Renters Reform Bill passes final stage in the House of Commons

The Renters Reform Bill has passed its final stage in the House of Commons and has been voted in by MPs.

The Bill, based on reforms outlined in a June 2022 White Paper, was presented to Parliament in May last year and has undergone extensive debate and numerous amendments have been made since its introduction. Its primary objective has always been to enhance fairness for tenants in the UK's private rental sector. However, critics and landlords have raised concerns, particularly regarding the proposed ban on Section 21 "no-fault" evictions, citing concerns about the effectiveness of the current court process.

The final version of the Bill addresses this issue by postponing the ban on Section 21 evictions until a comprehensive review and potential enhancement of the court system is completed. While safeguarding tenants is crucial, there is an argument that landlords should retain the ability to evict tenants promptly in cases of valid reasons such as rent arrears or property reoccupation.

Renters Reform Bill: Key Points

The final Renters Reform Bill, which will now pass through the House of Lords before becoming law, contains some lengthy proposals for the sector, but below is a summary of some of the key points affecting landlords.

Section 21 “no-fault” evictions will be banned

Currently, landlords can remove tenants without justification through Section 21. This approach is favoured by many landlords over Section 8 (which is utilised when tenants violate tenancy terms) due to its perceived speed and simplicity.

The ban aims to create a fairer environment for tenants and prevent landlords from unjustly evicting tenants, for reasons like requesting repairs or significantly raising the rent. While the Renters Reform Bill will still ban "no-fault" evictions, it will only do so once the court system is improved.

New mandatory grounds for possession

The Bill introduces three additional scenarios in which a landlord can reclaim their property after Section 21 is eliminated. These include the landlord's intention to reside in the property, a family member's intention to move in, or the landlord's decision to sell the property. In such cases, the notice period will be two months, but this action cannot occur within the initial six months of the tenancy.

The landlord can seek to remove a tenant who has accumulated two months' rent arrears on three separate occasions within the previous three years. However, the notice period for this situation will be extended from two weeks to four weeks.

Anti-social behaviour is a pre-existing ground for eviction, and the Bill will expand on this to include “behaviours capable of causing” nuisance or annoyance. Eviction proceedings can be started immediately if the landlord can demonstrate that this is the case.

Fixed-term tenancies will be abolished

Landlords commonly utilise assured shorthold tenancy agreements or assured tenancy agreements, typically requiring tenants to commit for a year. The Renters Reform Bill will phase out these agreements, transitioning all tenants to a monthly periodic or rolling tenancy agreement.

However, one amendment to this that has been passed is that there will be a default six-month minimum in all contracts, similar to the break clause that already exists. This means tenants must stay for a minimum of six months before they can end their tenancy, giving landlords and tenants more security.

Outlawing discrimination

Renting with pets has been a contentious topic in the private rental sector for a while, as some argue that outright pet bans are unjust to tenants and hinder their sense of feeling like the property is their “home”. The upcoming legislation will prohibit landlords from "unreasonably" refusing a tenant's request to have a pet.

If having a pet is denied, tenants can challenge this decision. However, landlords will be able to require insurance to cover any damage caused by pets living in a private rental property.

Landlords and agents will also no longer be able to have blanket bans on renting to families with children, or tenants on benefits, to outlaw unnecessary discrimination.

Changes to rent increases

The Bill will introduce stricter regulations regarding the timing and manner in which landlords can increase rental rates. The rent can only be raised once a year, and the increase must align with market rates or what a landlord could reasonably charge a new tenant in the open market.

Additionally, the notice period for increases will extend from one month to two months, and tenants will be able to dispute values that exceed market rates.

For everything included in the Renters Reform Bill, see the Government website.