After being promised earlier this month and delayed due to “procedural issues”, the first draft of the Renters (Reform) Bill has now been published by the government and can be found here.
This has been a much-anticipated bill and the proposed overhaul of the private rental sector has spanned several prime ministers and a general election or two. The Bill promises to reform the private rental sector in favour of tenants by providing greater security and better-quality housing.
Some key changes include:
- Assured shorthold tenancies to be abolished bringing about the end of the “Section 21” notice and no-fault evictions. New grounds for possession under Section 8 of the Housing Act 1988 will be introduced. The proposed grounds make provisions in the event the landlord wishes to sell, or a member of their family wishes to move into the property. There are also new grounds to obtain possession if a tenant is at fault, for example, on the basis of antisocial behaviour or if there are repeat rent arrears.
- Fixed terms are to be a thing of the past with proposals to make tenancies periodic and give tenants flexibility to move out when their housing needs change.
- Tenants will have a right to request permission to have pets in the property. There is now an obligation on landlords not to unreasonably refuse such a request.
- The draft Bill provides a statutory mechanism for increasing the rent and aims to provide protection to tenants from “back-door” evictions from landlords who might have considered raising rents to price tenants out.
- A new ombudsman scheme which landlords must join with possible financial penalties in the event of breach.
Whilst some have welcomed the changes proposed by the Bill, it has also faced some criticism. There are concerns that the proposals are likely to result in many investors and buy-to-let landlords selling their portfolios which may inadvertently create a housing shortage and worsen the current housing crisis. There are also concerns that the anti-social ground for possession could have an unexpected impact on victims of domestic violence and that the court system, which is already overwhelmed, will face additional pressure and its backlogs will only continue to worsen. The Bill is in its infancy and will need to progress through the House of Commons and House of Lords before it can gain royal assent. It will certainly be interesting to see if any amendments are introduced to deal with these criticisms.
As it progresses through the various stages, changes are likely to be made but the Bill will undoubtedly overhaul the residential rental market. Landlords and investors are likely to be keeping a very close eye on the developments to come.
Our real estate disputes team will be discussing the draft Bill and proposed changes in a podcast that is to be released later this month.