By Darren Bee, Associate Director, Lansdown Insurance Brokers
The Renters’ Rights Bill, introduced to Parliament on 11 September 2024, represents the most significant overhaul of the private rented sector (PRS) since the Housing Act 1988. While it affects landlords and tenants alike, the implications may be felt most directly by letting agents and property managers.
The coming months are set to bring significant changes with new tenancy structures to heightened compliance and property standards.
At Lansdown Insurance Brokers, we work closely with landlords and property managers with their Landlord Insurance and Block of Flats Insurance. Here’s what you need to know and how these changes could affect your insurance.
What Is the Renters’ Rights Bill?
The Renters’ Rights Bill is the Labour Government’s ambitious plan to bring stronger protections and rights to tenants and drive up standards across the PRS. It’s a response to the view that the sector has become increasingly insecure, unaffordable, and inconsistent in quality.
According to the Government:
“While the majority of landlords provide a good service, the PRS currently provides the least affordable, poorest quality and most insecure housing of all tenures.”
The Bill is set to introduce a range of reforms, including:
Abolition of Section 21: What This Means for Tenancy Risk
This change is perhaps the most significant. Section 21 ‘no-fault’ evictions will be scrapped, meaning all Assured Shorthold Tenancies (ASTs) will transition to periodic tenancies.
While this offers stability for tenants, it adds complexity for landlords. Expect greater scrutiny during tenant referencing, increased importance on regular inspections, and potentially longer vacancy periods when possession is required.
From an insurance perspective, this makes Landlord Legal Expenses Cover and Rent Guarantee Insurance more critical than ever.
Updated Grounds for Possession via Section 8
To balance the loss of Section 21, the grounds for possession under Section 8 are being expanded and revised. But gaining possession will now require stronger documentation and a higher evidential threshold.
Letting agents must ensure their landlords are supported with clear communication and compliant documentation throughout a tenancy, particularly if possession becomes necessary. Insurers may also require this as part of a claims process.
Rent Increase Restrictions
With the move to periodic tenancies, landlords can only increase rent once per year using a Section 13 notice. Rental bidding wars, where tenants offer more than the asking price, will also be banned.
Agents will need to manage landlord expectations around rental income and ensure rent increases follow strict legal processes to avoid disputes or void increases.
A Stronger Focus on Property Standards
With the Decent Homes Standard set to extend into the private rental sector, we expect to see renewed focus on the quality and condition of rented homes. The addition of Awaab’s Law will require landlords and agents to respond more quickly to issues like damp and mould.
For letting agents and property managers, this presents both a challenge and an opportunity. Proactively advising landlords on necessary repairs or upgrades not only builds trust but also helps reduce claims on buildings and contents insurance. Damp, mould, and structural concerns, if left unaddressed, can lead to significant costs and potential liability.
Ending Discrimination Against Tenants on Benefits or with Children
The Bill will outlaw blanket bans on tenants with children or those receiving benefits, making it illegal for landlords or agents to refuse applicants on this basis. This move aims to ensure fairer access to housing across the private rented sector.
For letting agents and property managers, this change means reviewing internal policies, marketing practices, and landlord communications to ensure compliance. Landlords should assess all applicants on individual merit including referencing and affordability checks, will become essential.
It’s also worth reviewing insurance policies, as some older policies may include outdated clauses related to tenant type. Ensuring your Landlord Insurance doesn’t contain exclusions for tenants on benefits is crucial to avoid future claim issues.
Renting with Pets
The Renters’ Rights Bill will make renting with pets much easier. Tenants will have the legal right to request permission to keep a pet at any stage of the tenancy, and landlords will no longer be able to unreasonably refuse these requests.
For property managers and landlords, this means updating tenancy agreements and preparing to handle pet requests more regularly. It’s also wise to consider how pet ownership may affect insurance.
Some insurers may ask whether pets are kept at the property, particularly for liability or contents-related cover. Carrying out pre-approval checks, setting reasonable pet-related conditions (such as cleaning or damage clauses), and ensuring the property remains safe and well-maintained will help reduce the risk of future disputes or claims.
A New Mandatory Ombudsman and Landlord Register
The bill proposes a compulsory ombudsman for all landlords, giving tenants access to a clearer route for complaints and dispute resolution. Alongside this, a new property portal (effectively a national landlord register) is due to be introduced.
This reinforces the importance of documentation. Keeping thorough records of maintenance, communication, and compliance will be crucial in defending claims and avoiding disputes.
Next Steps for Property Managers and Landlords
- Review insurance policies: Check that your Landlord Insurance policy includes cover for loss of rent and legal expenses.
- Communication between Landlords and Property Managers: Discuss how the bill could affect the ability to regain possession, manage tenants, or carry out improvements.
- Reinforce compliance support: Staying compliant with the new standards may become a competitive advantage and a risk mitigation tool.
- Proactive property management: Regular inspections, timely maintenance, and tenant engagement are vital in today’s evolving rental landscape.
Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice.
About Lansdown Insurance Brokers
Lansdown Insurance Brokers are specialists in Landlord Insurance and Block of Flats Insurance. We can provide flexible policies to suit your needs and provide advice on what cover is needed. Whether you’re a landlord, investor, or property owner call the team on 01242 524498 or email enquiries@lansdowninsurance.com.
Lansdown is part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.