Both landlords and tenants are eagerly watching the progress of The Renters (Reform) Bill 2023, but probably for very different reasons. For Landlords it may include changes which are so fundamental that they may re-evaluate their decision to own buy-to-let property. Whilst for private renters, they will just be keen to have homes where they can benefit from longer-term security.
The Renters (Reform) Bill sets out the Government’s plans to fundamentally reform the private rented sector. Although it was published on 17 May 2023, it’s still currently in its second reading stage through Parliament. The Bill is not likely to receive Royal Assent until the spring of 2024 at the earliest and may not be enacted until autumn 2024. Initially, this law will affect new tenancies only, but after it has been in place for 12 months, it will then apply retrospectively to existing tenancy agreements.
The end of Assured Shorthold Tenancy agreements (ASTs)
UK landlords currently use Assured Shorthold Tenancy agreements (ASTs), which have been around since 1989. This popular type of tenancy agreement benefits landlords over tenants with regards to security of tenure. This is because an AST has a procedure that allows landlords to end a tenancy agreement without any fault on the part of the tenant.
Currently, if a landlord wants to evict a tenant, all they must do is issue a no-fault eviction, being a Section 21 Notice, which would force a tenant to leave a property with eight weeks’ notice once their fixed term rental contract had ended. The landlord doesn’t have to provide the tenant with a reason for eviction.
Big changes
The major change being proposed by the new bill is the abolishment of Section 21 Notice procedure. This means that once the Bill becomes law all new tenancies within the private rented sector will have a new procedure for ending a tenancy which is far more limited in its application. Other changes proposed include:
- Tenants to be given more rights to keep pets
- Removal of current bans on renting to families with children or Department of Social Security (DSS) tenants
- No fixed term tenancy: periodic only – depending on how rents is paid, so no forced lock into terms of 6, 12 or 24 months
- No easy way for the Landlord to end the tenancy unless the Landlord is selling the property or planning to live there, giving the tenant stronger occupation rights
- Rent reviews will end and rent increases will only be allowed once a year
Tenant security and protection
Sarah Campbell, Senior Solicitor, Residential Property at Alsters Kelley said. ‘Proposed changes to residential tenancies go right to the heart of tenant protection and will enhance both their security and aim to improve their rights. Over the years there have been plenty of horror stories from both sides and I believe that this act will strike a fairer balance for both parties and can effectively stop no fault evictions and unreasonable rent increases. However, the much discussed ‘Decent Homes Standard’ isn’t included in the bill, which has led to concern amongst tenant groups’.
Sarah continued. ‘Tenants who default on the conditions of their tenancy, such as non-payment of rent or anti-social behaviour are not given any further protection under the new act and Landlords will still be able to issue evictions in the usual way.’
Sarah concludes. ‘Overall, we welcome the bill, but we are keeping an eye on its development as it passes through the various stages of approval and before it becomes fixed in statute. We will of course let you know of any changes or agreed implementation dates once we know them.’
Support and advice
We can offer support and advice about all types of residential property sales and purchase from all five of our offices across Coventry and Warwickshire. For timely and quality advice, please contact Sarah Campbell, Senior Solicitor, Residential Property Department at Alsters Kelley on 01789 299115 or email sarah.campbell@alsterskelley.com.
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