Renters Reform Bill where are we now?

Ifyou’re a landlord of a residential property, you will be acutely aware of the proposed Renters Reform Bill. We are now approaching four years since legislation to reform the rental sector was first pledged by the government, but we are still waiting for it to be introduced.

The good (or bad) news is that there is finally some progress to report because, on 17 May, it was introduced to Parliament. However, this is just the first step in a long process of scrutiny and amendment by both houses before it becomes law.

What is being proposed?

The Bill intends to:

• End ‘no fault’ evictions by repealing Section 21 of the Housing Act 1988.

• Impose periodic tenancies, with no fixed term, continuing until the tenant serves notice (likely to be two months) or the landlord serves notice, relying on one of the grounds for possession.

• Extend the grounds for possession available under Section 8 of the Housing Act 1988, i.e., so there are grounds to use if the landlord wants to sell their property.

• Increase notice periods if landlords want to increase rent.

• Provide a mandatory ombudsman process for the resolution of disputes, with the ombudsman potentially being able to impose fines of up to £25,000.

• Improve the court process for recovering possession if there is a breach.

Further reforms are also being considered, including to:

• Prevent landlords from refusing to rent to families, tenants with pets, or tenants in receipt of housing benefit.

• Apply the Decent Homes Standard to the private rental sector. This is currently in force for social housing but is likely to be extended to force landlords to bring their properties up to the condition required by the Standard.

At first glance, these reforms may look onerous, but for the majority of respectable landlords, they will pose few difficulties.

Whilst landlords can no longer limit tenancies to a fixed term, there will be extra grounds for possession which means they can recover their property in most circumstances.

The new grounds will be mandatory and include being able to serve notice if a landlord genuinely intends to sell the property, or if they need it back to live in it themselves or to house family members. Additionally, the usual grounds will still be there, i.e., for late or non-payment of rent.

What happens next?

Creating new legislation is a lengthy process. The bill must have a second reading, a committee review and report, and a third reading, all in the Commons before it is taken to the House of Lords where the entire process is repeated. It will then return to the Commons for consideration of amendments before it receives final assent.

The first reading has already caused a stir, with Michael Gove, the Minister for Levelling Up, having to back-track and consider an amendment to permit fixed-term student lets to allow landlords to obtain vacant possession at the end of the fixed term, ready for the next cohort of students.

There are likely to be many twists and turns before the bill becomes law. Lodders will continue to monitor its progress and keep you informed of new developments.

Mary Rouse

E: mary.rouse@lodders.co.uk

T: 01789 339123

Lauren Hutchinson

E: lauren.hutchinson@lodders.co.uk

T: 01789 206146