Rental Reforms – Should Landlords Consider Rent Increases & Evictions Now Before The New Rules Come Into Force?

The Renters (Reform) Bill was introduced to Parliament on 17^th May 2023 with the principal aim to provide a fairer private sector for both landlords and tenants.

Whilst the Bill will likely see a raft of amendments between now and when it comes into effect (which could be as soon as early next year), it is anticipated that many landlords will decide to implement rent increases and potentially evict existing tenants if they cannot pay the increased rent prior to the rental reforms coming into force.

When the legislation does arrive, it will prompt a set date for new tenancies to be created under the new legal framework. However, this could take up to 12 months plus a further six months to a year before existing tenancies automatically convert. This means that there is no immediate rush for landlords to do anything right now as existing tenancies won’t be impacted for a couple of years at least.

Despite this, we have considered two areas of focus under the new laws that landlords will want to start thinking about now.

1. Rent increases

The new legislation will allow landlords to increase rent once a year (up to a market level) if the tenants are given two months’ notice of the increase, which will abolish the rent review clauses. If a tenant is of the opinion that the rent increase takes it beyond the market level, then they will be able to contest the increase and request that a tribunal decides whether the new rent amount is reasonable.

However, if a landlord wants to raise rent now before the new laws come into effect, then nothing would prevent them from doing so.

2. No fault evictions

Following on from rent increases is the issue of evicting a tenant if they are unable to pay the new rent amount. Under the new rules, this will be very difficult to do as the Government is committed to abolishing Section 21 ‘no fault’ evictions.

Under the current laws, a landlord is permitted to wait until the end of a fixed term before using the no fault procedure to remove tenants who are in arrears. This is a quick and effective process for landlords to use and the Courts are typically guaranteed to rule in the landlord’s favour, assuming they have followed the correct process.

However, under the new laws, this will no longer be possible. Landlords will be required to prove a certain amount of rent arrears before they will be able to evict a tenant. This means that a tenant will either need to be in:

As above, if a landlord wants to increase a monthly rental amount now and they have concerns that the tenant may struggle to pay it, then it would be advisable to do this before the new rules come into effect.

In addition to the above, landlords might want to decide to allow existing tenancies to roll over and become month-to-month agreements instead of new fixed-term agreements. This would enable them to increase rent amounts. If this doesn’t have a favourable outcome and the tenant is unable to pay the increased rent, then it would be easier for the landlord to end the tenancy with a couple of months’ notice.