Landlords: Legal changes to the private rental sector – what’s in it for you?
The Renters Reform Bill has not yet been published but what we do know is that it contains major changes for both landlords and tenants, including the abolition of 'no fault' Section 21 evictions.
Advance warning of its key proposals were laid out in the government's white paper, A Fairer Private Rented Sector, published in June 2022, amid fears for some that it was slanted overwhelmingly in favour of tenants.
However, there is hope that the nitty gritty of these reforms, once they eventually become law, will provide some solace to landlords, many of whom are losing confidence in the market and leaving the sector at a time of unprecedented demand.
What's happening with Section 21 notices?
Section 21 notices - a method of evicting tenants without fault at the end of a fixed term contract with two months' notice - are set to be a thing of the past.
They will be banned from later this year or some time in 2023.
Key to this major change is the phasing out completely of fixed term tenancies with all assured and assured shorthold tenancies transitioning to a single form of periodic tenancy.
These periodic tenancies can only be ended if the tenant chooses to give notice or if the landlord has a valid and lawful reason.
Are there any new possession grounds for landlords?
Many landlords will of course be worried about how they will regain control of their property if the tenant is allowed to stay on indefinitely after a fixed term ends.
The government has indicated that via the Renters Reform Bill, Section 8 of the 1988 Housing Act - under which landlords must prove specific reasons for eviction - will be broadened.
This could be used, for instance, where a tenant defaults or where there are repeated rent arrears or examples of anti-social behaviour.
In addition, a new ground of possession for landlords whose personal circumstances change and who want to sell their rental properties, is to be allowed but only after the first six months of a tenancy has passed.
What are the other key changes to the private rental sector?
- Although tenants will have a right under the proposals to keep a pet in their property, landlords will be allowed to turn down a request if they have a good reason and will also be able to ask for pet insurance as a condition;
- The government says it will reform the court system to address unacceptable delays and make local authorities more accountable when it comes to housing standards;
- A new Property Portal will support landlords and help expose rogue operators;
- The introduction of a 'Decent Homes' specification, part of the government's levelling up strategy, will set up a minimum standard for the private rental sector for the first time;
- Landlords will not be allowed to refuse to rent a property to families with children or those on benefits.
Good or bad news for landlords?
According to Ben Beadle, Chief Executive of the National Residential Landlords Association, the detail of the Renters Reform Bill must retain the confidence of responsible landlords as well as improving tenants' rights.
He said: "We will be analysing the government's plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.
"The eventual legislation needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it."
Get in touch
If you are a landlord and need help with this area of the law, please contact Wards Solicitors' specialist lawyer, James Murray, who is experienced at resolving disputes involving landlord and tenant relationships.
Phone: 01934 428800