Six things you need to know about the Renters (Reform) Bill

The long-awaited Renters (Reform) Bill has now been submitted to Parliament by Housing Secretary, Michael Gove. The Bill features a range of changes aimed at fundamentally reforming England’s Private Rented Sector (PRS) and ‘levelling up’ housing quality across the nation. Here are the top things you need to know about the bill.

Why is the Bill being introduced?

In 2019, the Conservative party manifesto committed the government to the introduction of a new Renters’ Reform Bill that would seek to “bring in a better deal for renters” – intending to make the market fairer for tenants. Proposed changes included tackling a lack of security that tenants face as a result of section 21 ‘no fault’ evictions, as well as boosting the overall quality of housing with the extension of the Decent Homes Standard to privately rented properties.

What do you need to know?

1. Abolition of section 21 ‘no fault’ evictions

The Bill outlines the complete abolition of section 21, in which notice is given to a tenant to end an assured shorthold tenancy, allowing the landlord to gain possession of the property. 

The government’s overview of the Bill, states this measure will provide “more security for tenants and empower them to challenge poor practice and unfair rent increases without fear of eviction”.

2. Periodic tenancies to become the standard

The government has moved to simplify England’s existing tenancy structure, abolishing all Assured Shorthold Tenancies (ASTs) and switching tenants to a single system of periodic tenancies.

ASTs are currently the most common type of residential tenancy in England. Tenants will usually enter a tenancy on a six or twelve-month fixed-term agreement before having the option to either renew the fixed-term tenancy or move onto a periodic tenancy – rolling by each month without a specified end date.

This single system of periodic tenancies mean that tenants would need to provide two months’ notice when leaving a tenancy, allowing landlords to find a new tenant and avoid any lengthy void period.

3. Changes to increasing rents

As a measure to control the spiralling increases in rent and combat ‘backdoor evictions’ by massively increasing rent prices, the government has included provisions for tenants to appeal against excessively above-market rents, with judgements to be made by an independent tribunal.

As outlined in the original white paper, rent increases will be limited to once per twelve-month period and the notice period for an increase will be doubled to two months.

4. Ban on blanket ‘no pet’ policies

Tenants are set to gain more rights to keep pets in properties, which the landlord is required to consider and cannot unreasonably refuse. To encourage this, landlords will be able to require pet insurance to protect against any damage that may occur as a result of the pet.

5. Creation of a new ombudsman covering all private landlords

Adoption of the Bill will create a new Private Rented Sector Ombudsman and require all private landlords who rent out property in England to join a government-approved redress scheme. Memberships are set to become mandatory, with failure to join resulting in enforcement action ranging from £5,000 civil penalties to £30,000 fines, criminal prosecution, and Banning Orders for repeat offenders.

The new ombudsman would allow tenants to seek redress for free, where their landlord has failed to deal with a legitimate complaint about their tenancy. It would also have the power to compel landlords to issue apologies, provide information, take remedial action, and to pay compensation of up to £25,000.

6. Property Portal 

A new Privately Rented Property Portal is also set to be created with the intent of helping landlords to understand their legal obligations and demonstrate compliance. All landlords will be legally required to register themselves and their properties on the Portal and would be subject to penalties if they fail to do so.

For tenants, the Portal will increase the information available to them through their renting journey and direct them to escalate issues to their local council or the new Ombudsman where necessary.

Tom Goodman, Managing Director at Vouch, comments:

“It’s encouraging that some of the proposals that were giving landlords huge grounds for concern, such as rules around the eviction of anti-social tenants and plans to introduce periodic tenancies, have been re-evaluated. And there’s no doubt that tenants’ rights will be given a welcome boost by these reforms.

However, lots of unknowns remain and it looks like the industry will continue to operate on a mixture of confirmation and speculation until the final version of the Bill is shared. The sooner this uncertainty can be brought to an end the better, as agents and landlords need time to understand every detail of the legislation and update their operations accordingly.”