In this blog post, we will cover the main points of the Renters Reform Bill, exploring its key provisions and the potential impact it may have on renters and landlords.

Background:

The Renters Reform Bill is a piece of legislation designed to address the concerns and challenges faced by renters in the UK. Introduced as part of the government’s commitment to improving the rental sector, the bill aims to modernise renting and provide a fairer balance between the rights and responsibilities of tenants and landlords.

Abolishing ‘No-Fault’ Evictions:

One of the headline aims of the bill is to abolish Section 21 “no fault” evictions.

However, the government announced in October 2023 that it will not proceed with abolishing section 21 “until reforms to the justice system are in place”. It has further stated that they will only continue with abolishing section 21 when “sufficient progress has been made to improve the courts.”

Introducing Open-Ended Tenancies:

The Renters Reform Bill seeks to introduce open-ended tenancies, bringing an end to fixed-term tenancies and the subsequent uncertainty of renewal. Open-ended tenancies would provide renters with the security of knowing they can remain in their homes for an extended period, subject to the necessary legal procedures.

Rent Increases and Caps:

To prevent excessive rent hikes, the bill proposes the implementation of stricter regulations on rent increases. It aims to give tenants more control over their housing costs by limiting rent hikes to inflation or a prescribed percentage. This provision aims to strike a fair balance between protecting tenants from excessive increases while allowing landlords to make reasonable adjustments based on market conditions.

Improving Tenant Rights:

The Renters Reform Bill places a strong emphasis on strengthening tenant rights. It proposes the establishment of a new regulator responsible for ensuring that all landlords meet specific standards of accommodation and safety. Additionally, it seeks to streamline and simplify the process for tenants to address concerns and report issues, ensuring a more efficient resolution of disputes.

Increased Access to Justice:

There has been a general sentiment in the property sector and the property industry press that the courts are suffering from backlogs. Property Industry Eye reported in September 2023 that landlords were “at their tether” dealing with delays caused by funding cuts and the aftermath of the pandemic.

The government stated in October 2023 that “the court system needs to improve”. It acknowledged that while most tenancies do not need to ever result to going to court over issues, the system needs to be as “smooth and efficient as possible” for when there are disputes.

To address the issue of access to justice for renters, the Renters Reform Bill includes provisions for the establishment of a new housing court. This specialised court aims to provide a more accessible and efficient platform for resolving disputes between tenants and landlords. The introduction of this court would streamline the legal process, ensuring quicker and fairer outcomes for both parties involved.

Proposals to change the court system were first outlined in the 2022 report, ‘A Fairer Private Rented Sector’. This included committing to work in partnership with the Ministry of Justice and the HM Courts and Tribunals Service. However, it was only in October 2023 when the government explicitly stated that this needed to be a priority - above implementing Section 21. 

What needs to change in the courts process?

The government has identified key areas that need to be addressed before Section 21 is abolished. These include:

1. Digitising more of the court process to be simpler and easier for landlords to use.

2. Exploring how the courts can prioritise cases that involve antisocial behaviour. This includes mandating that tenancy agreements should have clauses that antisocial behaviour can result in an eviction.

3. Improving bailiff recruitment and retention - reducing admin to prioritise possession.

4. Providing early legal advice and better signposting to help tenants.

 

What about the proposed ombudsman?

The Renters (Reform) Bill outlines the creation of a new private renters’ ombudsman that all landlords must join. 

The proposed changes, announced in October 2023, are to “address the gap in housing redress in relation to private sector tenant complaints.”

This means a focus on strengthening the mediation process, so cases do not have to immediately go to court. 

In October 2023, the government suggested that it is still looking at different options around how the ombudsman service will be delivered, including how it fits within the existing landscape of agency redress schemes. 

The government also seems to indicate the potential for landlords to initiate proceedings in cases of arrears or antisocial behaviour. For both tenant and landlord-initiated proceedings, the default assumption seems to be to try to resolve disputes through mediation wherever possible.

 

Conclusion:

The Renters Reform Bill presents a significant opportunity to reshape the rental market, aiming to provide greater security and rights for tenants while maintaining a fair balance with landlords’ interests. 

Furthermore, the bill’s emphasis on improving tenant rights, enhancing health and safety standards, and establishing a dedicated housing court highlights the government’s commitment to creating a more transparent, efficient, and equitable rental sector. 

As renters and landlords navigate the evolving rental market, it is crucial to stay informed about the changes brought by the Renters Reform Bill. By understanding its provisions and implications, both parties can adapt and make informed decisions that foster a more balanced and fair rental environment for all involved.

This article is intended as a guide and does not constitute legal advice. Please visit gov.uk for more detailed information. 

If you would like to find out how these changes will affect your buy to let or would like more information, contact our lettings expert, Tristan Lee, to book a free zoom call.