What the proposed Renters’ Rights Bill means for Landlords in the UK

A little bit of background:

The proposed Renters’ Rights Bill is set to replace the former government’s Renters’ Reform Bill, which was shelved ahead of the 2024 general election. The Conservative government had first pledged to ban no-fault evictions in 2019, but had still failed to do it before the general election (although, not for a lack of trying).

In June, ahead of the general election, Labour said it would immediately ban no-fault evictions in terms of section 21 of the 1998 Housing Act if it formed the next government. Subsequently, in the King’s speech, it was noted that: “Legislation will be introduced to give greater rights and protections to people renting their homes, including ending no-fault evictions and reforming grounds for possession.”?

Everything we know so far about the proposed Renters’ Rights Bill:

According to the background briefing notes informing the King's 2024 Speech (as published by the Offices of the Prime Minister):

“More than 11 million people in England live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction. The government is determined to address the insecurity and injustice that far too many renters experience by fundamentally reforming the private rented sector and improving the quality of housing in it.”

The background briefing notes thereafter outlines how the government plans to overhaul the private rented sector using the Renters’ Rights Bill, which included the following:

• abolishing Section 21 ‘no fault evictions’, removing the threat of arbitrary evictions and increasing tenant security and stability. New clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to.?
• strengthening tenants’ rights and protections, for example empowering tenants to challenge rent increases designed to force them out by the backdoor and introducing new laws to end the practice of rental bidding wars by landlords and letting agents.?
• giving tenants the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed.?
• applying a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard free – tackling the blight of poor-quality homes.?
• applying ‘Awaab’s Law’ to the sector, setting clear legal expectations about the time frames within which landlords in the private rented sector must make homes safe where they contain serious hazards.?
• creating a digital private rented sector database to bring together key information for landlords, tenants, and councils. Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most.?
• supporting quicker, cheaper resolution when there are disputes – preventing them escalating to costly court proceedings – with a new ombudsman service for the private rented sector that will provide fair, impartial and binding resolution to both landlords and tenants and thereby reducing the need to go to court.?
• making it illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property – so no family is discriminated against and denied a home when they need it.?
• strengthening local councils’ enforcement powers. New investigatory powers will make it easier for councils to identify and fine unscrupulous landlords and drive bad actors out of the sector.

The Pros and Cons:

As a tenant, you’re likely popping champagne and celebrating the protections the proposed Renters’ Rights Bill will, in theory, introduce. As a landlord, however, you’re likely wondering whether this is good news, bad news, or a combination of both. So let’s break it down a bit:

(Possible) Pros for landlords:

1. You will still have measures to regain possession of your property when you need to (without the no-fault evictions);
2. The Decent Homes Standard and Awaab’s law being expanded into the private sector means your property will have to be in a decent condition, and if it isn’t you have specific timeframes within which to make it so. While what exactly is meant by ‘decent condition’ remains to be seen, if the property is in decent condition, it’s easier to both rent and sell anyway (and for a better price than if it weren’t);
3. The Decent Homes Standard also theoretically includes a commitment to ensuring privately rented homes achieve at least a 'C' energy efficiency rating by 2030; which may cause an increase in upfront costs, but in the long term, your energy bill reduces, and it’s good for the planet (which is undeniably a pro);
4. The ‘digital private rented sector database’ theoretically will make it easier for you to find information that is both accurate and relevant to you. It’ll also be a means to show your compliance with your obligations as a landlord; and
5. The new ombudsman service will make it quicker and cheaper to resolve disputes, meaning you’re less likely to need to go through the lengthy and costly process of going to courts for judgement in disputes.

(Possible) Cons for landlords:

1. No-fault evictions will soon be a thing of the past (not surprising given it’s been on the government’s agenda for literal years);
2. Raising rent as a means of getting your tenants out of the property isn’t going to be an option anymore, and bidding wars are soon to be a thing of the past.?
3. You cannot unreasonably deny a pet request, but you can request insurance to cover damages caused by said pet. This could increase your costs of owning (or more specifically renting) the property;
4. If your property doesn’t meet the standards for ‘decent’ condition, you’ll have quite the bill to foot sometime in the future.
5. If you’re not compliant with your obligations as a landlord, it’ll now be easier for both your tenants and council to become aware of this non-compliance, and with the Council’s strengthened enforcement powers, you’ll likely have to become compliant fairly quickly or face a fine; and
6. Your rights to freely choose who you want as your tenants will potentially be hindered by laws aimed at preventing discrimination. We agree that discrimination should be outlawed, but hope that the government succeeds in balancing all relevant interests when drafting the proposed bill.

Overall

Everyone has people they know and love who are renting properties - with 11 million people in England renting their homes, it’d be silly to think otherwise. We should all be glad that they’re theoretically going to be getting greater security and stability. If you’re renting a property yourself, you’re likely also celebrating these proposed protections.

As a landlord, however, you’re probably thinking it’s all doom and gloom and the cost of owning properties is about to hit extreme highs. Given that we (Flyp) literally help people sell their homes day-in and day-out, you might think we’d want to make you panic into selling your properties as quickly as possible, but we’re not that kind of company.

I want you to bear in mind two things:

1. The proposed Renters’ Rights Bill hasn’t even been published yet. That means we don’t know for sure what exactly it will entail, which means we won’t know exactly what changes landlord’s will need to make, or what costs will arise as a result. We simply don’t know.?
2. Once the Bill has been published, it’ll still take time before it becomes law. That means you have time to consider all of your options and to prepare accordingly.

Again, We don’t want you to panic, or to rush into decisions you might regret later. It is okay to wait for more information to become available!

If you do, however, decide you want to sell, we’ll of course be here to assist you in any way we can (whether it’s just getting some information on your market, helping you sell, facilitating rentals while you’re selling, or even helping to bring your property up to standard - there’s a lot we can do to help).?

What are your thoughts on the proposed Renters’ Rights Bill? We'd love to hear how you think these changes might affect your approach to renting.