Renters' Rights Bill: What all landlords need to know
The Government’s long-awaited housing reforms are now close to becoming law.
Earlier this month ministers threw out most of the changes proposed by the House of Lords, including measures designed to soften the impact on landlords and tenants.
The result is one of the most significant shake-ups in housing legislation for a generation, and it will be felt keenly here in Yorkshire.
This is what the rejected amendments mean in practice for landlords across the region:
1. The Bill is still going ahead and will soon become law
The Bill is well on its way to Royal Assent, currently in its ‘ping pong stage’. It is highly anticipated it may become law later this year.
The Bill is structured so that most reforms will come into force immediately such as abolition of S21, introduction of new possession grounds, end of fixed term tenancies and rent-in-advance restrictions – whilst the landlord database and potentially the Ombudsman requirement will follow later, after a transition period to allow the sector to adjust and infrastructure to be put in place.
It is expected that the final Bill will become the Renters’ Rights Act this autumn, meaning landlords have only a matter of weeks to make their final preparations ahead of the significant changes.
2. No requirement for separate pet deposit
One of the suggested changes would have let landlords request a separate pet deposit of up to three weeks’ rent, on top of the usual deposit cap, but that idea was turned down. The Government said the current five-week limit already covers potential damage, and adding more would make things harder for tenants financially.
3. No requirement for pet insurance
Requiring tenants take out pet insurance was also rejected, with Government noting that the insurance industry is not yet ready to offer suitable products at scale. Whilst pet owners can take pet insurance out if they wish, it won’t be something landlords can enforce.
4. No change to the 12-month re-letting restriction after a failed sale
Another change that didn’t make it through was a plan to shorten the timeframe a landlord has to wait before re-letting a property after asking a tenant to leave in order to sell. The House of Lords suggested reducing it from 12 months to six, but this was also rejected. The Government asserted the full year is important to stop landlords from abusing the grounds of repossession.
5. No extension of student possession grounds to smaller properties
Allowing landlords to use the student housing ground for possession for smaller properties, like one- or two-bedroom flats and not just HMO’s (houses of multiple occupation), was also rejected. The Government said that the current rules already strike a fair balance and help protect students who don’t fit the typical mould, like postgrads and students with dependents.
Key changes anticipated in the bill include the abolition of Section 21 notices, often used for ‘no fault evictions’, and the end of fixed-term tenancies, meaning tenants can give notice at any time after moving in, provided they offer two months’ notice. It will also prohibit bidding wars and blanket bans on renting to families with children or those claiming benefits.
The Bill will also require landlords to accept pets, join an ombudsman scheme and address reported hazards, such as mould, within stricter timeframes.
Kerry Ferguson is key client manager at Linley & Simpson.