The private rental market is continuously evolving, and with the highly anticipated Spring budget announcement in March and a General Election looming for the Autumn, 2024 is shaping up to be yet another pivotal year.
One of the biggest changes expected to dramatically alter the sector is the Renters Reform Bill (RRB). Considered to be one of the most significant pieces of legislation for private renters and landlords in the past thirty years, the bill promises a ‘once-in-a-generation overhaul of housing laws.’
Originally introduced by Theresa May's government in April 2019, no official date has been confirmed for when the RRB will become law, but it is widely expected to come into effect for new tenancies on October 1st, 2024.
The media has mainly concentrated on the abolition of section 21 ‘no-fault’ evictions, but the bill includes many other significant proposals that could affect tenants, letting agents and landlords alike. To successfully navigate these changes, it is vital to understand the potential impact of the RRB on your business and create a strategic plan to mitigate any potential risks.
Strengthened section 8 grounds for possession
In place of section 21, the bill aims to simplify the process for landlords to regain control of their properties by enhancing grounds for possession. Proposed plans include stricter penalties for antisocial behaviour, a new mandatory ground for repeated rent arrears and granting landlords the option to apply section 8 to a tenancy if they intend to sell a property.
A single system of rolling tenancies
To simplify the existing framework, all Assured Shorthold Tenancies (contracts lasting 6, 12, or 24-months) will be consolidated into a single system of periodic (rolling) tenancies, without fixed end dates. Including student lets, the abolition of fixed term tenancies will offer renters increased flexibility to move whenever their circumstances demand it.
Overhaul of Rent Repayment Orders (RRO)
In order to tackle the issue of disproportionate landlord and tenant rights, the bill is suggesting a revamp of the current RRO system, with the introduction of fresh penalties for landlords.
New offences include when a landlord breaches the ombudsman rules or deliberately provides false or misleading information onto the property portal. Additionally, the maximum Rent Repayment Order will be doubled, potentially holding landlords accountable for two years’ worth of rent if the case is decided in favour of the tenant.
New procedure for rental increases
To ensure fair rental practices, rental hikes will be strictly limited to once per year, with the notice period for any increases doubled. Landlords will have to complete and submit a modified Section 13 form, available on GOV.UK, serve it to their tenants with a 60-day notice. If the tenant agrees, they'll simply pay the increased rent, however any disputes can be challenged through the First-tier Tribunal.
Mandatory Property Ombudsman
All landlords, irrespective of whether they use a letting agent or not, will be obliged to become part of a new and improved single Ombudsman. Introduced to settle disputes outside of the courts, landlords with letting agents already have access to this system, but the Bill will extend this to all private landlords.
Property Portal for private landlords and tenants
A new digitised property portal will be introduced to "provide a single ‘front door’ to help landlords understand and demonstrate compliance with their legal requirements." Landlords will legally be required to register their property on the portal, with local councils empowered to take enforcement action against those that fail to join.
Although no specifics have been confirmed, the portal is designed to protect tenants by giving them the opportunity to review landlords, see a property’s letting history and log complaints.
A ban on discriminatory practices
Property advertisements from landlords and letting agents can no longer include the phrase 'No DSS', and they are also prohibited from excluding certain groups of people from viewing properties. With this new rule, it becomes illegal to apply a blanket ban on tenants on benefits or to families with children.
In addition, tenants will have the opportunity to ask for consent to keep pets in their homes, and landlords are obligated to respond within 42 days. Landlords can choose to enforce mandatory insurance to cover for any pet-related damages to protect their property.
Applying the Decent Home Standard to the private rented sector
A new system for assessing housing conditions would see a Decent Homes Standard applied to the private rented sector for the very first time. To ensure that all tenants have access to safe and comfortable homes, local authorities would be given powers to enforce housing standards, with landlords potentially facing fines of up to £30,000 if they don’t comply.
While the Renters Reform Bill continues to divide opinion, its bid to create a more robust and secure property market is one to be celebrated. We strongly encourage agents and landlords to familiarise themselves with the proposed legislation and compliance requirements, enabling them to prepare for upcoming changes.
