What’s new in Labour’s Renters' Rights Bill?

On 11^th September, Labour introduced its new Renters' Rights Bill to Parliament. This effectively replaces the Conservatives’ Renters' (Reform) Bill, which was abandoned when the last parliament was dissolved ahead of July’s general election.

So what are the key aims and changes in this new bill, and what will they mean for landlords in England?

Aims of the Renters' Rights Bill

Labour’s overall aim is “to transform the experience of private renting” by improving the current system for the benefit of both tenants and landlords.

The main focus is on giving tenants greater security and stability in their rented homes so that they can build lives in their communities. While there are a number of proposed reforms to achieve this, the most significant is the ending of Section 21 ‘no fault’ evictions.

Key changes from the previous Renters' (Reform) Bill

Scrapping Section 21 evictions – The biggest difference here is that where the Conservatives had pledged not to move forward until the court system had been reformed, Labour intends to abolish Section 21 as soon as possible.

The concern for landlords and agents is that without a more efficient legal process in place, there could be delays to hearings and drawn-out court battles to remove tenants from properties.

Rent controls – While the previous bill limited rent rises to once a year and gave tenants the right to challenge excessive rises, Labour has gone further with protection for tenants. This bill states that:

• Rents can only be increased for existing tenancies once a year, via a Section 13 notice.
• Increases will have to align with market rates.
• For new tenancies, landlords and agents will not be allowed to accept offers above the advertised price. This is in order to prevent bidding wars that push up rents.

Decent Homes Standard: Awaab’s Law - Labour has gone further than the Conservatives in terms of health and safety improvements. While both bills include the introduction of a Decent Homes Standard for the PRS, Labour is extending Awaab’s law across from the social rented sector. This will require landlords to investigate and fix reported health hazards, such as damp and mould, within strict timeframes.

Changes will apply to all tenancies at the same time – Labour intends for all changes to be applied to both new and existing tenancies at the same time, rather than being introduced for just new tenancies initially. The expected effective date for the Bill is currently summer 2025.

Proposed changes to the eviction process

There are two key changes to the eviction process in the Bill:-

1. Most grounds for eviction will require longer notice periods. Certain grounds will require 4 months’ notice and can’t be used within the first 12 months of a tenancy, including the landlord needing to sell the property or wanting to move in themselves.
2. The rent arrears ground will now require:
   • Four, rather than two weeks’ notice
   • The tenant to be three months in arrears, up from the current two months

Although this is quite a change, good landlords, especially those that reference check tenants carefully shouldn’t worry too much. The majority of our tenants leave because they want to, it’s very rare that we ever have to evict a tenant.  

Other main changes proposed in the Bill

Several of the proposals are the same as in the Renters' (Reform) Bill, including:

• Fixed-term assured tenancies (ASTs) will be abolished and all tenancies will become periodic.
• Possession grounds will be reformed to give tenants more security, while ensuring landlords can recover their property when reasonable.
• Tenants will have the right to request permission to keep a pet, which the landlord cannot unreasonably refuse. Landlords will have the right to require pet insurance.
• A new PRS Landlord Ombudsman will be introduced.
• A landlord database will be established to track landlords and their properties, as well as any offences and penalties.
  
  

Additional changes include:

• Landlords will have to provide tenants with a written ‘Statement of Terms’, either before a tenancy begins or, in certain cases, within 28 days.
• It will be impossible to take rent for any period longer than one month – i.e. landlords will no longer be able to ask for three or six months’ rent in advance.
• It will be illegal for landlords and agents to discriminate against prospective tenants with children or in receipt of benefits.
• The maximum civil penalty for serious regulation breaches by landlords will be increased from £30,000 to £40,000.
• Rent repayment orders will be extended to superior landlords and the maximum penalty will be doubled, from 12 to 24 months’ rent.

What does the Renters’ Rights Bill mean for landlords?

Although there are a lot of changes to the way properties will be rented in the future, for good landlords that use agents who keep up to date with the laws, there will be little to fear.

We will be doing everything we can to feed into the changes, Allison Thompson, National Lettings Managing Director explains:

“The Renters’ Rights Bill introduced by the Labour government brings significant changes to the private rental market, in essence many of the initiatives included in this version of The Bill remain similar to those in the previously defunct Renters' (Reform) Bill. While many of these reforms aim to enhance tenant protections, it is crucial that the impact on landlords is carefully considered."

In view of these up and coming changes and the increased complexity of letting laws as well as the rules to ask a tenant to leave, it is more important than ever if you are a self-managing landlord, you have a good source of legal advice, or work with an agent such as ourselves. Making sure that you let a property legally and safely to a tenant is vital to avoid problems with a tenancy and large fines.