The Renters' Rights (Reform) Bill: An Overview
Introduction
The Private Rented Sector is about to experience the biggest shake up since the Housing Act 1988. Prior to the Housing Act 1988, tenancies within the private sector were ‘restrictive’ both in relation to rent levels and the ability to obtain possession. Margret Thatcher’s government liberalised the rental sector by introducing the Housing Act 1988.
The UK government’s proposed Renters' Rights Bill is a comprehensive piece of legislation that, to a degree, rows back on some of the deregulation of the Housing Act 1988 and aims to improve the security and fairness of private sector tenancies. It represents a fundamental change to the private rental sector as we know it.
While the bill has yet to receive Royal Assent, Labour’s majority means that it is unlikely to be changed much and is anticipated to become law in the summer of 2025.
The changes that the Bill will bring about represents a great opportunity for us as property professionals to demonstrate the value that we bring to our clients. This paper provides an overview of the key changes, possible implications, and the steps landlords, property managers, and stakeholders should take to prepare for the forthcoming legislation.
Here are the key elements of the bill:
Abolition of Section 21 Evictions
One of the most significant reforms is the repeal of Section 21, the notice which allows landlords to evict tenants without providing a reason. This is by far the biggest and most fundamental change to housing law seen in the UK since the Housing Acts of 1988 and 1996.
This reform aims to create more security for tenants, as they can only be evicted for specific reasons provided for by statute. Court hearings will be required in all possession claims, where landlord’s claims for possession will need to be supported by robust evidence before the Courts will grant possession.
Grounds for Possession
With the removal of Section 21, Grounds for eviction have been clarified and expanded considerably. The bill proposes the introduction of 30 specific grounds for eviction, as opposed to the current 17.
Notable mandatory grounds include:
- Ground 1 (Amended) - If the landlord or a family member wishes to move into the property, this can only be done after the tenancy has exceeded 12 months. 4 months’ prior notice must be served to the tenant.
- Ground 1A (New) - If the landlord intends to sell the property, this can only be used after the tenancy has exceeded 12 months. 4 months’ prior notice must be served to the tenant.
- Ground 8 (Amended) - If the tenant is at least three months in arrears (or 13 weeks if rent is paid weekly or fortnightly)
In the case of Ground 8, tenants will be given the right to have more time to rectify arrears if the tenancy is otherwise viable. There will also be additional protections for tenants who rely on housing benefits to pay the rent in that a landlord will not be entitled to a possession order where arrears have accrued solely as a result of a tenant’s benefits not being paid in a timely manner.
Periodic Tenancies
Under the new bill, all tenancies will be periodic by default (i.e. most terms will run from month to month). This means that tenants will no longer be locked into fixed-term agreements and will have more flexibility to end their tenancy without incurring significant penalties. There will be a minimum of 2 months’ notice required from a tenant to vacate, essentially creating a 2-month minimum term. This is expected to benefit tenants by providing greater mobility and meaning that they are not trapped in substandard conditions. There are however concerns that this may create transient communities, and short term lets through the backdoor.
This new tenancy arrangement will also place new operational responsibilities on operators, who must effectively manage potentially shorter-term arrangements.
The change to periodic tenancies is proposed for both new tenancies and existing fixed term tenancies.
Protections Against ‘Backdoor Evictions’
Tenants will be protected from rent increases that are higher than market norms, albeit there are already protections in place to prevent rent increases that are above market levels. Contractual rent increase clauses will no longer be enforceable, forcing landlords to use the statutory section 13 rent increase process. Tenants will have the right to challenge any rent increases through the First Tier Tribunal (FTT). As a result, rent increases will be capped at what the FTT determines to be the market rent.
Furthermore, tenants will be able to challenge the rent set within 6 months of the start of the initial tenancy.
It is also worthy to note that when a tenant challenges any rent increase through the FTT, the rent is only increased (to the market rate set by the FTT) at determination. It is not known how long that process could take, and it is likely the FTT will become overwhelmed very quickly with the introduction of this new legislation, meaning that landlords will have to wait for potentially significant amount of time before any new rent is set.
There are also concerns around how the FTT are assessing and setting market rents, and that too is unknown at this stage.
Finally, tenants will get a ‘free shot’ at the assessment in that landlords will not be able to recover costs of any FTT assessments.
Private Rented Sector Ombudsman
There will be a new Ombudsman which will provide a fair, impartial, and binding resolution for complaints. All Landlords will be required to be a member of this Ombudsman independently from their managing agent.
Private Rented Sector Database
A new Private Sector Database will be established to track properties in the rental market. Landlords must register each of their properties, and the database will need to contain essential information such as the EPC, EICR and GSR certificates, to demonstrate that all rented sector properties meet the new Decent Homes Standard. The database will be publicly accessible, enabling tenants to check the compliance status of their rental property. Local authorities will be responsible for enforcing compliance with the power to impose substantial fines for non-compliance. And tenants will have the right to apply for rent repayment orders in cases of non-compliance.
If a landlord has not registered their property and complied with the requirements of the Database, possession proceedings would fail, and the Courts would not grant possession.
Pet Rights
Another major change is the inclusion of a statutory right for tenants to request permission to keep pets in rental properties. Landlords will have a legal obligation not to unreasonably refuse such requests but can impose conditions such as a recoverable fee for pet insurance to cover any potential damage to the property. This provision reflects what is already standard in the Build to Rent space although the introduction of pet insurance is new (Note, The Tenant Fees Act 2019 is being amended to reflect this change so landlords can lawfully require insurance to be obtained by the tenant).
Decent Homes Standard and Awaab’s Law
The bill further mandates the application of a Decent Homes Standard, to ensure rented properties are safe and well-maintained. Landlords will be required to address serious hazards (e.g., mould or unsafe living conditions) within strict and specified timeframes.
The introduction of a Decent Homes Standard somewhat mirrors the already existing Housing Health and Safety Rating System (England) Regulations 2005 (HHSRS), which is a scoring system that is used by local authorities to assess the effect of certain hazards on the health, safety and wellbeing of the occupants. Environmental Health officers have the power to take action to remedy any hazards to ensure homes are safe to live in.
It is assumed that the Decent Homes Standard and Awaab’s Law will expand upon the HHSRS and go further to make renting out homes that are unsafe and unfit for habitation a criminal offence.
Ban on Discrimination
It will be illegal for landlords or agents to discriminate against tenants based on receipt of benefits or having children. Again, this is mostly commonplace for professional landlords and operators.
Prohibition of Rental Bidding
Rental advertising must clearly display the rent amount and landlords and agents will no longer be allowed to ask for or accept offers above the advertised rent, aiming to eliminate the practice of rental bidding.
Prohibition on Rent in Advance
The Tenant Fees Act 2019 will be amended to prohibit landlords or letting agents from requiring or accepting any payment of rent in advance. To be clear, this means a tenancy will be legally binding before any amount of rent is paid, and access to the property cannot be withheld if rent is not received.
In addition, Landlords will only be able to accept up to one month’s rent (or 28 days’ rent for tenancies with rental periods of less than one month) only once a tenancy agreement has been signed. Tenants can choose to pay more than one month’s rent after the first month, however it cannot be requested by the Landlord, or a condition of the tenancy.
Stronger Local Authority Enforcement
The bill expands civil penalties and investigatory powers for local authorities, requiring them to report on enforcement activities and ensure better compliance. The Government have suggested that investment will be made in this area, as enforcement bodies are already overwhelmed.
Rent Repayment Orders
The maximum penalty for rent repayment orders will be doubled and repeat offenders will face higher penalties.
Potential Exemptions for Purpose Built Student Accommodation
An amendment has been suggested that would exempt Purpose Built Student Accommodation from local authority licensing. The amendment would ensure code-compliant PBSA is not subject to the onerous administrative and financial burdens of local authority licensing.
Interestingly, the same amendment has not been suggested for the Built to Rent sector.
Implementation and Next Steps for Landlords and Property Managers
Transition to New System
The new tenancy system will be implemented simultaneously in one go, converting all existing tenancies to the new periodic system and ending Section 21 evictions immediately when introduced. The government have said that they will provide sufficient notice to ensure a smooth transition, but that period is currently unknown.
Identifying risk with existing tenancies
A significant number of existing tenancies will be based on residents paying their rent in advance, particularly international students. Once the bill is implemented, any contractual conditions of paying rent in advance will be unenforceable. This may create significant risk of arrears in these cases.
Staff Education and Training
Operators will need to provide a comprehensive training programme to all staff so that they fully understand the new law and can effectively manage the new requirements. Staff must be further educated on tenant rights, grounds for eviction, rent increase protocols, and how to comply with new registration requirements of the Private Sector Database and Decent Homes Standard.
Record Keeping and Documentation
A significant shift will be the increased emphasis on detailed record-keeping. Operators must robustly track tenancy periods, rent payments, communication with tenants regarding eviction grounds or pet requests, and notices of rent increases.
A library of new processes, policies and procedures will be required, together with a suite of new Tenancy Agreements.
The Written Statement of Terms
Government will also introduce a new ‘Written Statement of Terms’ which will include key details such as the landlord’s intention to rely on grounds for possession and the rights of both the tenant and landlord, and which must be issued before the start of the tenancy.
It is unknown what format this will take, and further detail is required from Government in relation to the details.
Conclusion
The proposed tenancy law reforms mark a major shift in the private rental sector, offering greater protections for tenants while placing new operational and financial responsibilities on landlords. The introduction of periodic tenancies, increased grounds for eviction, the right to request pets, and rent increase controls will require significant adjustments from landlords and operators. While the full impact of these changes will become clearer once the bill receives Royal Assent, landlords and operators must begin preparing now by reviewing current practices, updating policies, and training staff to ensure compliance. By proactively addressing these changes, landlords can navigate the evolving landscape of the rental market and continue to provide safe and secure housing for tenants.
What are we doing?
A dedicated RRB Task Force has been established, meeting regularly with a structured agenda to ensure a clear and effective approach to implementing required changes.
A thorough review of current processes is underway, ensuring they align with the latest iteration of legislation. The team is systematically mapping required changes and identifying areas that need updates or refinements to remain compliant with the evolving regulatory framework.
Engagement with third-party providers, systems, and referencing partners is ongoing to assess the suitability of current technology and processes. Meetings and discussions are being held to ensure that all external systems are fit for purpose and can seamlessly support the proposed legislative changes.
A structured training and communication plan is being developed to ensure a smooth transition. This includes rolling out training sessions for staff, providing regular updates to clients, and keeping internal teams informed about the latest developments to ensure consistency and compliance across the board.
We support the majority of the proposed legislation, as it represents a step towards creating a fairer and more balanced industry. However, we recognise that implementing these changes will present significant challenges, particularly in terms of practical application and industry-wide adaptation. To ensure a smooth and effective transition, it is essential that the government provides adequate support and resources. This includes delivering on commitments to improve court and tribunal processes, as well as ensuring that local authorities are sufficiently equipped to manage their expanded responsibilities. Without these critical reforms and infrastructure improvements, the intended benefits of the legislation may not be fully realised in practice.