Should Landlords Fear the Renters (Reform) Bill?

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The Renters (Reform) Bill is the long-awaited legislation currently making its way through parliament intended to make significant changes to the private rented sector in England. The bill has been met with mixed reactions from landlords, with many expressing significant concerns.

One of the key changes proposed by the bill is the abolition of Section 21 evictions. Section 21 (of the Housing Act 1988) is the no-fault eviction process that allows landlords to evict tenants at the end of the tenancy without giving a reason.

Under the new legislation, fixed term tenancies will be abolished and replaced by rolling monthly tenancies with no specified end date. The landlord cannot bring the tenancy to an end unless one of the limited grounds for possession applies.

Although new mandatory grounds for possession are included in the bill, for example, for persistent late payment of rent or where the landlord wants to sell the property, in practice, under the existing system, many landlords opted to use the Section 21 process because of its simplicity and certainty. The abolition of Section 21 will make it more difficult for many landlords to evict tenants, which some landlords believe could lead to an increase in rent arrears and anti-social behaviour.

Other key changes proposed by the bill are the introduction of a new property portal and a compulsory ombudsman redress scheme. The property portal will be a database of all landlords and properties in the private rented sector. This will make it easier for tenants to find information about their landlords and may include details such as previous complaints against them. The ombudsman scheme will give tenants a no cost redress procedure for complaints about their property or landlord.

The bill also proposes changes to the way landlords can increase rent. Under the new proposals, rent increase clauses in the tenancy will no longer be valid. The landlord will only be able to increase rent every 12 months by giving a minimum of two months' notice and to a ‘market rent’ that can be challenged by the tenant through the First-tier Tribunal.

In conclusion, whilst the final detail is yet to be decided, the Renters Reform Bill places tenant rights at the forefront of housing policy, aiming to provide security, stability, and improved living conditions. In an already heavily regulated industry, many landlords fear that the reforms will increase the amount of red tape they have to deal with as well as limiting their ability to recover possession quickly and cost effectively and keeping pace with inflationary costs through rent increases.

The abolition of the section 21 notice procedure will no doubt make things more difficult for landlords. However, the bill does introduce new grounds that landlords can use to evict tenants, and seeks to make it easier for landlords to evict tenants when rent is unpaid or there is a breach of the tenancy. However, it remains to be seen how courts apply these rules and therefore only time will tell whether these measures are sufficient to give landlords adequate power to evict undesirable tenants who they might otherwise have dealt with via section 21. 

If you have any questions after reading this article or if we can help in any way please click here to contact a member of our Landlord & Tenant Compliance and Disputes team. 

Paul Walshe

Partner, Litigation

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