How Will the Renters Reform Bill Affect Landlords and Tenants?

How Will the Renters Reform Bill Affect Landlords and Tenants?

On 17th May 2023, the UK government introduced the Renters Reform Bill, seeking to address issues in the private rental housing market. Amidst a cost of living crisis and a shortage of available rental properties, the cost of rents is rising and tenants are battling immense competition to secure homes. The Renters Reform Bill looks to give tenants more rights over their living situations and prevent private sector landlords from unnecessary stipulations and failing to meet basic standards of living.

What Have Been the Issues in the Private Rental Market?

The shortage of available rental properties has allowed landlords to be pickier over who they allow to rent their homes, resulting in an unfair situation where potential tenants can neither buy their own property nor rent one. Stipulations declaring that tenants may not rent their properties if they are claiming benefits, have children or pets dramatically reduces the available properties and leaves renters in precarious positions.

Tenants have also lived with the threat of so-called 'no-fault' or Section 21 evictions. Under the 1988 Housing Act, landlords have retained the power to evict tenants and repossess the property even if a tenant has behaved impeccably.

This lack of security for tenants has played into the hands of unscrupulous landlords. If the standard of living has not been up to scratch and tenants have raised concerns, the threat of a Section 21 eviction has allowed these types of landlords to ignore maintenance issues, leaving tenants living in poor conditions.

How Does the Renters Reform Bill Address These Problems?

The difficulties that tenants have had to face in recent years have led the government to introduce a bill which offers them further protection.

The Decent Homes Standard

Recognising that every tenant has the right to live in a well-maintained property, the Renters Reform Bill has introduced the Decent Homes Standard. This minimum standard of living requires all properties to be properly heated and insulated, as well as equipped with reasonably modern facilities.

This emphasis on decent living standards feeds into the government's 'Levelling Up Mission', their aim to halve the number of unsuitable rental properties by 2030.

Bans on certain types of tenant are now against the law

Blanket bans on tenant who claim benefits, have children or pets are no longer enforceable. This gives tenants access to a greater selection of housing and eases the pressure of intense competition for a small number of properties.

Abolishment of Section 21 evictions

With the removal of Section 21 evictions, tenants will now have more security and more power to challenge landlords on inadequate living conditions. Tenants can now breathe easier, knowing that they can bring issues to landlords' attention without fearing that they could be evicted.

More financial security

Under the new bill, landlords are now only permitted to raise rental costs once per year. In addition, notice periods have been extended from one month to two, allowing renters to find a cheaper property if they can't afford the increase.

Are There Any Concerns About the Renters Reform Bill?

The bill has received mixed feedback. While an overhaul of housing regulations was necessary to afford more protection to tenants, the government has been accused of penalising landlords. The changes to regulations may have knock-on effects that impact the rental market.

The cost of some rental properties may have to increase to allow landlords to meet the required Decent Homes Standard. Furthermore, landlords may have concerns over being able to evict tenants who display anti-social behaviour, damage the property or persistently miss rental payments. The government has indicated that it will give responsible landlords more power to evict troublesome tenants but it is unclear how this will be achieved.

It is possible that some landlords could feel some trepidation over these changes and decide to sell their properties, further contributing to the national shortage of rental homes.

The Renters Reform Bill is designed to give tenants more rights and security and these changes in the regulations are long overdue. However, it is hoped that landlords will also have confidence in the new legislation and that it will ideally protect the interests of model tenants and responsible landlords.

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Image is from St Georges Drive, London, which was available for rent in May 2023..

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