Private rental sector reform approaches

The Renters’ Rights Bill is nearing the end of its journey through parliament and looks set to become law in the Autumn. Colin Fennelly, ARAG’s Senior Strategic Account Manager for London takes a look at some of its key reforms and what they could mean for London’s tenants, landlords and insurance providers.

It won’t come as a surprise to many that London is home to the busiest rental market in the UK. Almost a third of people in London live in properties that are privately rented, a proportion that is nearly double the national average.

But London also faces more than its share of the challenges that undermine this critical part of the economy. Older properties are inevitably harder to maintain to suitable standards, and affordable rental accommodation remains stubbornly hard to find.

After a period of relative stability, average rents in London increased by over 11 per cent in 2024, significantly more than in any other part of the country. It’s no surprise that politicians on both sides of the House of Commons see the need for reform.

Rental reform reborn

There’s an element of déjà vu about the Renters’ Rights Bill. It has more than a little in common with the Renters (Reform) Bill, introduced by Michael Gove more than two years ago, that was still in the House of Lords at the time of last year’s snap election.

Both bills would abolish section 21 notices, regulate rental increases and improve the adequacy of rented accommodation with a ‘decent homes standard’, but the new government’s bill goes further in trying to give tenants more certainty.

Fixing fixed terms

One of the most significant changes would be the immediate end to fixed-term tenancies. Rather than wait for such contracts to expire over succeeding months and even years, they would automatically become periodic tenancies once the new law is implemented.

Alongside the abolition of section 21 notices, which currently allow landlords to serve notice without giving a reason, this would give renters more control over when their tenancy ends.

This isn’t to say that landlords won’t be able to regain possession if they need to. In fact, the list of grounds for repossession under section 8 will be extended. So, if a landlord wanted to sell the property or have family move in, they could. Equally, anti-social behaviour and persistent rent arrears on the tenants’ part could also be grounds for eviction.

Better homes, fairly priced

The decent homes standard already required of social housing would now apply to privately rented properties too. This would require rented homes to meet minimum standards and for landlords to address any problems with heating, water supply, damp or mould, promptly.

In line with the previous government’s plans, the Renters’ Rights Bill also limits a landlord’s ability to hike rents. Rent increases would be limited to once a year and would require a Section 13 notice.

The bill goes further by banning landlords from using bidding wars to get higher rents. Only a minority of unscrupulous landlords are thought to be doing this, but London ranks just behind Southampton and Brighton in the list of cities where the practice seems most prevalent. In one survey, more than a quarter of renters in the capital reported losing a property to a higher bid.

A big change for landlords

These are just some of the headline measures in the legislation that, like the Employment Rights Bill also closing in on Royal Assent, fulfils one of the government’s key manifesto pledges.
The bill also aims to make things easier for renters with pets, prohibit discrimination against tenants, introduce an ombudsman for the sector, require landlords to register privately rented properties on a national database and strengthen enforcement where landlords break the law.

While the individual measures in the bill seem reasonable and fair to tenants who, many would argue, have suffered from inequity in the market, it all adds up to the broadest reform of the private rental sector in decades.

All of ARAG’s landlord policies include access to our legal advice helpline which will be an invaluable tool in helping landlords navigate the new legal framework, as this legislation comes into force.