The Renters’ Rights Bill 2024 (formerly the Renters’ Reform Bill under the Conservatives) will, if passed into law, bring in some of the biggest changes to the private rental sector in decades.
One of the most significant - and most talked about - changes is the ending of Section 21 “no-fault” evictions. Presently, tenants can be evicted – subject to certain procedural requirements – having done nothing wrong, through the service of a Section 21 notice. There have been concerns that landlords have been using Section 21 notices unfairly: evicting tenants to take advantage of the holiday-let market or to bring in tenants willing to pay a higher monthly rent, or even to shift tenants who have raised complaints about the property. However, others argue that Section 21 provides landlords with a quicker and cheaper alternative to the Section 8 process (used when tenants are not paying their rent), or simply that owners of properties should always retain the ultimate right to evict tenants quickly and easily.
The idea is that there will be a move to a simpler tenancy structure where all ASTs are periodic and all possession grounds are fair, leaving landlords with the ability to evict if they need to move into the property or sell, but allowing tenants more time to find a new home.
The plan is that the revocation of Section 21 will happen without any transitionary provisions, on a date to be determined, but probably at somepoint mid-2025. The change will affect both new and existing tenancies. Whereas the motivation is to give tenants more security by removing the Section 21sword of Damocles that hangs over their heads, the concern is it will lead to a significant increase in Section 21 evictions as landlords seek to removeproblematic tenants whom they might have been prepared to give the benefit of the doubt and allow to stay, or offload their properties entirely in the leadup to the new law coming into force. It is predicted that properties with sitting tenants will now become even harder to sell than they already are, resulting in landlords evicting tenants and selling-up whilst they still can.
With the county courts already struggling to hear cases promptly, the feared increase in possession proceedings will only seek to make matters worse.
Not only will the reduction in rental properties exacerbate the entire problem – reducing the rental pool and increasing prices yet further- but those landlords that remain in the sector are likely to be even more cautious about who they rent to.
Another key change that the Bill will bring in is the requirement for landlords to act quickly if damp or mould is reported. This follows the death of two-year-old Awaab Ishak who was exposed to mould spores in the social housing property he resided in with his parents. The new Bill will extend the law to the private rental sector.
The Bill also seeks to ban bidding wars between prospective tenants, also banning landlords from accepting tenants who offer to pay more than the advertised monthly rent. This has been an ongoing complaint from enancy-hunters. Again, however, there is a risk that landlords will simply advertise the property at a higher rent in the first instance.
The Bill seeks to introduce a new Private Rented Sector Landlord Ombudsman, bringing the private rental sector level with social housing tenants. Further changes include bringing in the Decent Homes Standard, and handing local authorities greater powers and to investigate and impose civil penalties.
How do we create a healthy and competitive rental sector hat provides secure and good quality housing to tenants? The proposed changes are being put forward with the best of intentions and they certainly do aim to protect tenants’ rights in a way that the current legal framework arguably does not. But the market also needs to be attractive to landlords. Landlords need tobe able to make a worthwhile profit and be afforded the flexibility that should come with the taking on the risks and liabilities of property ownership.
The danger is that by making renting out a property more and more onerous, the pool is simply going to shrink further, and prices increase yet higher – how is that going to help anyone? Current renters are certainly going to face a very anxious time in the lead up to the bringing in of the new law.
Charlotte has a busy civil practice, with specialist areas that include residential and commercial property matters. Charlotte acts for tenants and landlords, including a number of social housing providers. She has been invited to speak at the Tenancy Fraud Forum’s conference in November – more details to follow.
If you wish to discuss anything in this article or you want to instruct Charlotte you can contact her clerk on jamie@kbgchambers.co.uk.
