Election Update: What’s on the Cards for the Private Rented Sector?
Published on July 31, 2024 by Sarah Mac
In the King’s Speech earlier this month, the Labour government set out its plans for a new Renters’ Rights Bill. This will provide “greater rights and protections to people renting their homes, including ending no fault evictions, and reforming grounds for possession”.
Here we’ll explore what we know so far about the Renters Rights Bill, how it is different from the Renters Reform Bill, and what it will likely mean for landlords and tenants.
The briefing notes to the King’s Speech explain the key provisions of the Renters’ Rights Bill.
Abolition of Section 21 no fault evictions
This was a key part of the Labour party manifesto. The notes in the King’s speech refer to “removing the threat of arbitrary evictions and increasing tenant security and stability” as part of the Renters’ Rights Bill.
Whilst there is no information on when this will happen, what we do know is that the Bill won’t begin its journey through the House of Commons until at least September 2024.
Getting rid of Section 21 is just one part of widespread reform in the private rented sector, so it will take quite some time to become law, and then to be implemented. It is likely that we won’t see Royal Assent being granted until at least spring 2025.
New Section 8 grounds for possession
The King’s Speech briefing notes say that “clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to”.
The notes don’t explain anything further on this point, but it is likely that some of the expanded possession grounds under Section 8 that were in the Renters Reform Bill will be included in the Renters Rights Bill, potentially with a few changes.
When the Renters Reform Bill was going through the House of Commons, Labour had agreed to the new Ground 1A, which would allow landlords to take possession of their property if they wanted to sell it.
However, they wanted to see the ground restricted so that landlords wouldn’t be able to evict tenants during their first year of the tenancy, as opposed to the first three months which is what the original Bill provided. They also wanted to see Ground 1 (landlord or family moving into the property) amended from three months to one year.
Ability for tenants to challenge rent increases
The new Bill will “empower tenants to challenge rent increases designed to force them out by the backdoor”.
This statement lacks clarity, so it will be a case of wait and see on this one. The Renters Reform Bill took away the rights of the landlord to include rent review clauses within the tenancy agreement, requiring them instead to use the Section 13 statutory process. Tenants are already able to challenge rent increases under this process, but it is not clear whether there will be anything further added in this respect under the new Bill.
Rental bidding wars to be banned
The briefing notes say they will introduce “new laws to end the practice of rental bidding wars by landlords and letting agents”.
Labour requested an amendment to the Renters Reform Bill to ban landlords and letting agents from “inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises”.
This would not prevent a tenant bidding over the asking price, providing the letting agent or landlord didn’t ask them to do it.
Right to request a pet
The briefing notes state: “Tenants will have the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed”.
This introduces nothing new on top of the provisions in the Renters Reform Bill regarding pets and pet insurance.
Decent Homes Standard and Awaab’s Law
As per the Renters Reform Bill, a Decent Homes Standard will be applied the private rented sector to “ensure homes are safe, secure and hazard free – tackling the blight of poor quality homes”.
What was not in the Renters Reform Bill, however, but does feature in the briefing notes is that Awaab’s Law will also be applied to the PRS as well as the social housing sector, “setting clear legal expectations about the timeframes within which landlords in the private rented sector must make homes safe where they contain serious hazards”.
Digital private rented sector database
The Renters Reform Bill included the creation of a PRS database, and the briefing notes refer to creating something that sounds very similar.
The database will “bring together key information for landlords, tenants, and councils.”
The briefing note also says of the database: “Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most”.
Private Rented Sector Ombudsman
The Renters Reform Bill proposed a private rented sector ombudsman, and the new bill proposes the same, designed to provide “a fair, impartial and binding resolution to both landlords and tenants, and reducing the need to go to court.”
The briefing notes say the new Bill will support “cheaper resolution when there are disputes – preventing them escalating to costly court proceedings”.
Anti-discrimination rules
As per the Renters Reform Bill, the Renters Rights Bill will make it “illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property – so no family is discriminated against and denied a home when they need it”.
There are other points that were included in the Renters Reform Bill, but that were not covered in the King’s speech briefing notes, such as the abolition of fixed term tenancies or assured shorthold tenancies.
Of course, it is a case of ‘watch this space’ as the Renters’ Rights Bill enters discussion in the House of Commons and it remains to be seen what will form the new rules once the Bill receives Royal Assent. We’ll be reporting back as and when there is any further news.