The Renters Rights Bill has recently had its first reading in Parliament, marking a significant step towards potential reform in the UK’s private rental sector. Our below article gives an overview of the proposed legislation and what you need to know.
What is the Renters Rights Bill?
The Renters’ Reform Bill has returned to parliament, five years after it was initially promised, with the Labour Party now committed to improving the proposals first set by the Conservative Party. See our previous blog on the plans following Labour’s general election win.
It is now being referred to as the ‘Renters’ Rights Bill’. According to Housing Minister, Matthew Pennycook, the Bill aims to:
“Decisively level the playing field between landlords and tenants.”
The main proposals are as follows:
1. Abolishing ‘no-fault’ evictions (Section 21 notices)
At present, landlords can evict tenants without providing a reason, giving just two months’ notice. However, the proposed change would be that landlords would need to provide a valid reason for eviction, such as breach of tenancy agreement, rent arrears, or intention to sell the property. The benefit of this for tenants is a sense of security, on the other hand, it can also make it more challenging for landlords to regain possession of their properties.
2. Restricting rent rises to once per year
At the moment there are no strict limits on how often the landlord can increase the rent, although it’s typically done yearly. The proposed change would mean rent increases would be legally limited to once per year, with a possible cap on the percentage increase. This benefits tenants as it provides more predictability however it can limit landlords’ ability to respond to market changes.
3. Introducing open-ended tenancies
Currently, most private tenancies are fixed-term, usually for 6 or 12 months. The proposed change would mean tenancies have no fixed end date, continuing indefinitely unless the tenant decides to leave or the landlord has valid grounds for eviction. Again, this could give more stability for tenants but may reduce flexibility for both parties.
4. Improving Property Standards
Currently, even though there are existing regulations, enforcement can be inconsistent. The Bill might bring in stricter minimum standards for rental properties and more robust enforcement mechanisms. This may lead to better living conditions for tenants but may increase costs for landlords.
5. Restructuring the Court process for property disputes
Addressing disputes through Courts can be time-sensitive and a high cost for both parties. The Bill could introduce a faster, more efficient system for handling disputes between landlords and tenants. This would be a benefit to each party by reducing the time and cost associated with resolving conflicts.
What will happen next?
Following the first reading, the Bill will now progress through many more stages, see below:
- Second reading: A debate on the general proposals of the Bill
- Committee stage: Thorough examination and potential amendments
- Report stage: The House considers adjustments made in committee
- Third stage: final opportunity for a debate and then a vote by the Commons
- Consideration in the House of Lords
Comment
It’s important to note that the Bill can have various significant changes through the process and there is no guarantee yet of what will become law. While it is clear the Bill aims to address concerns in the current rental market it is vital to think about the potential implications on those involved and what this means for you. One can only hope that the Government will address the inefficiencies of the Court system prior to implementing the Bill.
How can we help?
Paula Haverkamp is a Senior Associate and Litigation Executive in our Dispute Resolution team, specialising in landlord and tenant matters and property disputes.
For further information in relation to the subjects discussed in this article, please contact Paula or another member of our team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
contact us