What does the Renters’ Rights Bill mean for residential landlords?

For some, it will make little difference, while others will face a complete change of approach.  Dave Moulton, property disputes specialist solicitor at Fraser Dawbarns outlines the key points.

Although we have no definite date yet for the changes, there seems little doubt that the Bill will be passed. So what are the key changes expected to be?

Section 21

The starting point is the abolition of the so-called ‘no-fault’ Section 21 notice, which currently enables landlords in most cases to end an assured shorthold residential tenancy by giving two months’ notice ending at any point after a fixed term contract ends, without having to give a reason for doing so.

The Bill, in its current form, provides for the abolition of fixed term assured/ assured shorthold tenancy agreements (which the vast majority of residential tenancies currently start off as) and provides that all new qualifying tenancies will be deemed periodic tenancies from the outset, giving the tenant greater flexibility to terminate their tenancies.

The law will apply to both new and existing tenancies.

Discover more about David Moulton

Government statistics show that in 2023 some 26,000 households turned to their local councils for support after being given notice to leave their rental properties in this way and many others will have found their own alternative private rental accommodation. A key aim of the Bill is to give private tenants increased security from the termination of their tenancies and hopes to provide stability for tenants and result in far longer-term arrangements than most landlords may have envisioned, subject to the tenant’s wishes.

Once the changes become law, residential landlords will need to have a good reason to ask tenants to vacate – such as rent arrears or anti-social behaviour – and will need to use the more complex route of following the Notice procedures under Section 8 of the Housing Act 1988 to enforce this. A key component of the Section 8 possession route is the need to establish grounds for possession.

Section 8

The Section 8 procedure is to experience a substantive overhaul with the notice periods required to be given for some existing grounds increasing (save for cases where anti-social behaviour is pleaded), the scope of certain grounds being amended, and entirely new grounds being introduced.

Of those changes, one of the most significant for landlords will be the changes to Ground 8 which allows landlords to obtain possession based on the tenant being in rent arrears. The current legislation allows the landlord to serve notice and to obtain possession on mandatory grounds provided the tenant is in at least 2 months’ arrears of rent (or 8 weeks’ if rent is paid weekly). The Bill will amend the amount of arrears which must have accumulated in order for the landlord to rely on this Ground to 3 months (or 13 weeks if rent is paid weekly). The current notice period of two weeks, being the amount of notice the landlord must give to the tenant prior to commencing proceedings for possession based on this Ground, is also set to increase from 2 weeks to 4 weeks.  The impact on landlords, who already face lengthy proceedings to obtain possession, will be significant, particularly those whose tenants stop paying rent completely (as is commonly the case when Ground 8 is pleaded) until they are evicted.

Many landlords will be concerned that the abolition of Section 21 Notices will limit their freedom to dispose of their properties if they wish to leave the rental market or that they will be tied to selling the property with sitting tenants, impacting the marketability of the property. The Bill does make some attempt to strike a balance between the rights of the landlords to act on their properties and the tenant’s rights to security. Significantly, the Bill as currently drafted will introduce a new Ground 1A which, provided the criteria under that Ground are met, will allow landlords to serve Notice and seek vacant possession of their properties in order to sell them. In most cases, this will require the tenants to have been in occupation for at least a year before notice expires.

Rental rates and restrictions

Landlords who are advertising for new tenants will be subject to new restrictions about the rental rates they advertise.  They will have to publish a figure for the rent they require and will not then be able to accept offers above that from a later applicant trying to secure the tenancy after someone else has already agreed the asking price.

Rent increases will only be permitted once each year and will have to be in line with market rates which will give tenants greater long-term certainty and security. When proposing increases, landlords will need to follow the formal procedure of serving a statutory ‘Section 13’ notice proposing a rent increase as opposed to using more informal methods to impose an increase.

Another change will forbid landlords from stating ‘no benefit claimants’ or ‘no children’ when advertising for new tenants in an attempt to prevent perceived discrimination of applicants.

Quality of properties

Improving the quality and safety of homes is a key aim of the Bill to address the potentially dangerous effects of exposing tenants to sub-standard housing The Bill will introduce  a ‘Decent Homes Standard’ to privately rented residential property for the first time, extending the scope of ‘Awaab’s Law’. Landlords already have statutory obligations to keep the property in repair but the intention of the Bill is no doubt to extend that duty and to bolster the powers of local authorities to take enforcement action against landlords who fail to meet the required standards.

Landlords who fail to correct any serious hazards may find themselves fined up to £7,000 by local councils and could potentially face prosecution if they fail to comply.

Energy Efficiency

Separate from this Bill, the government has pledged to improve minimum energy efficiency standards in all private rental properties by 2030 requiring a property to achieve an Energy Performance Certificate ‘C’ rating, so prudent long-term landlords will start planning ahead for this.

If you would like to discuss how any of these changes may affect your position as a landlord please contact us.

How To Contact Us:

To contact a member of our team, you can fill in our online enquiry form, email info@fraserdawbarns.com, or call your nearest office below. If you’d like to speak to a member of our team at one of our offices across Norfolk and Cambridgeshire, visit our offices page.

Wisbech: 01945 461456

March: 01354 602880

King’s Lynn: 01553 666600

Ely: 01353 383483
Downham Market: 01366 383171

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances.  Fraser Dawbarns LLP is always happy to provide such advice.