Renters’ Rights Bill: Progress in Parliament

The Renters' Rights Bill took a step closer to becoming law when it returned to the House of Commons on Tuesday 14 January for its third reading, the final stage before the Bill passes to the House of Lords.  

The key changes coming out of the reading and the new version of the draft Bill are:

• New proposal to cap advance rental payments to one month's rent. This is aimed at decreasing the upfront costs faced by tenants.  MPs, especially those representing London constituencies, gave anecdotal evidence of landlords seeking up to 12 months' rent in advance.  As one MP observed, that could mean tenants needing to pay similar upfront costs to the deposit needed for a property purchase.  
• Increasing the length at which a fixed term tenancy is able to take effect outside of the Bill from the seven years originally proposed to 21 years (the original proposal was discussed in our article Renters' Rights Bill 10: what the Bill won't apply to).  This is an anti-avoidance measure, to address concern that landlords might try to avoid granting assured tenancies by granting fixed term leases for just over seven years but subject to an earlier break right.  A 21 year tenancy could still be subject to a break right but is much less attractive from a landlord's perspective as tenancies that exceed 21 years can carry enfranchisement rights (the tenant gains a right to extend the term or buy the property).  Tenancies that are over 7 years in length and are granted before the Bill becomes law will stay outside the Bill. 
• Removal of guarantor liability after the tenant's death.  This is described “safeguarding bereaved families” by the Government.  It will be important to consider how this interacts with tenancy succession (which was addressed in our article Renters' Rights Bill 5: Succession).
• Extension of Rent Repayment Orders to a superior landlord - this is aimed at “closing potential loopholes” and would enable tenants to seek Rent Repayment Orders against a superior landlord in a chain if an offence has been committed, even if the rent was not paid directly to them.  This could extend liability to a freehold owner who is not involved in the day-to-day letting or management of the property and who has not themselves committed an offence.

The further proposals discussed yesterday indicate continued Government commitment to improving tenants' position in the private rental market.  The timing of the third reading also indicates that the Bill has continued momentum.  

We anticipate that the Bill, subject to some further amendments, is likely to become law in the first half of this year.

On 9 December 2024 we published 10 collected articles working through the different elements of the Renters Rights Bill.  See it here. We will be monitoring as the Bill progresses through the Lords and will publish updates as new proposals and amendments are made.