and will have the right to contest extreme rent hikes intended to force them out of their homes. They must be given two months’ notice of rent increases, and if they believe their new rent exceeds the market value, they can appeal to a tribunal.
Tenants will have a legal entitlement to request pet ownership in their homes. Landlords must review the request and cannot unreasonably decline it, although they can ask tenants to purchase pet insurance to cover potential property damage.
For the first time, the Decent Homes Standard, which currently applies to the social rented sector, will be extended to the private rented sector. This requires landlords to ensure their properties meet minimum standards suitable for habitation.
Landlords and agents will be prohibited from implementing blanket bans on renting to individuals on benefits or with children.
All tenants will transition to a single system of periodic tenancies.
Councils will see their enforcement powers strengthened, and they will be required to document their enforcement activities to target criminal landlords.
A new Private Rented Sector Ombudsman will be established to expedite and make dispute resolution more affordable. All landlords will be obligated to join it. The Ombudsman will have legal authority to compel landlords to undertake remedial actions and provide compensation.
A new digital Property Portal will be developed to assist landlords in understanding and demonstrating their compliance with their responsibilities, and to aid tenants in making informed decisions about their landlords.
Consumer groups have welcomed the bill’s publication.
Dan Wilson Craw, acting director at Generation Rent, said: “The Renters’ Reform Bill is a huge opportunity to improve the lives of the 11 million people who now rent from private landlords in England.
“Arbitrary Section 21 evictions make it impossible for tenants to put down roots and report problems about their home with confidence. Abolishing them will take away much of the stress of renting and improve communication and trust between tenants and landlords.”
What Implications Does the Renters’ Reform Bill Have for Landlords?
The bill includes measures to simplify the process for landlords to reclaim their properties when necessary, such as if they want to sell the property, move a close family member in, or if tenants are ‘wilfully’ not paying rent.
The notice periods for tenants will also be reduced if they have behaved irresponsibly, such as breaching their tenancy agreement or damaging the property.
The process for landlords to evict anti-social tenants will be expedited and simplified, including broadening the range of disruptive and damaging activities that can result in eviction. More of the legal process to evict a tenant will be digitalised to minimise delays.
Landlords will retain the right to adjust rents to the market price for their property.
Regarding this, Ben Beadle, chief executive of the National Residential Landlords Association, said: “We welcome the Government’s pledge to ensure landlords can swiftly recover properties from anti-social tenants and those failing to pay their rent. Plans to digitise court hearings will also improve the speed at which legitimate possession cases are processed.”
What is the Rationale Behind This?
Approximately 11 million people live in the private rented sector, but a quarter of homes fail to meet basic decency standards, according to government data.
Additionally, research reveals that more than one-fifth of private renters who moved in 2019 and 2020 did not do so voluntarily.
The government hopes the new bill will restore balance between landlords and tenants.
Moreover, it fulfills the government’s manifesto commitment to abolish no-fault evictions.
