It’s been four years in the making, but this week the Renters Reform Bill has finally been published by the government. Here we will summarise what we know so far, provide insights from industry experts and answer the question - is it such bad news for landlords?
How long will it take for the Renters Reform Bill to become law?
The Renters Reform Bill is a proposal for a change of existing legislation that involves the private rental market (PRS). However, the process of enacting new legislation involves extensive debates, committee stages, and votes in both chambers before being approved by the monarch. This means that it's difficult to predict when the Bill will become law, but the NRLA has estimated it could be 2024 for the entire process to be completed.
The Bill must pass 12 stages before it becomes law. Right now, it is at stage 2 - also known as the 2nd reading, this is when parliament gets to discuss and debate the main principals of the Bill.
What happens when the Renters Reform Bill becomes law?
The good news is landlords will be given plenty of time to prepare for the new rules. Once the Bill has passed its final stage, new tenancies will have a grace period of six months before the new rules need to be implemented. For existing tenancies, landlords will have up to 18 months to convert to the new system. This means landlords will have plenty of time to get familiar with the new legislation and make any necessary adjustments.
The main principles of the Renters Reform Bill
- Strengthening the Decent Homes Standard
In the government's statement this week, they emphasised their focus on the ‘Decent Homes Standard’ as part of their ‘Levelling Up’ mission. However, the specifics of this focus remain unclear. Currently, to be eligible for renting, a property must meet certain minimum standards, such as gas and electrical safety requirements. For instance, the minimum EPC grade is currently E, but there has been talk of potentially lowering it to a minimum of C. While the government has not yet revealed exactly what changes will be made to the Decent Homes Standard, it's possible that energy performance will be the first area addressed. The good news is - this is not a shock to most landlords, in-fact the EPC report by Habeo shows that the amount of PRS properties in England with a rating between A-C has grown by 17% in the last decade and continues on a rapid incline.
Currently, the law stipulates that landlords can repossess their properties from assured shorthold tenants without having to establish fault on the part of the tenant via a Section 21 notice. As expected, Section 21 is likely to be abolished when the Renters Reform Bill has passed. Understandably, many landlords are worried about this change, as it’s often the easiest way to evict a tenant - even when the eviction is justified. However, there is good news for landlords. The government has recognised the need for better protection against bad tenants who engage in anti-social behaviour or fall behind on rent payments and have committed to doing more to help landlords gain back possession of their property when necessary.
- Comprehensive possession grounds
Although the news of the abolition of Section 21 might seem daunting, the government have pledged to support landlords as well as tenants. In their guide to the Renters Reform Bill they have noted they will be introducing more extensive possession grounds to ensure that landlords have necessary evection powers when they need them - including when they wish to sell or move in close family members.
According to the new Bill proposal, tenants will be granted the right to request permission for keeping pets, and landlords will be obligated to give due consideration to these requests without unreasonably refusing them. In order to address any apprehensions landlords may have, tenants will be required to acquire pet insurance that adequately covers any potential damage to the property. Additionally, in conjunction with the prohibition on pet bans, it will soon become unlawful for landlords and letting agents to discriminate against tenants based on their status as parents or recipients of benefits.
- Welcoming a Private Rented Sector Ombudsman
The Renters Reform Bill will welcome a Private Rented Sector Ombudsman who will seek to provide comprehensive support to both landlords and tenants. Through this dedicated entity, disputes can be resolved more efficiently and affordably compared to the traditional court system.
What the NRLA have got to say
If you’re a landlord you’ve probably heard of the National Residential Lanldord Association (NRLA). In short, they act as the media voice for landlords across the country and have been keen supporters of landlords rights when it comes to the Renters Reform Bill. That’s why all eyes have been on Ben Beedle, Chief Executive of the association - let’s here what he had to say this week:
“The Bill in the end was largely in line with the White Paper but it is important to remember that this is the beginning of a new journey: it is not coming in today and now kicks off what NRLA is here to do - influence, cajole and improve the Bill to give confidence to the responsible majority in our sector - something that I was very pleased to see the Secretary of State accept in his media rounds. The language from Mr Gove was a marked change. He needs responsible landlords let's not forget that.
Should we panic and make knee jerk responses in our lettings business? Of course we shouldn't. Do we want to see changes? 100%. Are we geared up for sensible and rational argument with Michael Gove and Rachel Maclean, absolutely - and I have already had discussions with the latter and enjoyed the discussion on the subject with Michael Gove on the Jeremy Vine show.”
A word from MakeUrMove
MakeUrMove has been at the frontline of the property industry for over ten years. Since 2008 we have supported landlords in their mission to offer quality hosing to tenants throughout the UK. Alexandra Morris, the esteemed co-founder and managing director, has emerged as an influential advocate for landlords nationwide. Let us now turn our attention to her valuable perspective on the reform:
“Change is never a comfortable prospect but painful processes should not lead to a narrow conclusion. The reforms proposal to improve renting is no different and it is a shame that the media have taken the view that this is anti-landlord. In fact many of the high level proposals indicated would be beneficial if introduced with cohesion and careful thought.
For example most of us know that the so called 'no-fault' eviction has never been issued because there was no fault. It has been utilised because the fault process is costly and time consuming whilst being littered with uncertainty and arguably arduous administrative processes which create loopholes for bad tenants. Fixing that at the same time as abolishing Section 21 would be an improvement and is fair. Improving the quality of homes and increasing professional standards, with the introduction of the Ombudsman for landlords and the adoption of the Decent Homes Standard, can only be a good thing. If correctly implemented disputes should be handled quickly and be less expensive whilst tenants will be happier in their homes, resulting in longer tenancies and lower maintenance costs for landlords.
Holding concerns that the steps required to effectively implement these policies to achieve the goals are valid, we encourage landlords to speak out about these concerns and for media to report that. Professional bodies and lobbyists are continuing to address these with government and individuals should consider contacting your local MP so they can come to Parliament with a picture of the industry as a whole.”
What we know so far
The Renters Reform Bill has been pending for some time, and while we are uncertain about the exact actions that will be taken, it is reasonable to expect that the main policy updates listed above will move forward. The specifics of these policies are still being agreed upon, and it will take some time before we know the details. However, we will keep you posted via our blog as updates come in. For more information on the Renters Reform Bill, please refer to the trusted sources provided below.
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