In June 2022, the government released their “Levelling up” white paper, in which they introduced the new Renters Reform Bill. This new 12-point-plan centres around the private rented sector, with specific focus on improving housing, and creating a ‘fairer private rented sector’.
The bill includes the abolition of Section 21, introducing a new private renter’s Ombudsman, and implementing limitations on rent increases and fixtures.
An introduction to the new bill:
The central focus of the bill is to create a ‘fairer private rented sector’, in recognition of the housing crisis facing the UK. This new bill has been described as a “New Deal”, which promotes quality, affordability, and fairness.
High rent prices means many tenants are unable to save and invest in a mortgage, which has led to these individuals being dubbed “generation rent”. In light of this issue, the government’s new bill focuses on the move toward a modern tenancy system to challenge the struggles of renting in the private rented sector.
The bill consists of 5 main aims, including access to good quality homes, improving tenant-landlord relationships, and much more.
What is included in the bill:
The new bill consists of proposals all aiming to create a fairer private rented sector. The bill includes:
- Abolishing Section 21
- Renting with pets, and the tenant’s right to redecorate
- Introducing a new private renter’s Ombudsman
- A legally binding Decent Homes Standard (DHS)
- Limits to augment rent
- A Property Portal for landlords and tenants
- Changes to grounds for repossession
- No more assured shorthold tenancy agreements
- Blanket bans on ‘No DSS’
For further detail on what is included in the bill, refer to our eBook, “The Rental Reform Bill Explained”.
What happens now?
Now that the new bill has been explained, there now stands the question of ‘what now?’.
Who will reinforce the new bill?
The newly proposed Ombudsman and local councils will be in charge of reinforcing the new bills’ aims. Funds from the government to councils will be used to track and catch criminal landlords through issuing “banning orders”, and starting the building and repairs for low-quality housing.
The hope is that this will prevent drawn-out court procedures, and settle issues quicker. In addition, this will also support plans to improve housing, turning them into more suitable homes.
When does it become law?
Before the bill becomes law, it needs to pass through the House of Commons, and the House of Lords, which can take as long as two years, or even longer. Alongside this, the manifesto will face a series of revisions before it becomes legislation, meaning there will likely be a few tweaks to the initial plans. It is estimated the bill will become law after 2024.
Who does the bill affect?
The new bill will affect many individuals, however the favour sits with tenants for the most part. Many landlords and property managers will need to transform their current strategies to comply with the new proposals.
Not everyone will agree with the terms of the new bill. Paul Shamplina, founder of Landlord Action, expressed his concerns regarding the new bill, stating he has “reservations, particularly over the removal of fixed-term tenancies”. There is uncertainty regarding the impacts on landlords’ income and control over their portfolio.
What now?
The government will now consider amending the Protection from Eviction Act 1997. This is with the aim of extending the goal to protect tenants, clamp down on illegal evictions, and collaborate with local authorities to challenge poor practice.
In addition to this, private landlords will also be required to join the new Ombudsman.
Finally, landlords will now be required to provide a written tenancy agreement. In this agreement, there must be the basic information about the tenancy and the responsibilities. This aims to prevent future disputes and court proceedings.
How to prepare for these changes:
With there being so much uncertainty surrounding the proposed changes, there are a few steps you can take to prepare yourself.
Ensure your properties comply with the new standard, and begin thinking of how to mediate tension between staff, landlords, and tenants.
If you’re managing a large portfolio, ensure you have an upgraded filing system to keep tenancy information and property conditions in check. With these upcoming changes, it’s important to remain compliant with the new rules.
*Disclaimer: please note this blog is only intended as a guide, and is not to be taken as legal advice*
