Renters reform – where are we now?

South East Farmer readers may be aware that the Government has long pledged to introduce key reforms to residential lettings system, chiefly to enhance protections for tenants.

The Renters (Reform) Bill, currently passing through Parliament, encapsulates the Conservatives’ commitment to reform and, most notably, aims to honour the party’s previous manifesto pledge to ban ‘no-fault’ evictions.

The Bill’s voyage through Westminster has been somewhat glacial! First mentioned in the Queen’s Speech of December 2019, it took until May 2023 for the Bill to be introduced to Parliament. Its second reading in October 2023 came with additional promises of reforms to the court system to speed up the eviction process.

This is the biggest planned change to residential lettings in over 30 years, so there are complex issues to work through. Yet this leaves both landlords and tenants in a tight spot – unable to forecast the future, not knowing if the Bill will be enacted before the general election.

I know, from speaking to clients, that above all, they wish for certainty so that they can make effective plans.  Unfortunately, some landlords are already exiting the market. Others are hesitant to let properties, for example, not letting property within the farm estate, in case they are not able to recover possession in the future. This dwindling supply of rental properties adds pressure to the lettings market.

So, with all this uncertainty, what changes might landlords and tenants expect, should the Renters (Reform) Bill become law?

Assured Shorthold Tenancies

The Bill would abolish all Assured Shorthold Tenancies (ASTs). All tenancies would become Assured Tenancies, which provide greater tenant protection. No new ‘fixed term’ tenancies could be granted with all tenancies becoming ‘periodic’ tenancies of no longer than one month period.

This would be a significant change as typically an AST would have a standard minimum term of around 6 to 12 months (sometimes longer). Some tenants prefer the security provided by a fixed term – which would be lost by these reforms, leaving uncertainty over the tenancy’s duration.

A ban on no-fault evictions

The Bill would also abolish Section 21 Housing Act 1988 – the ‘no-fault’ ground for eviction which enables landlords to repossess their properties without having to show fault on the part of the tenant.

Instead, the government would introduce some new grounds for possession, including for landlords to recover possession of a property if they want to sell it or move a close family member to live in the property. However, these are still grounds for possession where the tenant is not at fault!

In addition, there will be strengthened grounds if tenants breach their obligations or persistently don’t pay their rent on time.

Rent review

Under the new proposals a landlord would only be able to increase the rent once a year, with provision for that rent to be reviewed independently – to establish whether it’s a reasonable increase.

The right to a pet

Much to the applause of animal lovers, tenants would have the legal right to have a pet in their home, which the landlord must consider and cannot unreasonably refuse.

Other measures include the introduction of a new ombudsman which will aim to resolve landlord and tenant disputes, a new landlord database and increased local authorities’ enforcement powers.

Election uncertainty

At the time of writing, the Bill remains parked in the House of Commons. The Government suggests it would not ban no-fault evictions until the court system has been reformed, which is likely to take time and may not be achieved before the election. However, as all the main political parties support repealing section 21 it seems likely that the days of no-fault evictions are numbered.

James Millis is a Partner in the Dispute Resolution Team at Brachers who specialises in property disputes. He regularly advises companies, charities, colleges, NHS Trusts and individuals in relation to all aspects of property-related disputes.

This article was first published in the April 2024 edition of South East Farmer.

This content is correct at time of publication