The Renters’ Rights Bill

1. Introduction

The Renters’ Rights Bill (“Bill”) is set to bring the biggest shake up to the private rented sector in England for over 30 years, with the Government saying that “it will give renters much greater security and stability so they can stay in their homes for longer”.

The Bill returned to the House of Commons for its third reading in mid-January 2025 and it is anticipated that it will become law by summer 2025, so it is important that landlords in the private rented sector are up to speed with what’s proposed and understand how it may impact them going forward.

Our summary below sets out some of the key reforms proposed by the Bill to assured tenancies as at the date of its preparation.

2. End of fixed term assured tenancies

Under the Bill, all assured tenancies will be periodic tenancies and can no longer have minimum fixed terms, with tenants effectively able to stay in their home until they decide to end the tenancy by giving their landlord two months’ notice.

As well as applying to new assured tenancies to be put in place after the Bill comes into effect, it is expected that any minimum term included in an existing assured tenancy will cease to have effect i.e. existing assured tenancies in place as at the date the Bill becoming law will also be converted into periodic tenancies automatically.

3. Abolition of “no fault” evictions and changes to grounds for possession by landlords

Critically, the Bill provides more security for tenants by abolishing landlords’ “section 21” rights to terminate assured tenancies following expiry of their fixed term without providing a reason by serving two months’ written notice.

Instead, landlords seeking possession will have to rely on one of the section 8 grounds (via court proceedings if the tenant does not vacate the property following expiry of the landlord’s notice). The Bill will add some new grounds for landlords to obtain possession and, in some cases, extended the notice periods required for these to apply.

Grounds for possession (as published by the UK Government) summarises all of the grounds for possession proposed under the Bill and the notice period expected to be applicable to them but the grounds we expect to be most commonly used by landlords are:

• Rent arrears – it is proposed that the threshold will increase from two to three months’ arrears and that the notice period will increase from two to four weeks to allow tenants more time to repay arrears. In addition, any amount that was unpaid only because the tenant had not yet received a Universal Credit payment will be ignored when calculating the amount of unpaid rent. A separate discretionary ground for “persistent rent arrears” (regardless of whether the tenant is in arrears on the date of commencement of possession proceedings) is also suggested;
• Sale of property – after the first 12 months of the tenancy, the landlord may be able to serve four months’ notice of an intended sale of the property (though how an intention to sell is to be proven remains to be clarified);
• Landlord or their close family member wishes to move into the property – this will only apply after the first 12 months of the tenancy and the landlord/their close family member must be intending to occupy the property as their only or principal home, though there will be no requirement for them to have previously lived in the property; and
• Severe anti-social/criminal behaviour – under the Bill, landlords could commence proceedings immediately where tenants or anyone living in or visiting the property has been causing a nuisance and/or the tenant has been convicted of an indictable offence in the locality (but the court would not order possession in less than 14 days from the making of a court order).

The landlord will need to provide supporting evidence in court to prove that the relevant ground applies (it is expected that more detailed guidance will follow on this).

Landlords should also be aware that they may be prevented from gaining possession if they have not properly protected a tenant’s deposit or registered their property on the private rented sector database (see below for more details).

4. Restrictions on rent reviews

Landlords will only be able to review rents once per year and the review can only be to the open market rate (which can be downwards as well as upwards) – that is, the price that would be achieved if the property was newly advertised to let. To do this, they will need to serve a ‘section 13’ notice, setting out the new rent proposed and giving at least two months’ notice of it taking effect.

If the tenant disagrees with the revised rent proposed by the landlord, it will be able to refer the review to the First Tier Tribunal for determination without fear of the landlord terminating the tenancy on non-fault grounds, the rent review being backdated to before the First Tier Tribunal’s determination or of the rent exceeding that initially proposed by the landlord.

Importantly, rent review by any other means (such as rent review clauses within a tenancy agreement which provide for fixed or stepped increases) will no longer be permitted.

5. New cap on advance rental payments

Once enacted, the Bill will prohibit landlords or letting agents from requiring or accepting any payment of rent in advance of the tenancy being entered into – a landlord will only be able to require up to one month’s rent once a tenancy agreement has been signed and before commencement.

The Bill will also provide that, once a tenancy starts, a landlord will be unable to enforce any terms in it that require rent to be paid in advance of the agreed due date.

6. Outlaw on rental bidding

Once enacted, the Bill will require landlords and letting agents to publish an asking rent for their property and it will prohibit them from asking for, encouraging, or accepting any bids above this price.

7. Children, benefits and pets

Under the Bill, landlords will be banned from outright refusing tenants simply because they have children and/or are in receipt of Universal Credit.

Tenants will also be able to request permission for a pet and landlord’s cannot just say no without a good reason, though the Bill envisages that it will be reasonable for landlords to require pet owning tenants to carry insurance (further guidance is expected before the new rules come into effect).

8. Introduction of Decent Homes Standard and application of “Awaab’s Law”

The Bill introduces a Decent Homes Standard in the private rented sector for the first time, with a view to ensuring that all rented accommodation is safe and decent. If a privately rented property fails to meet the requirements, the local council will have a range of enforcement mechanisms available including issuing an improvement notice requiring the landlord to remedy the failure in a specified timescale and civil penalties and criminal prosecution for non-compliance.

Similarly, the Bill extends “Awaab’s Law’’ (which was introduced for social housing in 2023 following the tragic and avoidable death of two year old Awaab Ishak as a result of prolonged exposure to mould in his social rented home) to privately rented homes, placing a responsibility on landlords to take swift action to make homes safe and, again, making enforcement action for non-compliance capable of being brought against them through the courts.

9. New landlord registration requirements and Ombudsman service

The Bill will introduce a new Private Rented Sector Database, with which all landlords of assured and regulated tenancies will be legally required to register themselves and their properties.

The Government says the database is intended to provide a ‘one stop shop’ for landlords allowing them to access relevant guidance and ensuring landlords have access to simple up-to-date information about their responsibilities.

For tenants, the database is intended to increase transparency and the information available before they decide to rent a property and throughout their renting journey, to allow them to take effective action to enforce their rights and be aware when they can escalate issues.

The Government also proposes the introduction of a Private Rented Sector Landlord Ombudsman, which all private landlords with assured or regulated tenancies will be required to sign up to by law (including those who use a managing agent). It is anticipated that landlords will need to pay an annual fee per property registered (though no details of the proposed fee have been published yet).

Tenants will be able to use the service for free to complain about landlords’ actions or behaviours (the Bill doesn’t specify the types of complaints that the service will consider so it is likely that the Ombudsman will have discretion) and the service will have powers to compel landlords to issue an apology, provide information, take remedial action, and/or pay compensation.

10. Enforcement

In addition to tenants’ abilities to refer issues to the Private Rented Sector Landlord Ombudsman for free as referred to above, local councils will be given enforcement and investigation powers and both the Ombudsman and local authorities will be able to levy sizable civil penalties of up to £40,000 for landlords’ breaches.

For serious and repeat non-compliance, criminal prosecutions with unlimited fines could also apply. Furthermore, rent repayment orders are being extended, so the maximum amount of rent a landlord can be ordered to repay will double to 24 months’ worth.

11. Conclusion

The Bill makes substantial changes to the private rental sector, enhancing tenant protections and increasing landlords’ obligations significantly.

If you are a private landlord of a private residential property and are concerned about how the proposed changes could affect you, please contact our expert property advisors for advice.

Natalie Kay // Jamie Brown // Alex Smith

 

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