Proposed in 2023, the Renters Reform Bill seeks to implement measures safeguarding renters’ rights within the housing market. The year ahead promises significant challenges and opportunities for property owners, from legislative reforms to tax adjustments.
With the prospect of a General Election in the second half of 2024, landlords brace for further uncertainty. In this blog, our Landlord Insurance experts explore the potential key changes that may impact the private rented sector in 2024.
Renters Reform Bill Progress
The Renters Reform Bill, is set to clear the House of Commons in April 2024. With the abolition of Section 21 and the establishment of a PRS Landlord Ombudsman, landlords must prepare for new regulations. The creation of the first ombudsman in England for landlords aims to provide tenants with a formal channel to address grievances and hold landlords accountable for any misconduct.
Introduction of a Property Portal
The Privately Rented Property Portal aims to streamline the rental process by creating a centralised platform for property listings, making it easier for tenants to find suitable accommodation. The Property Portal will also be used for communicating changes to requirements – ensuring landlords have access to simple up-to-date information about their responsibilities to ensure compliance.
Changes to Rent Increases
The Bill imposes more stringent regulations on rent adjustments, restricting increases to once per year and limited to market rates. Additionally, the notice period for rent increases will extend to two months, and tenants will possess the right to contest above-market hikes.
Ban on Section 21 “No-Fault” Evictions
Presently, landlords can evict tenants without specifying a reason under Section 21. However, the Renters Reform Bill aims to prohibit such evictions, thereby fostering tenant fairness. Nevertheless, this prohibition will only take effect once the court system has been improved.
Introduction of New Mandatory Grounds for Possession
The Bill introduces three new grounds allowing landlords to regain possession of their property post-Section 21 abolitions. These include situations where the landlord intends to occupy the property themselves, where a family member plans to move in, or if the landlord intends to sell the property. In cases meeting these criteria, the notice period will be two months, although this cannot occur within the initial six months of the tenancy.
Furthermore, landlords will have the option to seek eviction if the tenant accumulates at least two months’ rent arrears on three separate occasions within three years. However, the notice period for this will extend from two weeks to four weeks. Additionally, while anti-social behaviour has traditionally been grounds for eviction, the legislation will broaden to include “behaviours capable of causing” nuisance or annoyance under the government’s Anti-Social Behaviour Action Plan. Landlords can initiate eviction proceedings immediately upon demonstrating such behaviour.
Abolition of Fixed-Term Tenancies
The Bill will terminate assured shorthold tenancy agreements or assured tenancy agreements, replacing them with periodic or rolling tenancy agreements, typically on a monthly basis. However, an amendment dictates a default six-month minimum in all contracts, similar to the existing break clause, providing both landlords and tenants with enhanced security.
New Rules for Pets in Lets and Discrimination
Recognising the importance of pets to many tenants, the bill proposes rules that make it easier for renters to keep pets in rental properties, subject to certain conditions. Landlords will be required to provide insurance covering potential pet-related damages. Furthermore, blanket bans on renting to families with children or tenants receiving benefits will be outlawed to remove unnecessary discrimination.
Leasehold and Freehold Reform Bill
For landlords with leasehold properties, the Leasehold and Freehold Reform Bill offers potential relief. From lease extensions to ground rent limitations, this bill aims to empower leaseholders and streamline property transactions. Additionally, it aims to amend tenants’ rights under such leases, allowing them to acquire the freehold of their houses, extend their leases, or collectively take over management responsibilities for buildings containing their flats.
The bill also grants tenants the right to reduce their lease rents to a nominal amount, regulates the relationship between residential landlords and tenants, oversees residential estate management, regulates rent charges, and introduces amendments to the Building Safety Act 2022 concerning the remediation of building defects and the insolvency of individuals responsible for repairs on specific types of buildings.
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