Renters Reform Bill: Your Essential Guide

Nikka Sulton

Renters Reform Bill: Your Essential Guide

The Renters (Reform) Bill, introduced in May 2023, marks a pivotal moment for private renters and landlords. Scheduled for its final House of Commons review in April 2024, it has stirred varied reactions from MPs, tenants, landlords, and letting agents.

While much attention has been drawn to the proposed abolition of Section 21 evictions, the bill encompasses numerous other significant proposals. These include transitioning to rolling tenancies, allowing tenants to keep pets, establishing England’s first landlord ombudsman, and introducing new property regulations.

The Renters (Reform) Bill is set for its final parliamentary review at the end of April 2024. This marks the last opportunity for MPs to discuss the bill before its potential enactment. Ahead of this debate, the Government has unveiled a comprehensive list of proposed amendments, approved by Housing Secretary Michael Gove, indicating a strong commitment to implementing these changes.

This guide provides a comprehensive overview of the Renters (Reform) Bill, covering all essential aspects and updates regarding its progress and proposed amendments.

What is the Renters (Reform) Bill?

The Renters (Reform) Bill is a significant legislative proposal aimed at overhauling the private rented sector (PRS) and enhancing housing standards across the board.

Among its key provisions are the prohibition of ‘no fault’ Section 21 evictions and amendments regarding pet ownership in rental properties. Additionally, it introduces measures such as a centralized property portal and the establishment of a landlord ombudsman.

These reforms are designed to deliver a fairer deal for renters and represent the most substantial changes to the private rented sector in three decades. The bill’s origins trace back to a white paper in 2022, followed by its formal introduction in May 2023.

Since then, the bill has undergone extensive deliberation in the House of Commons over an 11-month period. Its progression is slated to culminate in the third reading at the end of April 2024, prior to proceeding to the House of Lords.

Why is the Renters (Reform) Bill being introduced?

The UK’s private rented sector plays a crucial role in the housing landscape, accommodating over four million households—a figure that has doubled since 2004.

Acknowledging existing challenges, the government highlights concerns over the insecurity faced by some renters, particularly in relation to Section 21 “no fault” evictions. Concurrently, responsible landlords contend with issues stemming from the actions of a minority of unscrupulous counterparts.

Tenants frequently encounter issues such as unjustified rent hikes and advocate for measures such as the establishment of a landlord redress scheme and stricter enforcement against rogue landlords, as evidenced by media and online narratives.

What stage is the Renters (Reform) Bill at?

The Renters (Reform) Bill’s progression through the House of Commons follows a structured process:

First reading: Introduced to parliament in May 2023.
Second reading: Held in October 2023, facilitating debates among MPs from all parties. A notable development was the prerequisite for court reforms preceding the abolition of Section 21.
Committee stage: Conducted at the end of November 2023, involving a meticulous examination of the bill’s contents. Key outcomes included the application of the Decent Homes Standard to the sector, enhanced support for safeguarding student tenancies, prohibition of discrimination against benefit-receiving tenants, and revisions to Rent Repayment Orders.
Report stage: MPs engage in further discussions and amendments. This stage is now concluded.
Third reading: Scheduled for final deliberations on the bill before proceeding to the House of Lords, expected to take place on 24 April 2024.

When will the Renters (Reform) Bill become law?

The Conservative Party has pledged to enact the Renters (Reform) Bill before the anticipated Autumn 2024 General Election. However, the bill must navigate through both the House of Commons and the House of Lords before receiving Royal Assent, formalizing its status as law.

Michael Gove, Secretary of State for Levelling Up, Housing and Communities, is expected to present the bill for its third reading in the House of Commons by mid-April. During this stage, Conservative and Labour MPs will engage in final debates on the bill’s contents, without the option to propose further amendments.

Upon the bill’s enactment, not all policies will take immediate effect. Some provisions will be phased in gradually, such as the transition to periodic tenancies, with different timelines for new and existing tenancies. The establishment of an ombudsman and a digital property portal is likely to commence post-bill passage, subject to future regulations set by the Secretary of State.

Furthermore, the abolition of Section 21 awaits reforms to the courts, introducing additional uncertainty regarding implementation timelines.

What amends have been suggested by the government?

The government has released a comprehensive list of amendments slated for debate in the House of Commons by the end of April 2024.

Key amendments include:

Adjustments to periodic tenancies, requiring tenants to reside in a property for four months before giving two months’ notice to vacate, ensuring a minimum six-month occupancy.
The abolition of Section 21 ‘no fault’ evictions pending an assessment of court capacity to handle increased caseloads.
Enhanced safeguards for student housing to accommodate the cyclical nature of the student rental market, ensuring availability for prospective students.
Revised guidelines for pet requests, mandating landlords to respond in writing within 28 days of the request, with consent becoming irrevocable once granted.

What’s included in the Renters (Reform) Bill?

Abolition of Section 21 “No-Fault” Evictions:

The bill confirms intentions to abolish Section 21, a process allowing landlords to reclaim properties without providing a reason, commonly termed “no-fault eviction.” Instead, landlords will only be able to evict tenants under reasonable circumstances.

The 2022 government white paper highlighted that eliminating Section 21 would create a fairer dynamic between landlords and tenants, empowering tenants to contest unjust practices and excessive rent hikes, while encouraging landlords to address issues constructively.

Michael Gove reiterated the government’s stance that no-fault evictions can be deemed as “cruel and heartless.”

IS SECTION 21 STILL BEING ABOLISHED?

In October 2023, the government surprised many by announcing that the abolition of Section 21 would only proceed once sufficient improvements had been made to the courts. These enhancements include digitalizing court procedures, prioritizing disputes involving anti-social behavior, bolstering bailiff recruitment, and providing more support to landlords and tenants.

Michael Gove reiterated the government’s commitment to outlawing Section 21 before the General Election. However, Angela Rayner, deputy leader of the Labour Party, dismissed Gove’s assurances, accusing him of making empty promises after years of failures.

Ahead of the bill’s third reading, the government unveiled its complete list of proposed amendments. Notably, Section 21 cannot be abolished until it’s determined whether the courts can manage the expected increase in claims. Despite these changes, landlords may still evict tenants in specific circumstances, such as needing the property for personal use or intending to sell, with evicted tenants possibly eligible for local council homelessness support.

WHY DO COURT PROCESSES NEED TO CHANGE FOR SECTION 21 TO TAKE EFFECT?

The government’s decision to prioritize court reforms over the abolition of section 21 came as a bit of a surprise, given their previous collaboration with the Ministry of Justice and the HM Courts and Tribunals Service. This shift in focus may stem from dissatisfaction among landlord MPs concerning section 21, which is generally unpopular among landlords. By opting to address court reforms first, the government has made a notable concession in an effort to garner support from MPs.

HOW WILL SECTION 8 GROUNDS CHANGE?

Instead of relying on section 21, the bill proposes strengthening section 8, allowing landlords to terminate a tenancy if they have legal grounds to do so. The government intends to introduce a new mandatory ground for repeated rent arrears. This would require eviction if a tenant has been in arrears of at least two months’ rent three times within the previous three years, irrespective of the arrears balance at the hearing.

Additionally, landlords will have the option to apply section 8 to a tenancy if they need to sell a property or accommodate family members in the rental property. This option becomes available after a tenant has resided in the property for at least six months.

Transition to Single System of Periodic Tenancies

The bill underscores the government’s drive to streamline existing tenancy arrangements. Assured Shorthold Tenancies, typically spanning six, 12, or 24 months, will shift to a unified system of periodic (“rolling”) tenancies. These tenancies will roll over monthly without a specified end date.

Assured Shorthold Tenancies presently dominate the private rented sector, often commencing with contracts of six or 12 months. Following this period, tenants typically choose to renew or transition to a periodic payment structure, payable on a monthly basis.

Initially, proposals stipulated a two-month notice period for tenants when vacating a tenancy, aiming to enable landlords to cover tenant-finding costs and mitigate lengthy void periods. However, revised proposals now advocate for a mandatory six-month notice period.

Furthermore, landlords will only be permitted to evict tenants under “reasonable” circumstances.

Recent proposals, emerging from the amendment paper post-report stage, suggest that tenants must reside in a property for at least four months before being eligible to terminate the tenancy agreement. This measure aims to deter tenants from treating longer-term agreements as short-term lets.

WHAT ABOUT STUDENT TENANCIES?

Student lets typically follow a cyclical pattern, aligning with the academic calendar from September to June. Concerns arose among student landlords and letting agents regarding the transition to periodic tenancies.

During the committee phase, the government introduced a strengthened ground enabling landlords to reclaim properties at the end of the academic year.

Frankie Malpass, Product Lead at Vouch, commented: “It’s encouraging to see the government addressing this issue by facilitating the completion of tenancies at the academic year’s end, allowing students to plan their housing in advance. However, more specifics are needed to fully address student and landlord concerns.”

In April 2024, proposals were made to streamline the eviction process for landlords, ensuring students vacate at the end of their academic year, facilitating property turnover for the next academic cohort.

Doubling Notice Periods for Rent Increases

Under the Renters’ (Reform) Bill, landlords must now provide a minimum of two months’ notice for any rent changes, limited to once per year.

Rent Review Clauses Eliminated

The bill aims to eradicate rent review clauses, preventing tenants from facing vague or unjustified rent increases. Landlords can adjust rents annually in line with market rates, with tenants given two months’ notice.

Government Oversight on Rent Increases

A new form will notify tenants of proposed rent hikes. Tenants can challenge increases via the First-tier Tribunal if deemed unjustified, but courts may adjust rents within reasonable limits. Tribunal rulings cannot exceed landlords’ proposed increases.