The private rented sector (PRS) in the UK has grown significantly in recent years, with millions of people now living in such accommodation. However, it's been plagued by problems, including high rents and unfair increases, poor landlord practices, low-quality homes, and a lack of security for tenants.
The Renters (Reform) Bill, introduced to Parliament on 17 May, aims to address these issues and create a fairer and more transparent PRS.
While the bill has completed progress in the House of Commons, no date has been made for the second reading.
The National Residential Landlords Association (NRLA) anticipates that royal assent – when the bill becomes law – could happen towards the end of this year or early in 2024. In the meantime, tenants and private landlords can take steps to ensure that they are aware of their rights and responsibilities.
One of the most significant changes in the bill is the abolition of no-fault evictions under section 21 of the Housing Act 1988. This means landlords will no longer be able to evict tenants without providing a valid reason for eviction under section 8 of the act.
The change is likely to make eviction more challenging for landlords, as they will need to provide evidence of a tenant's breach of the tenancy agreement to support their case. They will need to be more careful when considering eviction, and it is likely many will seek legal advice before proceeding.
The new rules could also encourage better communication between the two parties, leading to fewer evictions overall and reducing the number of tenants forced into homelessness.
The bill also proposes to strengthen section 8 eviction grounds, giving landlords various new grounds for gaining repossession. The system will also be streamlined, making the eviction process quicker and more straightforward for landlords.
Landlords will also be required to meet new minimum standards for property maintenance and repairs under the bill, carrying out repairs within a specific time frame and ensuring that essential services such as water, heating, and electricity, are maintained to a reasonable standard as well as keeping properties safe and suitable for occupation.
The new requirements aim to improve living conditions for private rented homes and reduce the number of properties in disrepair. However, they will also place a new financial burden on landlords, who may need to invest in upgrades and maintenance to meet the standards for providing decent homes.
The bill is set to have a positive impact for tenants, who will benefit from greater security of tenure. The end of section 21 evictions means that those who are paying rent and meeting their obligations should be able to stay in their homes for longer without the fear of eviction.
This is particularly important for vulnerable tenants such as those on low incomes, who may struggle to find alternative accommodation in the PRS, and families with children who need a stable environment to thrive.
The bill also states that a tenant can request permission to keep a pet in their home and a landlord cannot reasonably withhold consent. The tenant must confirm that they have pet insurance in place.
Under the new system, tenants will also receive more notice of an impending eviction and have greater protection against retaliatory evictions. This should make it easier for them to challenge unfair evictions.
The streamlined process will provide tenants with more time to find alternative accommodation, reducing the risk of homelessness. This will also help those who have fallen behind on rent payments to negotiate with their landlords and find a solution that works for both parties.
Tenants will also have enhanced rights for maintenance and repairs under the bill, and the right to complain to the new PRS ombudsman if their landlord does not comply.
This will provide private renters with a safer and more comfortable living environment, reducing health and safety risks. It will also ensure that landlords are held accountable for their responsibilities, giving tenants more leverage to negotiate and take legal action if necessary.
The ombudsman will play a crucial role in ensuring that tenants' rights are protected under the bill. It will be responsible for handling disputes between landlords and tenants and ensuring that the former meet their legal obligations.
As a neutral third party, the ombudsman will give tenants somewhere to turn if they face issues with their landlords, and settle disputes. This will give tenants with more confidence to assert their rights and seek justice if necessary.
Landlords will need to start preparing for these changes now. This may involve reviewing their tenancy agreements and ensuring that their properties meet the new requirements for maintenance and repairs.
It is also important that they engage with their tenants and ensure that they understand the new measures and their rights under the legislation.
Private landlords can seek advice from professional bodies such as the NRLA or consult with legal professionals to help them comply with the new requirements.
Tenants can protect their rights under the bill by educating themselves on the changes and understanding their legal obligations. They should also communicate effectively with their landlords, reporting any maintenance or repair issues promptly.
There are several resources available to help landlords and tenants stay informed about the bill. The government has published guidance, while professional bodies such as the NRLA offer advice and support to their members.
Tenants also have recourse to Citizens Advice and may contact housing rights organisations such as Shelter or their local authorities for more information.
Students generally live in halls or purpose-built accommodation under a fixed-term tenancy agreement for up to 12 months, or an academic year, and so the sector differs from other private rentals.
The proposed ban on fixed-term tenancy agreements would bring student lets in line with the rest of the PRS, but doing so could cause problems for students themselves.
Periodic tenancies for students are often joint tenancies: if one quits, the tenancy ends for all others at the end of the notice period. This could make it difficult for a landlord to replace the tenants, and prompt them to leave the student letting sector, believing it would be a better plan to rent to families or professionals.
This could result in a reduction in student landlords and property, and increased competition for student lets in our already troubled housing market.
'The proposed ban on fixed-term tenancy agreements would bring student lets in line with the rest of the PRS, but doing so could cause problems for students themselves'
The government first published its wider plans for the PRS in a white paper entitled A fairer private rented sector in June 2022.
It outlined proposals to apply a Decent Homes Standard to the sector, with the aim of reducing the number of so-called non-decent rented homes by 50% by 2030.
Another aim is to make it illegal for landlords to impose blanket bans on renting to families with children or to those receiving benefits.
A new online property portal could be introduced as well, to help landlords demonstrate compliance with legal requirements. The white paper also outlined plans to end the use of rent review clauses that lock tenants into automatic rent increases.
The Renters (Reform) Bill is set to have a significant impact on the PRS in the UK. But the changes should ultimately improve the rental experience for both parties, making the sector more secure, creating decent homes and holding rogue landlords to account.
RICS supports the government's goal of improving tenants' protections and the quality of homes in the PRS. However, we remain concerned for tenants as to any knock-on effects, given that our residential market survey shows rents continuing to rise alongside the supply of rental properties dropping.
The reforms, therefore, must be implemented in such a way that gives confidence to landlords and does not result in them leaving the sector, exacerbating the challenges for tenants who are already struggling to find quality affordable homes.
Landlords have stressed to RICS that proposals must be backed by changes including an improved court process to make it easier for them to take back properties in legitimate cases.
The creation of the new property portal is also welcome in that it will provide both tenants and landlords with valuable information; however, it will require support from government to get going.
Homes of a good standard benefit all parties, and we welcome the move to improve the quality of PRS housing. However, we would like to see joined-up thinking between new energy performance certificate (EPC) measures and decent homes, so landlords can plan for the introduction of both and tenants know what to expect.
The delay in the introduction of new energy standards for the PRS demonstrates the importance of giving landlords sufficient time to prepare and undertake work.
Surveyors have a huge role to play in this area by ensuring that any standard can be applied consistently, providing reassurance for both landlords and tenants. We look forward to working with government on these issues.