Renters’ Rights Bill 1: Residential tenancy changes proposed by the Bill

The Renters’ Rights Bill is due to start its second reading in the House of Commons today (9 October 2024). 

The Bill proposes significant changes to the residential rented property regime in England. 

Removing a landlord's ability to give no fault notice bring a tenancy to an end (known as a section 21 notice) and the right to request consent to keeping a pet are the two measures that have caught the media's eye.

But the Bill also provides for major increases in security of tenure for tenants, details a far more interventionist approach to private rental arrangements and, perhaps, some tentative steps back towards rent control.  

The headlines from the Bill at this early stage include:

1. Abolition of Assured Shorthold Tenancies.  That is more fundamental than simply removing no fault notices.  If Assured Shorthold Tenancies are abolished, the default residential letting will be an Assured Tenancies as standard, without the opportunity to opt out.  That is more restrictive than the law has been at any point since the Housing Act 1988 came into force.  Critically, Assured Tenancies also carry succession rights.
2. Alterations to the grounds for possession.  These include:
   1. new ground for possession for intended sale – the devil will be in the detail there, in terms of how intention to sell is proved.
   2. alternate grounds for possession of property required for employee accommodation (including agricultural workers), and for regaining possession after end of employment.
   3. If the landlord is seeking possession due to rent arrears, an increase in the level of rent arrears required to 13 weeks, in place of the current 8 or 3 months in place of the current 2.  There is also a new caveat that will avoid reliance on rent arrears if arrears have accrued due to delay in receipt of Universal Credit.
3. New landlord registration requirements and increased regulation.  
4. Significant anti-discrimination provisions to assist tenants with children or who are in receipt of benefits.
5. The right to request consent to keep a pet. 
6. A focus on rent review.  There is already a statutory mechanism both for rental increase and determination of rent.  The Bill makes amendments that indicate that the government anticipates this mechanism will be more widely used.  Could this be the first step towards normalising a Tribunal-determined “open market rent” rather than letting the market decide?  
7. Provisions that aim to prevent rental bidding.  This will be achieved by holding landlords to the advertised rent, prohibiting them from accepting more.  The government describes the current position on rental bidding, especially in large cities, as “exploitative”. 
8. Substantial penalties.  Landlords who breach the legislation face civil penalties of up to £40,000 for repeat/serious offenders, or criminal prosecution.  This indicates a considerably more regulated and policed future rental market. 

All these changes – even if they are moderated as the Bill progresses – will be significant for landlords, whether they are small scale landlords or owners of extensive portfolios.  

All of these changes will need to be carefully drafted and managed to avoid forcing smaller landlords out of the market, potentially reducing the supply of rented homes.  The prime market (tenancies for an annual rent of £100,000 or more) will remain outside of the scope of this legislation.   

We’ll be publishing a series of short articles over the coming weeks exploring the Bill in more detail.