Landmark reforms of rental rights are getting closer to becoming law, but the changes could result in higher rents.
The Renters' Rights Bill completed its third reading in the House of Lords this week, and amendments will be considered by the government after the summer recess in September before Royal Assent is received.
The bill's "primary goal", said Goodlord, is to give tenants "more security" against unfair evictions and rental increases and "more freedom" to leave substandard properties.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
But the Bill has "set landlords aflutter", said The Times, with warnings that some will exit the market, "driving up rents and causing a reduction in rental properties".
The end of no-fault evictions
The "main headline" of the Bill, said Shelter, is abolishing section 21 notices, known as 'no-fault' evictions. These notices let landlords evict tenants "without stating a legal reason".
Instead, landlords will have to apply for a section 8 notice through the courts. The notice covers specific circumstances in which a landlord can regain possession, including rent arrears, or if a landlord wants to sell the property.
Three months' notice must be given if a tenant is behind on rent, and four months if a landlord wants to sell or move back in. However, this can't be done in the first year of a tenancy.
This has prompted warnings that courts will be "overwhelmed with cases", added The Times, when they are "already struggling to deal with backlogs".
Assured tenancies abolished
Fixed-term assured tenancies will be abolished and will be periodic instead, with tenants able to stay in their home until they decide to end the tenancy by giving two months' notice.
Instead of having an end date, tenancies will "roll on monthly", said Savills.
It is already "more common" for tenants to serve notice than landlords, so the "existing renting pattern" is unlikely to change.
Raising rents
Bidding wars will be banned, said Shelter, meaning lettings agents and landlords can't "invite, encourage or accept offers of rent payments" above the listed price.
Landlords will also only be able to raise rents once a year under the legislation and rent review clauses will be banned from tenancy contracts.
Tenants will be able to challenge increases, but this has raised concerns, said MoneyWeek, "as it is unclear how the appropriate rent will be measured".
Creation of a private rented sector database
Landlords will need to be listed, along with details of their properties, on a private rented sector database.
This will help identify and deter unscrupulous landlords and letting agents", said MoveIQ, but there are concerns about privacy, keeping it updated, and the fact that it will require a level of "digital literacy".
New landlord ombudsman
A new Private Rented Sector Landlord Ombudsman service will be established where tenants can raise complaints.
It will give "binding decisions", said SimplyBusiness, and landlords may have to "pay compensation or make improvements to their property".
Tenant discrimination prohibited
The Bill aims to tackle "indirect and systemic discrimination in rental practices", said estate agency Frost's, by making it "explicitly illegal to discriminate against benefit recipients".
Pets with lets
Landlords "can't unreasonably refuse" a request to have a pet in the property under the law, said Goodlord.
The legislation did have a clause that said tenants would need adequate pet insurance but the National Residential Landlords Association is hoping the government keeps an amendment in the Bill that lets landlords "request three weeks deposit in return for allowing their tenant to keep a pet".
When will the Renters' Rights Bill become law?
The government will be keen to consider amendments and receive Royal Assent before the party conference season in September, said Goodlord, but the "commencement date" will likely be early 2026.
Will the changes help the rental market?
Campaigners have, "perhaps unsurprisingly", welcomed the reforms as they give tenants more security, said MoneyWeek, but there have also been "plenty of warnings" from landlord groups that the changes will "lead to higher rents as more will exit the sector to avoid the extra restrictions".
The Bill has attracted "criticisms and concerns" said the BuyAssociation, but "ideally" it should improve conditions for tenants although "not to the detriment of 'good' landlords", ultimately "creating a fairer rental sector with higher standards and more security for all".
