The Renters’ Rights Bill has received Royal Assent, in a move that marks one of the biggest reforms to the private rental sector in England in decades.
The changes, which passed into law on 27 October, are aimed at improving housing standards for private renters, as well as creating more balance between tenants and landlords by providing the former with greater protections in line with the government’s Plan for Change manifesto. This aims to redress a perceived balance between the 2.3 million landlords and 11 million tenants in England.
Key tenets of the act include the removal of Section 21 "no-fault" evictions, introduction of rent controls and inclusion of periodic tenancies, among others.
“In the coming weeks, ministers will outline how the reforms will be rolled out,” the government said in a statement.
One of the primary changes introduced is the abolition of Section 21 "no-fault" evictions, with landlords only permitted to “end tenancies in specific circumstances set out by law.”
Should the landlord evict a tenant on the grounds that they intend to re-occupy the property themselves, they are required to provide four months’ notice and are unable to relet the property to alternative parties for a duration of one year. Landlords looking to regain possession of a property must do so under a section 8 ground for possession.
Fixed-term tenancies will also be scrapped in favour of periodic tenancies across the board to provide rolling contracts with no end date as standard. This gives tenants the ability to give notice and vacate a property within two months. Landlords face tighter rules on when and how they can terminate a lease, including not evicting tenants within the first year of a tenancy.
Changes were also made to rent rules in an attempt to increase fairness and transparency, including a limit on increases to once a year. Conditions stipulate that when increases occur they must be in line with local market rates.
If tenants feel that they have faced unfair rental increases, a first-tier tribunal process is on offer as a means for challenging them. And landlords must stick to accepting offers from tenants at the advertised rent as a means of curbing bidding wars.
New laws also extend to heath and wellbeing, with regulation focused on ensuring housing standards are met. Awaab’s Law and the Decent Homes Standard, which was previously only applied to social housing, will now be applied to private landlords. This includes limits on response times to address any urgent health risks.
Landlords will also be logged in a national landlord register and will be under the watch of an independent ombudsman with the aim of enforcing standards and fixing tenant disputes. Specifics have yet to be given on when this will be brought into effect.
Other notable changes include increased tenant protections, such as a right to request pets, a ban on rent in advance beyond the first month and rules on discriminating against renters with children or on benefits.
The Act has faced criticism for a perceived lack of clarity concerning when these upcoming changes will be active.
The British Property Federation criticised the Act for, among other things, unclear implementation timelines.
Kate Butler, assistant director of the British Property Federation, said: “The Renters’ Rights Bill will see a significant overhaul of the private rented sector, but despite Royal Assent there are still too many unanswered questions. The Government needs to iron out a myriad of issues to ensure the sector has sufficient clarity to prepare for its implementation. Most of the Bill’s reforms will rely on secondary legislation, and a lack of clarity on timings risks destabilising the market and deterring landlord investment.”
She added: “The BPF has repeatedly called for a minimum six-month window between Royal Assent and implementation. Our biggest concerns lie with the ability of the courts to manage the increased case load that will arise as a result of the abolition of Section 21 ‘no-fault evictions’, and the First-Tier Tribunal’s ability to handle claims against Section 13 rent increases. The Bill is a once-in-a-generation opportunity to create a better regulated rental sector, but it could quickly be undermined by uncertainty.”
Others have acknowledged the challenges and flagged concerns about the uncertainty the Act poses in the wider market
Rebecca Shafran, alternative residential markets research, BNP Paribas Real Estate, said: "The abolition of Section 21 and the end of Assured Shorthold Tenancies will fundamentally shift the balance of power between tenants and landlords – creating a more secure, long-term rental model.”
She added: “While there will be initial challenges in terms of enforcement and tribunal capacity, the transition period for most of the Bill looks likely to be short. Landlords and operators will need to move quickly to align tenancy structures, compliance processes, and data reporting with the new framework.
“Longer term, greater security for tenants should improve stability in the sector, but there remains uncertainty around how the market will recalibrate rent levels and yields in response to new regulatory pressures.”
Ben Beadle, chief executive of the National Residential Landlords Association, said in a statement: “After years of debate and uncertainty, today marks an important milestone for the private rented sector. With the Renters’ Rights Act now on the statute book, the sector needs certainty about the way forward.
“This is the most significant shake-up of the rental market in almost 40 years, and it is imperative that the new systems work for both tenants and responsible landlords. The NRLA stands ready to work with the Government to ensure the reforms are implemented in a way that is fair, proportionate and deliverable.”
Secretary of State Steve Reed said: “Our historic Act marks the biggest leap forward in renters’ rights in a generation. We are finally ending the injustice overseen by previous governments that has left millions living in fear of losing their homes.
“For decades, the scales have been tipped against tenants. Now, we’re levelling the playing field between renters and landlords.
“We are tearing down the walls of injustice in the private rented sector and building a future where tenants are protected, respected and empowered.
“This is an historic moment for renters across the country and we’re proud to deliver it.”