Hailed as “the biggest change to the private rental sector for a generation”, the Renters’ Reform Bill – first proposed in April 2019 – aims to transform the private rented sector and improve rental property standards.
Since its introduction to Parliament in April 2019, it has been making slow progress through the House of Commons. During this time, MPs have discussed and debated various points. They have also suggested making changes to some of the proposals.
Here are some of the ideas that featured in the original draft:
- An end to Assured Shorthold Tenancy Agreements.
- The abolition of ‘no-fault’ evictions (Section 21) Revisions to Section 8 (landlords’ grounds for possession)
- A new landlords’ register and the creation of an ombudsman service
- A rental property portal with links to local authorities
- New laws making it easier for pet owners to keep pets in rented accommodation.
On 1st May, the Bill went to the House of Lords, where it will go through further stages before it can become law. There have been some heated arguments over the final shape of the Bill, but nothing can be confirmed until it has completed its route through both parliamentary houses.
Understandably, landlords, letting agents and tenants are eager to know the final outcome. Meanwhile, our Ilford letting agents have joined forces with our letting agents in Wanstead to provide an update on the latest twists and turns in the Bill’s journey so far.
So, will property values continue to rise? In their latest survey, business and consumer confidence experts GfK found that consumers’ confidence in their personal finances has hit the highest level in two years. At the same time, Zoopla has detected ‘improving sentiment’ in the housing market based on a stable employment market and faster wage growth.
No one can accurately predict what will happen to prices in the next few months. However a wide range of trusted sources have indicated positive progress for the UK housing market. Given the latest figures, earlier predictions that prices would continue to drop in 2024 may be in line for revision.
Changes to “no fault’ eviction plans
This has been one of the hotly contested items in the recent parliamentary debate.
Currently, a landlord can give notice to a tenant to quit their property without giving a reason. This is known as a ‘no fault’ eviction, as outlined in Section 21 of the 1988 Housing Act. Under the new proposals, a landlord would only be able to evict their tenant if the reason for giving notice was defined by law: for instance, if the landlord wanted to sell up or needed to move into the property themselves.
So what has changed? The government still intends to go ahead with the abolition of Section 21. However, we can expect long delays before the law can be implemented, as the county courts don’t have the capacity to deal with the expected boom in possession cases. MPs have insisted that the courts must be ready before ‘no fault’ evictions can be banned, and that could take years.
Are Assured Shorthold Tenancy agreements still going to end?
The Bill includes plans to eliminate Assured Shorthold Tenancy agreements (ASTs). Under the new laws, when an AST comes to the end of its term, it will roll over to become a periodic tenancy, with no fixed end date.
While the plan to end ASTs hasn’t changed, MPs have closed a loophole whereby tenants were able to give two months’ notice within the first four months of a new tenancy. This amendment has effectively created a six-month period during which tenants won’t be able to serve notice. Exceptions include cases of domestic violence, death of a tenant or a serious issue that the landlord fails to fix.
If ASTs are phased out, the law regarding rent rises will remain as it is for statutory periodic tenancies today: only one rent increase per year (with two months’ notice given). But the downside for tenants is that they will lose the ability to negotiate longer fixed term tenancies, which currently offer some protection from market-led rent rises.
Housing Minister Jacob Young has promised to review the results of abolishing ASTs: “Removing fixed term tenancies is a significant change, and government will commit to publishing a report on the system within 18 months to ensure the system works.”
Are any other changes planned?
Several other issues have been considered, including:
- Increased protections for student accommodation to reflect the seasonal nature of student lettings. This ensures that there will be enough housing available for students when they need it.
- When tenants ask to keep a pet, landlords must provide a decision in writing within 28 days of receiving the request. The landlord can’t revoke their permission once it has been granted.
- Last month it was suggested that council landlord licensing schemes should be reviewed to avoid any possible duplication with the landlord letting portal.
- A new law has been proposed to prevent landlords from banning benefit claimants or tenants with children.
What happens now?
The Bill must receive Royal Assent before it becomes law, but it’s unlikely that stage will be reached until October or November this year.
Our letting agents are constantly looking out for news that might affect landlords and tenants, and we’ll update you as soon as we hear. Meanwhile, why not get in touch if you are looking for a great investment property or an ideal home to rent?
Give us a call at 0203 972 7341 or email info@oaklandestates.co.uk.
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