Following its publication on 11 September 2024, the Renters’ Rights Bill ("the Bill") has already received first hearing and looks set to become law before the new year.

Whilst we can be reasonably confident that it will be amended before then, we now have more detail about how the government intends to reshape the private rented sector in England. 

There remain similarities with the previous government's Renters (Reform) Bill but there are some key differences.  We take a look at those below and provide comment on how landlords and tenants alike may be affected when the new legislation becomes law.

Abolishing Section 21 ‘no fault’ evictions

• It is now clear that this will be achieved by ending assured shorthold tenancies (“ASTs”) and instead creating periodic assured tenancies without fixed terms.  This will allow tenants to remain in occupation until a landlord has proper grounds for possession (e.g. if there are rent arrears or the tenant is causing a nuisance) or until tenants serve two months’ notice, which they will be able to do at any time during a tenancy.
• Crucially, the Bill contains no transitional provisions for existing ASTs.  This means that existing ASTs in the private sector, regardless of whether they are still in their fixed terms, will become periodic assured tenancies on a prescribed date unless possession proceedings in relation to the AST have already been issued. This date is likely to be shortly after the Bill comes into force. Landlords would be wise to review their PRS portfolios now.

Removing the threat of arbitrary evictions and increasing tenant security and stability 

• New and expanded possession grounds will be introduced to try to ensure that landlords can reclaim their properties when they need to.  As with the previous Renters (Reform) Bill these grounds include where the landlord wishes to sell the relevant property or they (or a family member) wish to live in the relevant property.  Both of these grounds will require four months’ notice to be given and neither will be able to be exercised in the first 12 months of a tenancy. 
• Additionally, if notice is served on the basis of either of these grounds, landlords will be restricted from re-marketing or re-letting the property from the date of service of the notice and for 12 months from the date of expiry of the notice (or 2 months from the date of the particulars of claim if possession proceedings are issued).  Non-compliance will be subject to a potential fine of up to £7,000 so, again, landlords need to properly assess their portfolio and long terms property requirements now.
• Four weeks' notice will need to be given if landlords cite ground 8 as reason to seek possession. There will need to be three months' worth of arrears at the date of service of the possession notice and at the possession hearing (rather than the current two).
• Except in a case where grounds 7A (antisocial behaviour) and/or 14 (nuisance) have been made out, no possession order will be made where the deposit protection requirements have not been complied with or the landlord has failed to register the property on the new private rental sector database.  There is no similar restriction (as there is currently) where gas safety certificates, EPCs and/or how to rent guides have not been served.
• Tenants may give two months’ notice to end a tenancy at any time during their occupation. This effectively ends the need for tenants’ break clauses and is something that landlords will need to be mindful of.
• Whereas illegal eviction pursuant to Section 1 of the Protection from Eviction Act 1977 is currently a criminal offence, under the Bill landlords can be subject to civil penalties by the Local Authority of up to £40,000. It hoped this will limit the costs to both parties of dealing with criminal proceedings.

Rent Increases

• All rental increases will be made using the same process.  Rent review clauses will be banned and, instead, landlords will be able to increase rents once per year to the market rate – i.e. the price that would be achieved if the property was newly advertised to let. To do this, they will need to serve a “section 13” notice, setting out the new rent and giving at least two months’ notice of it taking effect. 
• Tenants will then be able to challenge proposed increases in the First-tier Tribunal which will decide what the market rent should be.  This will not be more than the rate initially proposed by the landlord, cannot be backdated and can be deferred for up to two months in cases of undue hardship.
• Additionally, landlords and agents will no longer be able to ask for or accept offers above the advertised rent.  They will be required to publish an asking rent and it will be illegal to accept offers made above this rate.

Pets

• Tenants will be able to request keeping a pet in the property.  Landlords must consider such requests and cannot unreasonably refuse them.  They will, however, be able to require that pet insurance is taken out by the tenant to cover any damage caused to their property by the animal.

Standard of homes

• The Decent Homes Standard will be applied to the private rented sector for the first time. It is intended that the Housing Act 2004 will be amended to allow the Secretary of State (currently Angela Rayner) to set standards of repair, heating and safety, security and comfort provision so that Local Authorities can take action where there are issues.
• “Awaab’s Law” will also apply to the private sector for the first time and will set clear legal expectations about the timeframes within which landlords must take action to make homes safe where they are found to contain serious hazards.
• In addition to the above, as part of the additional regulation and dispute management processes being introduced by the Bill, there will be a PRS database (register) and a PRS Landlord Ombudsman will also be set up. Landlords of assured and regulated tenancies will be required by law to register themselves and their properties on the database and join the Ombudsman scheme which will allow tenants to bring complaints against landlords.

With so many changes on the horizon for those living in or renting out homes in the private rental sector in England there is a lot to consider for landlords and tenants alike.  Whilst we anticipate that the Bill will change before coming in law as it passes through Parliament, you should carefully consider your rental requirements for the coming years now and act early. 

Forsters is on hand to answer any queries about the Bill and to provide you with updates and advice in this area, including a detailed review of your existing tenancy precedents and renewals processes.