The Renters Reform Bill initially promised in 2019 was published last month (May 2023). The government says this piece of legislation will deliver “safer, fairer, and higher quality homes, thanks to the once-in-a-generation overhaul of housing laws”. However, it is not expected that it will become law until next year.
So where does this leave you as a landlord? The landscape for landlords is getting harder. There are a multitude of reasons. For example, the recent higher interest rates mean many landlords are seeing a squeeze in their profits.
The legislative challenges like the upcoming EPC changes and MTD on the horizon plus the curbing of tax reliefs on mortgages introduced eight years ago is another reason landlords are feeling the pinch.
Now the introduction of the Renters Reform Bill could mean that even less private rental accommodation could be available.
If you are a landlord intending to continue investing in domestic rental properties, you need to understand what the new Bill could mean for you. There are a few proposed changes.
Abolish no-fault eviction
This change will bring an end to fixed–term tenancies so you’ll not have an end date. After the Bill is introduced, any new tenancies will automatically not have an end date. Any older tenancies will move to the new system after 12 months.
Tenants will be required to give two months’ notice if they want to leave. This allows landlords enough time to find another tenant.
Landlords on the other hand will only be able to evict a tenant if there is a legal reason to do so such as repeated arrears. For arrears, your tenant will need to be two months in arrears and fall behind at least three times within a three-year period for you to be able to evict them.
Special provisions will be made if you wish to sell your property or move yourself (or your family) into the property. However, this can only apply six months after the beginning of a new tenancy.
Introduction of the Private Rented Sector Ombudsman
A new Ombudsman will be introduced after the Bill receives Royal Assent. All landlords will be legally required to register and there will be fines for not registering.
The aim of the Ombudsman as you would expect is to provide fair and binding resolutions and avoid going to court if possible.
The Ombudsman will be able to deal with any complaints made by tenants and will have the power to instruct you as a landlord to take remedial action whatever that may be.
Privately Rented Property Portal
There are plans to introduce a new digital portal for landlords and you will be
charged a fee for it.
The digital portal will list all the rules and requirements for a landlord. It will also help tenants make better decisions before signing a new agreement because they will be able to access information on their prospective landlord.
As well as tenants the local council will also have access to the information. The reasoning behind this is to crack down on the rogue landlords.
Rent increase and rents in advance
Once the Renters Reform Bill is introduced landlords will only be able to increase rents once every year. However, you must give two months’ notice of any rent change. This will allow tenants to have a choice of whether to stay or leave.
If there is a disagreement on the rent increase it can go to the Ombudsman.
If as a landlord you are asking for rent in advance, which is common practice, it needs to be proportional and reasonable.
Request for a pet to live in the property
Tenants will be given a legal right to request a pet in their home. Landlords must consider this request and cannot just refuse. There is a recognition that having a pet in a house is not always possible, but you will need to justify this course of action.
Landlords are entitled to ask tenants to take out pet insurance to cover any potential damage that may be caused.
The Bill also expects you as a landlord to provide your tenants with a written agreement at the outset. This is good practice; you should start immediately if you are not doing it already.
If you have bad tenants who display anti-social behaviour and are late payers, now might be the time to consider their future as your tenants. You still have time to act.
We expect the White Paper on the Renters Reform Bill to be published shortly, maybe even before the summer recess. However, in recent days, opposition has built up including among the government backbenchers as many of them are landlords. So, let’s wait and see how long it takes.
We will of course keep you posted via our social media channels.
You can do further reading into the details of the Renters Reform Bill here. If you have any questions please contact your normal manager at Myers Clark. If you are not yet working with us look at how Myers Clark supports landlords