Renters (Reform) Bill: A quick overview

Updated on 3 November 2023

The Renters (Reform) Bill was finally introduced to Parliament on 17 May 2023, having first been promised in 2019. The government states that the objective of the Bill is to ensure private renters have access to a secure and decent home and that landlords retain the confidence to repossess their properties where they have good reason to.

However, the government’s response to the Levelling Up, Housing and Communities Committee’s fifth report published on 20 October 2023 indicates an indefinite delay to the abolition of section 21 eviction until reforms to the justice system are in place. The government further confirms that the target areas for improvement include digitising more of the court process to make it simpler and easier for landlords to use, exploring the prioritisation of certain cases, including antisocial behaviour, improving bailiff recruitment and retention and reducing administrative tasks so bailiffs can prioritise possession enforcement, and providing early legal advice and better signposting for tenants, including to help them find a housing solution that meets their needs.

The Bill’s key reforms currently include the following but revisions are expected to reflect the government’s recent statement outlined above:

1. Abolishing section 21 ‘no fault’ evictions and fixed term tenancies

All assured tenancies will become periodic tenancies (no more fixed terms) with the aim of providing more security for tenants. Tenants will be able to end a tenancy at any time on two months' notice. Section 21 “no fault” evictions are to be abolished with landlords only able to evict a tenant in reasonable circumstances as set out in the legislation. Purpose-built student accommodation will be exempt from these changes as long as the provider is registered for government-approved codes, since these tenancies are not assured. The reforms further add fixed-term tenancies of more than seven years to the list of tenancies that are excluded from this assured tenancy system. New provisions will be added to the Housing Act 1988 to apply appropriate financial penalties as an alternative to criminal prosecution (subject to a GBP30,000 maximum) for prohibited behaviour under the new system with the intention of helping local authorities proportionately target enforcement activity against those landlords who wilfully or recklessly disregard their obligations to tenants. The maximum limit on the penalty may be amended to account for inflation.

2. Reforming possession grounds and notice periods

Although “no fault” evictions will be abolished, landlords’ other rights of possession are to be strengthened. The possession grounds have been reformed to ensure landlords can recover their property when they need to (including where landlords wish to sell their property or move in close family) and aim to make it easier for landlords to repossess their properties where tenants are at fault, in cases of anti-social behaviour and repeat rent arrears. Notice periods will also be reduced where tenants have been “irresponsible” – for example breaching their tenancy agreement or causing damage to the property. You can find a table of the reformed grounds for possession together with the relevant notice periods here.

3. Fixing the process for rent increases and appeals against above-market rents

Landlords will only be allowed to raise rent once a year. In the new system, all rent increases by private landlords (except those of a “relevant low-cost tenancy” – being an assured tenancy of social housing within the meaning of Part 2 of the Housing and Regeneration Act 2008) will need to be via one mechanism which replicates the existing section 13 process. The landlord will be required to complete a simple form, which will be published on GOV.UK, and serve this on the tenant. Once the form is served, no further action is required by the landlord provided the proposed rent increase is accepted by the tenant - the new amount is simply paid on the next rent day. However, the tenant may challenge the rent increase before the starting date of the proposed new rent, should they believe it to be above market rate. The aim of this is to stop retaliatory rent increases being used as a route to evict tenants. Lease terms which allow rent increases outside of the statutory mechanism will be of no effect.

4. Introducing a new Ombudsman

All private landlords must join the Ombudsman which is intended to provide fair and binding resolution to issues faced by tenants and to be quicker, cheaper, and less adversarial than the court system. Whilst only tenants will be able to complain to the Ombudsman, the government is exploring the possibility for the Ombudsman to offer mediation services to landlords to help them resolve their disputes with tenants. The Ombudsman will have powers which include compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to GBP25,000. The Bill provides for the imposition of financial penalties in lieu of prosecution for first and subsequent breaches of the requirement for landlords to be members of the redress scheme (first breach subject to a maximum penalty of GBP5,000 and subsequent breaches subject to a GBP30,000 maximum). As above, the maximum limits on the penalties may be increased in line with inflation.

5. Introducing a new Property Portal

The new Property Portal is to include a database of residential landlords and privately rented properties in England. This is intended to help landlords understand their legal obligations and demonstrate compliance, provide better information to tenants enabling them to make informed decisions when entering into a tenancy agreement, and assist in targeting councils’ enforcement activity. The government intends to charge a fee to landlords for registration on the database. All dwellings (and the associated private landlords) must be registered on the database before they can be let, or before they are advertised or marketed for let. Financial penalties for minor breaches, or as an alternative to prosecution for more serious breaches, will apply.

6. Allowing tenants to request to keep a pet

The Bill gives tenants the right to request a pet in their property, which the landlord must consider and cannot unreasonably refuse. The circumstances in which it is reasonable for a landlord to refuse consent include those where the pet being kept at the property would cause the landlord to be in breach of its obligations to a superior landlord and also where the consent of the superior landlord would be required for the pet to be kept at the property, and the landlord has taken reasonable steps to obtain that consent but the superior landlord has not given it. To provide further counterbalance, an amendment to the Tenant Fees Act 2019 allows landlords to require pet insurance to cover any damage to their property. However, whether payment by the tenant of additional cleaning costs may also be permitted as a condition to consent is not yet clear.

7. Reforming the court process

To ensure the new tenancy systems works for landlords and tenants, a “reformed courts process” will be introduced alongside the reforms. For the few evictions that do end up in the courts, more of the process is proposed to be digitised which the government hopes will reduce delays.

 

Further commitments

The government is also committed to bringing forward legislation as part of the Bill to:  

•  apply the Decent Homes Standard to the private rented sector;
• make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children;
• strengthen councils’ enforcement powers and introduce a new requirement for councils to report on enforcement activity.

 

When will the reforms be implemented?

Tenancy reforms

It was proposed that the new system would be implemented in two stages to ensure all stakeholders have sufficient notice to implement the necessary changes. However, it is unclear how the government’s recent statement delaying the abolition of section 21 evictions indefinitely will impact these stages.

The government had pledged that at least six months’ notice of the first implementation date would be given, after which all new tenancies will be periodic and governed by the new rules. The date of this will be dependent on when Royal Assent is received, and when the court system is ready to implement the new system.

To avoid a two-tier rental sector and to make sure landlords and tenants are clear on their rights, all existing tenancies were to then transition to the new system on the second implementation date. After this point, it was expected that all tenants will be protected from section 21 eviction and landlords will have access to a full range of strengthened grounds for recovery of the let premises. The government had further confirmed that there will be at least twelve months between the first and second date.

We now await the reprinting of the Bill following committee stage to report on any subsequent amendments to implementation.

Ombudsmen and Property Portal

The Ombudsman and Property Portal are expected to be introduced as soon as possible after the Bill has received Royal Assent.