Renters' Rights Bill: What does this mean for you as a Landlord?

Everything you need to know about the Renters’ Right Bill

As discussed in our recent article, the rental market is changing a lot this year. In the article, we highlighted six trends that landlords should be aware of this year in order to make the most of the opportunities and challenges coming their way.

In this article, we are going to take a deep dive into one of those legislative changes in particular: The Renters’ Rights Bill.

What is the Renters’ Right Bill?

The Renters’ Rights Bill is a proposal for a new law surrounding rented homes, temporary accommodation and supported accommodation. The proposed changes will have a significant impact on both landlords and tenants alike.

At the time of writing, the bill is currently in the House of Lords in the committee stage. It has completed and been approved by the House of Commons. To keep abreast with the bill’s progress as it moves through parliament, you can follow the bill’s passage here.

What does the Renters’ Rights Bill include?

The new legislation proposes the following key changes:

• Abolish section 21 evictions

According to the latest figures, 4.6 million households in England have assured shorthold tenancies (ASTs). That equates to 19% of all households in the country.^[1] However, these ASTs offer no security for the tenant long term. Section 21 of the Housing Act 1988 states that private landlords can repossess their properties without having just cause from the tenant. This is referred to as a ‘no-fault’ eviction.

The new Renters’ Rights Bill will abolish this and make all tenancies periodic, allowing tenants to feel secure in their tenancy agreement. It will also allow tenants to challenge bad practices and any unfair increases in rent, as they will no longer need to fear unfair evictions.

Landlords may still evict tenants as long as they have valid reasoning.

 

• Changes to rent increase regulations

The bill states that landlords can only increase the cost of rent once per year in accordance with the market rate. They must give tenants two months notice, and tenants will be able to challenge any increases that they deem unfair via a tribunal.

This will also help prevent backdoor evictions when a landlord raises the rent an excessive amount to essentially evict their tenants.

 

• Introduce a new Ombudsman and Database

To provide an impartial resolution for any complaints tenants raise about their landlord, a new Private Rented Sector Landlord Ombudsman will be created.

This is in addition to a Private Rented Sector Database, which aims to provide both landlords and tenants with all the information they need to make informed decisions about their tenancy agreement. All landlords will need to be registered on this new database.

 

• The end of ‘rental bidding’

Under the new law, landlords and agents will be prohibited from accepting any offers above the advertised rent. They must publish the asking rent clearly when listing the property.

 

• No blanket ban on pets

The Renters’ Rights Bill aims to give tenants the opportunity to request the right to house a pet in the property. Landlords will no longer be able to impose a blanket ban on pets in the property unless they have a good reason and must consider each request on a case-by-case basis. More information on the conditions of this to follow.

 

• Improve living conditions

The bill also strives to introduce a Decent Homes Standard (DHS) which will establish clear standards on living conditions. Any landlords whose properties are deemed substandard could find themselves facing penalties and prosecution. This will overlap with Awaab’s Law that comes into effect in October.

 

• To prevent discrimination

Going forward, it will be illegal for agents and landlords to discriminate against tenants, while ensuring all applicants are treated fairly while searching for a place to live.

How will the changes to the Renters’ Rights Bill impact tenants and landlords?

The proposed changes to the Renters’ Rights Bill has the potential to improve the rental conditions for tenants immensely.

For landlords, however, the bill introduces some uncertainty. Landlords will need to keep up to speed with the developments to make a seamless transition between the updates and avoid legal disputes.

How will this impact your insurance?

The bill states that landlords will be able to enforce pet insurance on any tenants who have pets. Either the tenant must have their own pet insurance, or the landlord can add it to their existing landlord’s insurance policy and charge the difference in price back to the tenant.

This is to cover any damage the pet makes to their property.  Where the insurance may not cover the damage, for example scratching and stains, the landlord can recoup from the deposit, or court in line with wider rules.

Landlord insurance with Towergate Insurance

If you want to know how the Renters’ Rights Bill will impact you, reach out to our landlords insurance team to on 0330 808 8282 and you can get a quote online.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a Fellow member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

Sources

[1] https://bills.parliament.uk/bills/3764https://commonslibrary.parliament.uk/research-briefings/cbp-10106

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.