UK Renters Reform Bill 2023: What's changing for landlords?

Discover how the UK Renters Reform Bill 2023 will impact landlord and tenant rights as it changes the rental sector in the UK.

Ellie Whyte

6 minute read

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16 Nov 2023

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News

The information presented in this article is based on the most recent reading of the UK Renters Reform Bill on October 23, 2023. Further updates may have occurred since then. For the latest and most accurate details, we recommend checking the official government website.

According to the Fairer Private Sector whitepaper, 21% of over 4 million privately rented properties in the UK fall short of basic safety and decency standards. Additionally, 11% of private landlords exhibit low compliance with legal requirements and good practices, undercutting responsible landlords.

To combat these issues, Theresa May's government introduced the Renters Reform Bill in April 2019, which focuses on quality, affordability, and fairness in the private rental sector.

The Renters Reform Bill is still being discussed in parliament, making it important for you to stay on top of the developments. Find out below what’s changing for landlords and how you can prepare for it.

The Renters Reform Bill is a proposed legislation in the United Kingdom aimed at reforming the private rental sector. The goal of a Renters Reform Bill is to implement policies and regulations that enhance the possession rights of landlords whilst protecting the rights and living conditions of tenants by addressing issues related to affordable housing, tenant protections, and housing stability.

Find out below an overview of the key provisions of the Renters Reform Bill and the government’s response to the “Levelling Up, Housing and Communities Committee report” which addresses concerns raised to the committee.

Assured shorthold tenancies are the most common type of tenancy agreement in the UK, as they allow landlords to rent a property for a fixed term. The UK Renters Reform Bill aims to simplify tenancy structures in the Private Rental Sector (PRS) by abolishing assured shorthold tenancies and replacing any assured tenancies with periodic tenancies with no end dates.

This restructuring will not apply to Purpose Built Student Accommodations (PBSAs), temporary accommodation or supported housing. The abolition of fixed-term tenancies will only apply to student lets within the PRS. In the government’s recent response, they mentioned that they will introduce a new ground of possession for student lets but did not yet elaborate on what that would be.

Implications for landlords

On one hand, periodic tenancies could mean that certain tenants stay for a long period of time, thereby reducing administrative and marketing costs for landlords. But the bill also proposes that tenants can end their tenancy by serving a 2-month notice period, unless a shorter period is agreed upon in writing. Overall, this means that landlords need to amend their strategy to account for unpredictability.

To minimise the risk of extended void periods, use platforms where trustworthy tenants book months in advance. For example, you can relist your property on HousingAnywhere, where different types of tenants from across the globe will look at your property, maximising your chances of finding a replacement tenant quickly.

The bill initially aimed to abolish Section 21, an eviction process that allows private landlords to repossess their properties without providing a specific reason. However, this abolition has been paused indefinitely while court reforms take place. Court reforms are expected to take between 1 to 3 years, following which the abolition of Section 21 eviction notices will be brought forward once again.

In place of Section 21, the government plans to strengthen possession rights by using Section 8 eviction notices. The October hearing introduced new grounds for strengthening landlord possession.

• Revised Ground 1 (primary residence): The tenant can be evicted only after 6 months if the house is to be used as the primary residence by the landlord or their family.
• New Ground 1 A (sale of property): The tenant can be evicted only after 6 months if the intention is to sell the property. The property may not be advertised for at least 3 months after the notice if the sale doesn’t go through.
• New Ground 8A (arrears): Tenants can be evicted for arrears if they have been late on 2 months’ rent by more than a day on at least 3 occasions in the past 3 years. This Ground cannot be used if the tenant is late due to delayed benefit payments.
• Revised Ground 14 (anti-social behaviour): Landlords will be able to evict tenants who are “capable of causing” anti-social behaviour. Landlords will also be mandated to include a non-exhaustive list of anti-social behaviours in the written rental agreement.

With the new Bill, rent increases will be limited to once a year, and landlords will need to serve a rent increase notice with a 2-month notice period. This new notice will be available on the government website when the Bill is passed.

Landlords can set rental prices based on the market rate. Tenants will need to accept the rent increase before the notice expires or challenge excessive increases through a tribunal. The rent will be applicable from the day after the notice expires.

Landlords cannot unreasonably deny a tenant's request for a pet on the rental property. Reasons could include pet size with respect to property size, allergies or phobias or co-renters.

You need to make a decision within 42 days (with a possible 1-week extension for additional information). Until then, the tenant cannot bring the pet to the property. If you consider allowing pets, you can have the tenant provide pet insurance to cover pet-related damages. Further pet policy guidance will follow in the coming months.

Introduction of an Ombudsman

The Bill proposes that enrolling in an Ombudsman scheme will no longer be voluntary but mandatory for all landlords in England, regardless of whether they work with an agent. The Ombudsman will handle tenant complaints, and offer binding decisions requiring corrective action from landlords or compensation of up to £25,000.

Landlords and agents alike will not be permitted to advertise or market their rental properties until they have registered with the scheme. Failure to register with this scheme can result in penalties of up to £30,000 from the local council.

While landlords will have to pay a small fee to sign up, the government hopes that landlords can also benefit due to a streamlined process of handling complaints. The government is also exploring a mediation service for landlords to resolve disputes with tenants.

A new property portal

Under the proposed Bill, landlords will legally be required to register their property and themselves on the property portal before they advertise their property. The portal will reflect if landlords are compliant, such as having the necessary safety certificates. If landlords aren’t compliant and do not update the database within a 28-day grace period, local councils will have the authority to take action against them.

There will be a small registration fee to sign up, but landlords or agents won’t be charged for keeping entries up to date on the database. Abiding by these regulations will not only be important to keep your property status as “active” on the database but it can also offer you an easy way to demonstrate compliance in case of disputes. Such a portal is also great for new or seasoned landlords who would like to easily know their rights, responsibilities, and what actions they still might need to take to remain compliant.

As of the second hearing in October 2023, the government is still exploring how they can ensure that data collection isn’t a burden for landlords and how to ensure that the information is safe and accurate. They also mentioned a tiered system of penalties if landlords recklessly advertise false information.

Besides these changes, the whitepaper also included mentions of introducing a Decent Home Standard and making it illegal to put a blanket ban on renting to vulnerable tenants who receive benefits. However, the recent Bill does not elaborate on these and they may be introduced later.

The Renters Reform Bill has not yet passed in the parliament. The House of Commons introduced the Bill on May 17, 2023, but it's still about a year away from becoming law. However, it is expected that the bill will be expedited in the coming months prior to the 2025 general election. The Renter Reform Bill is a core element of the Conservative Party Manifesto.

Tenancy reforms timeline

The proposed tenancy reforms will be implemented in 2 phases to ensure stakeholders have sufficient notice and to avoid a two-tier rental sector.

• Phase 1: the reforms will apply to new tenancies. The government has pledged to provide at least 6 months’ notice before all new tenancies become periodic tenancies.
• Phase 2: the reforms will apply to existing tenancies. The government has also pledged to provide at least 12 months’ notice prior to implementation and this phase will likely be 12 months after phase 1.

The dates of these implementation phases are contingent on when the bill receives Royal Assent.

Ombudsman and Property Portal timeline

It is expected that both the Ombudsman and Property Portal will be introduced as soon as possible once the bill has received Royal Assent.

The first phase, affecting new tenancies only, is expected between Autumn 2024 and Spring 2025. The second phase, impacting all existing tenancies and including the abolition of Section 21, is projected for Autumn 2025 to Spring 2026.

Track the Renters Reform Bill's progress on the UK Government website.

Please note that our current knowledge about the bill comes from the bill itself and the June 2022 whitepaper. To stay up to date on the latest developments, bookmark this page.

This article is for informational purposes only, and no legal rights can be derived from this. Please consult the appropriate authorities or a lawyer for legal advice.

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