Renters’ Rights Bill enters final stages

It is now just over a year since the Renters’ Rights Bill was first introduced to Parliament and the landmark legislation looks set to become law soon. Matt Warren, ARAG’s Head of Broker & MGA Sales, looks over some of its key measures and what they could mean for tenants, landlords and their insurance providers.

It would be hard to argue that the private rental sector in the UK isn’t in need of some sort of reform and the major parties seem to have been in broad agreement on several proposals. Nonetheless, the Renters’ Rights Bill represents the biggest transformation of the legal framework around renting property in decades, so landlords will need to be ready for it.

Rental reform reborn

There’s a bit of déjà vu about the Renters’ Rights Bill. It’s got quite a lot in common with the Renters (Reform) Bill that was introduced to parliament by Michael Gove, back in May 2023, but left stranded in the House of Lords when last year’s snap election was called.

Both bills aimed to abolish section 21 notices, introduce a ‘decent homes standard’ to improve the quality of rented accommodation and regulate rent increases, but the government’s bill goes further in giving tenants more certainty.

Fixing fixed terms

One of the key changes will be the immediate end to fixed-term tenancies. Rather than waiting for such contracts to expire over the coming months and in some cases years, all existing fixed-term tenancies will automatically become periodic tenancies under the new law.

Along with abolishing Section 21 notices, which currently let landlords serve notice on tenants without giving them a reason, this will give renters more control over when the tenancy ends.

Landlords will still be able to regain possession of their property if they need to. In fact, the list of grounds for repossessing a property under Section 8 will be extended. So, if a landlord wants to sell their property or let family move in, they will be able to. Equally, persistent rent arrears and anti-social behaviour from tenants could also still constitute grounds for eviction.

Better homes, fairly priced

The decent homes standard that already needs to be met for social housing will also now apply to privately rented properties. This will ensure that rented homes meet minimum standards and that landlords promptly address any problems with damp, mould, heating or the water supply.

In line with the last government’s plans, the Renters’ Rights Bill will also limit the landlord’s ability to hike the rent demanded of tenants. Rent increases will require a Section 13 notice and be limited to just once per year.

The current legislation goes further by stopping landlords from using bidding wars to push rents up. Only a few landlords are thought to do this, but the practice is known to be a problem for renters in several cities including London, Southampton and Brighton

Major change for landlords

This is just a summary of some of the key measures in the bill that, like the Employment Rights Bill also nearing Royal Assent, fulfils a key manifesto pledge for the government.

The Renters’ Rights Bill also aims to make things easier for pet owners trying to rent a home; will introduce an ombudsman for the private rental sector; prohibit discrimination against tenants; create a national database of privately rented properties and strengthen enforcement where the law has been broken.

The individual measures contained within the bill may seem fair and reasonable to tenants who, many would argue, have suffered the most from inequity in the sector, but it all amounts to the most extensive reform of the private rental market in a generation.

ARAG’s legal and tax advice helplines will be invaluable in supporting landlords as they navigate the new legal framework, once the Employment Rights Bill becomes law. Fortunately, all of our policies for landlords include access to them.