The Renters’ Rights Bill is here!! After being elected on a manifesto committing to private renting reform, legislation promising to do this has now been introduced as the bill had its first reading in the House of Commons yesterday – the first step to it becoming law. The government prioritising this legislation in its first term is a huge win for the renters’ rights movement. But what will the bill actually mean for private renters?
We have been delving into the details to find out and identify where this legislation differs from the previous government’s failed attempt, the Renters (Reform) Bill.
A new tenancy system:
The flagship reform of the Renters’ Rights Bill is the abolition of section 21 no-fault evictions – a leading cause of homelessness and a hard-won commitment from renters' campaign groups that was never followed through by the previous government. Alongside this, the bill introduces periodic tenancies making tenancies indefinite, replacing the current system where renters initially sign a contract for a fixed amount of time. This means renters will be able to give two months' notice to leave when they want or need to and will no longer be contracted to stay in unfit, unsafe housing or forced to continue paying rent when life circumstances change.
The government says that this new system will come into force in one stage shortly after the bill has completed all its parliamentary stages for all new and existing tenancies. This is good news and something we have been pushing for ever since the previous government wrote an indefinite delay on abolishing section 21 into the previous Renters (Reform) Bill.
There will still be some no-fault reasons under the new system that a landlord can evict a renter for e.g. if they are selling or moving in (known as eviction grounds), so it is vital that proper safeguards are in place to make sure these are not falsely or unjustly used, and that when they are used, harm to the tenant is minimised.
So, what safeguards have been put in the Renters’ Rights Bill? We welcome the introduction of a 12-month protected period during which landlords cannot use the new no-fault eviction grounds from when a tenancy starts. This is a significant improvement on the Renters (Reform) Bill which only required six months. When a no-fault eviction is taking place, landlords are required to give a four month notice period before evicting someone, doubling the two-month period in our current system giving renters more time to save for a deposit and find a new home. Raising the notice period was one of our key asks and a welcome change from the Renters (Reform) Bill which was set to maintain the status quo.
To prevent landlords from evicting renters under false pretenses (e.g. claiming they are moving in or selling the property, only to re-list it for rent at a higher price), landlords will be prohibited from listing the home that they have evicted someone from for 12 months after an eviction – a considerable increase from the three-month ban in the Renters (Reform) Bill, which we were concerned could have been easily exploited by landlords.
Having pushed for the protected period, notice period, and no let period to be longer throughout the Renters’ (Reform) Bill’s existence, we are pleased that the Renters’ Rights Bill has taken the need for stronger safeguards into account. However, the bill does not specify what evidence landlords must provide to prove they are genuinely moving in or selling. The guide to the legislation says that the courts ‘are best placed to determine’ what kind of evidence is needed so we will be keeping a keen eye to make sure that the required evidence is watertight to prevent these grounds from being abused.
We are also pleased to see that some particularly problematic aspects of the Renters (Reform) Bill have not stayed in this new legislation, such as the broadening of the antisocial behavior eviction grounds. However, we remain concerned that some of the new grounds are ‘mandatory’, including if the landlord wants to sell or move in or if the tenant has missed three months rent (although this is more lenient than 2 months which was the previous situation). This means that in these circumstances an eviction can take place without any room to consider a tenant’s current or future situation, removing the ability for a judge to take all factors into account. Whilst most people move out upon receiving an eviction notice, we believe that if a case does reach Court, a judge should always be able to take all factors into account, to deny an eviction if that would be the fairest course of action, or postpone or suspend a possession order (delaying when the eviction takes place) where there are compelling reasons to do so. Therefore, we will keep pushing for all grounds to be ‘discretionary’, giving the household being evicted the right to have a judge make an informed decision about whether an eviction should go ahead.
Renters will also have the right to request a pet. The landlord will not be able to unreasonably refuse this request and the timeline for when an answer must be given has been reduced from 42 days in the Conservative’s bill to 28 days. The legislation does mean that the tenant may have to pay more for insurance which we argue is unnecessary given deposits are already in place to cover any damage.
Affordability:
The bill will end the practice of rental bidding wars by requiring landlords and letting agents to publish an asking rent and banning them from asking for, encouraging or accepting a bid above this price (read more about the importance of this here). This is an improvement from earlier reports that “voluntary bidding” would still be allowed which would have meant bidding wars remained in practice. We are glad our warnings were taken into account.
However, the legislation falls short of truly addressing the affordability crisis. Although landlords will be limited to raising rents once a year to “market rate” and will no longer be allowed to write rent increases into contracts, this still allows rents to rise faster than wages and unaffordable hikes will continue to serve as an eviction notice for many.
If a household receives an increase which they feel is unfair, they will be able to challenge it in a tribunal process. A positive change is that the tribunal will no longer be able to determine a higher rent than proposed by the landlord, an issue in the Renters (Reform) Bill. However, using market rents (how current listings are priced) as a benchmark for fairness allows unaffordable rents to keep rising.
Our view is that the best way to stop renters being evicted by unfair rent hikes is a cap to in-tenancy rent increases at the lowest of inflation or wage growth.
We are clear though, that despite this being an essential protection to improve security, it won’t solve affordability alone. Renters must have basic protections and security in their homes and this bill goes some way to achieving that. The next task will be to address the soaring rents making life miserable for so many.
Accessibility:
The Renters’ Rights Bill will abolish blanket bans on applications from tenants with children or those in receipt of benefits. Whilst this is welcome, the £7,000 fine for being found to have discriminated, a marginal increase from the £5,000 under the previous bill, is too low and will not be a strong enough deterrent for many landlords. We are also worried that how discrimination is proved remains unchanged from the previous bill, as the landlord must have been found to have intended to discriminate rather than focusing on whether their actions had a discriminatory effect. This will be incredibly difficult to prove and risks allowing subtle forms of discrimination to continue. We will keep pushing to make sure ending this discriminatory practice is as effective as possible.
Disappointingly, there is also nothing in the bill limiting circumstances for when a guarantor can be requested or limiting the rent that can be requested up front. Both of these common practices mean many people are often excluded from finding a suitable rented home, especially migrants or those from lower socio-economic backgrounds who either cannot find a British homeowner guarantor or are unable provide the rent in advance. There is also little on ensuring privately rented homes are accessible to disabled renters. We will be making the case for why these provisions are essential to creating a truly fair system for private renters.
Quality and enforcement:
The bill is set to make significant changes to how standards are upheld in private renting, bringing the Decent Homes Standard that currently exists for socially rented homes to private renting for the first time and introducing Awaab’s Law to the private rented sector. Awaab’s law was initially introduced into to social housing after two year old Awaab Ishak died from mould exposure that had been reported multiple times. The law will require landlords or agents to carry out crucial repairs within a specified time period. The previous government wanted to limit this to social housing so this is a welcome move given private renting has some of the worst quality homes. What the timelines are exactly will be decided after the bill has come into force.
The government has also committed to making privately rented homes meet minimum energy efficiency standards by 2030. This is warmly welcome (excuse the pun) given these commitments were ditched by Rishi Sunak’s administration, although we will be pushing to make sure that any improvements do not jeopradise renters security in their homes. The government has confirmed this will start with a consultation process.
The legislation will bring in a Private Rented Sector Database, which will include a landlord register. This database, will allow renters to access necessary information in relation to their landlord (or prospective landlord) and details of the property, helping to inform decisions before starting a tenancy and checking compliance throughout. A big win is that landlords will have to be registered to this to be able to evict someone, protecting against eviction if the landlord has not been compliant, we are pleased to see that this loophole in the previous legislation has been closed.
There will also be a redress scheme which landlords and letting agents must subscribe to and which you can complain to if you have been mistreated. This will provide an independent investigation and result for current, past and prospective tenants if they have made a complaint. If the investigation finds the landlord has been at fault there will be a financial penalty of up to £40,000 or potential criminal prosecution. It is also really encouraging that the bill will extend where Rent Repayment Orders can be used to ‘new offences in the bill’, giving renters the right to reclaim rent when the landlord has not upheld their responsibilities. The amount of rent that can be claimed for offences has also been doubled to two years’ worth of rent and repeat offenders will have to pay the maximum amount. If done right, these measures have huge potential to improve standards and enforcement for private renters.
The verdict?
Overall, the Renters’ Rights Bill is clearly a stronger piece of legislation than the previous government’s Renters (Reform) Bill. However, there is still a lot of work to be done. We will continue pushing for changes where the Bill needs strengthening as it goes through each parliamentary stage and making sure renters’ voices are heard throughout.
Author: Rosie Dutch, Campaigns and Partnerships Officer
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