The Renters’ Rights Bill: What are the Government’s plans for the private rented sector?

On 11 September 2024, the Government introduced the Renters’ Rights Bill aimed at reforming the private rented sector. This is the first step in what is likely to be an overhaul of housing policy, a key concern for voters in the last election, and something which will be at the forefront of the Government’s agenda in the coming years.

The Bill encompasses a wide range of reforms designed to give renters greater security and stability in the long term in order to make renting more affordable, to enable renters to stay in their homes for longer, and to mitigate against the risk of homelessness.

The Renters’ Rights Bill proposes to implement a series of reforms, with the ten most important to consider as follows:

1. Abolish Section 21 evictions

Often referred to as ‘no fault’ evictions, Section 21 of the Housing Act 1988 allows a landlord to begin the process of ending a tenancy and permits a landlord to apply to the Court to evict a tenant after giving two months’ notice. Under the current rules, the landlord does not need a reason for the eviction and can give notice of its intention to evict at any point during the tenancy. A ban on ‘no fault’ evictions was first proposed by Michael Gove during the last Conservative Government, but it ran out of time to progress through parliament before the July election. There were also significant concerns raised within the Conservative party about the impact this would have on Landlords, as well as the potential effect this could have on the Courts, potentially causing increased delays if the Courts were asked to determine what is or is not a valid reason. The new Labour Government proposals go much further than the previous Government’s plans, with the Bill proposing to:

• Ban Section 21 evictions for both new and existing tenancies
• Give tenants the right to end the tenancy by giving 2 months’ notice to the landlord of their intention to do so; and
• Give tenants the benefit of a 12-month protected period at the beginning of a tenancy, during which landlords cannot evict, move in, or sell the property.

2. Ensure possession grounds are fair to both parties

The proposals outline a wide variety of mandatory grounds for possession with different notice periods required depending on the ground being relied upon.

By way of example:

• If the landlord wished to move into the property or to sell the property, this would likely fall under grounds 1 or 2 and require a notice period to be given of at least 4 months.
• If the tenant has at least 3 months’ rent arrears both at the time notice is served, and at the time of the possession hearing, this would likely fall under ground 8 and require a notice period of 4 weeks.
• If the tenancy was granted due to a false statement made knowingly or recklessly by the tenant, this would likely fall under ground 4 and require a notice period of just 2 weeks.
• If a tenant has been convicted of a criminal offence or has breached an Order to prevent anti-social behaviour, this would fall under ground 7A and the landlord could begin possession proceedings immediately.

3. Provide stronger protections against backdoor evictions

The Bill proposes giving powers to private rented sector tenants to challenge what is perceived as ‘unreasonable rent increases’ used as a backdoor method of eviction. Under the new proposals, a landlord will only be able to increase rents once per year to the market rate, which will need to be done by way of serving a section 13 notice setting out the new rent and providing at least 2 months’ notice of the proposed increase. If the tenant believes that the rent proposed exceeds the market rate, they will be able to challenge it at the first-tier tribunal who will have the ability to determine what the market rent should be.

4. Introduce a new Landlord Ombudsman for the Private Rented Sector

As part of the reforms, the Government is planning to introduce a new ombudsman service which all private landlords with assured or regulated tenancies will be legally required to join. This will include landlords who use a managing agent to administer the property. A tenant will be able to use the ombudsman service free of charge to complain about a landlord’s actions or behaviours and the ombudsman will be able to offer a binding resolution for tenants, with powers to compel a landlord to issue an apology, provide specified information, take remedial action or pay compensation. Local councils will be able to take action against landlords who fail to join, and issue penalties of up to £7,000 for initial breaches, and up to £40,000 or criminal prosecution for continued or repeated breaches.

5. Create a Private Rented Sector Database

The proposals plan to create a new private rented sector database which all landlords of assured and regulated tenancies will be legally required to be registered with.

For landlords, the database will give them access to relevant guidance; help them to understand their obligations and responsibilities; help them to demonstrate compliance with the requirements; and will be used to communicate any changes to the rules which may develop over time.

For tenants, the database will increase transparency; help them to take effective action to enforce their rights; and help them to report any issues with their property to the council or to the ombudsman.

For councils, the database will provide valuable data about the private rented sector; reduce the administrative burden of identifying landlords; and increase the efficiency and effectiveness of enforcement against non-compliance.

6. Give tenants strengthened rights to request a pet in the property

The Bill introduces proposals aimed at preventing landlords from unreasonably withholding consent when a tenant requests to keep a pet in their home and gives the tenant the power to challenge unfair decisions. In return, landlords will be able to require the tenant has insurance to cover any pet damage. The responsibility for preventing and resolving any damage caused by a pet will be with the tenant.

7. Apply the Decent Homes Standard to the private rented sector

The proposals plan to create a ‘decent homes standard’ to ensure privately rented homes are safe and decent to live in. The standard will set out requirements for minimum standards to be met for private rented sector homes and will provide councils with effective powers to enforce compliance.

8. Apply ‘Awaab’s Law’ to the private rented sector

After a public and media outcry following the death of Awaab Ishak, a 2-year-old who died as a result of prolonged exposure to mould in a social rented home, the previous Government introduced requirements for landlords to swifty address damp and mould conditions for social housing through the Social Housing (Regulation) Act 2023. The new Bill plans to extend these requirements so that they will apply to all privately rented homes in addition to social housing. If landlords fail to comply, tenants will be able to bring enforcement action against them through the Courts.

9. Prohibit rental discrimination

The new Government believes the current system has allowed for some landlords to discriminate against certain types of ‘undesirable’ tenants, particularly in relation to families with children or people who receive benefits. The new Bill plans to introduce proposals to prevent such discrimination from taking place and will address practices such as ‘No DSS’ adverts and other situations where landlords or letting agents filter against certain types of people entering into a tenancy. Landlords will still be able to carry out referencing checks to make sure prospective tenancies are sustainable, but this will be based on affordability, not on the basis of other potentially discriminatory factors.

10. End the practice of rental bidding

The current system is believed to allow for landlords to create bidding wars by pitting prospective renters against each other, which artificially drives up the price of the tenancy. The new proposals plan to prevent this practice by requiring landlords and letting agents to publish an asking rent for their property in advance, and by prohibiting them from encouraging or accepting any bids above the published asking price.

A copy of the new Governments’ published Renters’ Rights Bill can be found here: Renters' Rights Bill (parliament.uk).

A detailed guide explaining all of the proposals outlined in the Bill can be found here: Guide to the Renters’ Rights Bill - GOV.UK (www.gov.uk).

It is important to remember that this is a new Bill at the start of its journey, setting out the Government’s aims and ambitions for reform in the private rented sector. However, it may well be subject to change as the Bill makes its way through Parliament and it is entirely possible that some of the proposals will be amended, modified, watered down, or enhanced as the Bill comes under scrutiny. The Bill should therefore not be taken verbatim as a guarantee of what will happen, but rather as a rough indication of what the key priorities are and how the Government is looking to reform the private rented sector.

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be. If you would like a conversation to find out how we might help you, please get in touch.