Renters Reform Bill – what is it and what does it mean for landlords?

Safe and secure

Providing a safe and decent home should be the minimum standard for any landlord but it is the changes to the tenancies and evictions that are causing them the greatest concern. The government outlined in their white paper that:

• No tenant should be evicted against their will without proper reason and proportionate notice.

• Tenants, whatever their circumstances, should have confidence that they can remain in their home and be able to put down roots in their communities.

• Tenants should be able to move if their life circumstances change or they are unhappy with the property.

• Landlords should be able to regain possession of their properties efficiently when they have a valid reason to do so.

The biggest piece of legislation for landlords to come into force in decades has to be the Renters Reform Bill, and it could be made law this year. This follows a consultation paper on reforming tenancies in the private rented sector in England published by the government in April 2019. The reforms are widespread, proposing that Section 21s, known as ‘no fault’ evictions (the term is misleading), are replaced by a ‘Decent Homes Standard’, which is legally binding. Research suggests that the threat of losing Section 21 is having a major bearing on many landlords’ decision to leave the private rented market. A recent report from Zoopla showed that the availability of rental stock was down by 38% on a 5-year average, meaning there are fewer rental properties available today. With this in mind, what does the Renters Reform Bill mean for landlords in Bath?

Safe and decent homes

The government state in their white paper, ‘A fairer private rented sector’, published in June last year, that they believe:

• All tenants should have access to a good quality and safe home.

• No one should pay rent to live in a substandard, or even dangerous, property.

• Standards in the private rented sector should go beyond safety –an expectation that already exists in the social rented sector.

• Landlords should have a clear benchmark for standards in the properties that they let.

Its intent is to ensure that safe and decent homes are provided within the private rented sector, and giving greater powers and protections to tenants to allow them to challenge poor practice. The government describe ‘decent’ as follows:

“a home must be free from the most serious health and safety hazards, such as fall risks, fire risks, or carbon monoxide poisoning. It is unacceptable that hazardous conditions should be present in people’s homes when they can be fixed with something as simple as providing a smoke detector or a handrail to a staircase.”

These changes will see Section 21 being abolished and replaced with a requirement that landlords have a ‘reasonable circumstance’ to regain possession of their property. They will have to rely on statutory grounds for possession , which will be defined within the new legislation. These include allowing you to end a tenancy should you wish to sell your property as long as six months has passed since the beginning of the tenancy agreement.

Assured and assured shorthold tenancies will be replaced by ‘periodic tenancies’. Instead of a fixed period of, say, 6 months, these are weekly or monthly tenancies, thus providing more flexibility. Rent arrears is a challenging issue for any landlord, and the rules allowing landlords to seek possession of their property based on rent arrears will also change: ‘the notice period for the existing rent arrears eviction ground to four weeks and will retain the mandatory threshold at two months’ arrears at time of serving notice and hearing.’

Landlords need to be informed

The landlords we work with in the Bath apartment market already work hard to ensure that their properties are regularly maintained and are ‘safe and decent.’ Yet these proposals are not as widely known as they should be ,according to recent market research by property bridging finance broker, Finbri. Their survey found that the Renters Reform Bill is not on the radar of at least 40% of UK landlords.

We have only given a brief overview of the Renters Reform Bill here but will keep you updated on any changes that result from the recent review of the white paper by The Levelling Up, Housing and Communities Committee.

It is essential that all landlords understand the major changes being proposed, and our team are always on hand to discuss how they impact you, your tenants and your property portfolio. For further information please contact the Nicola and the Lettings team on 01225 303870.