Renters Reform Bill: Everything You Need To Know

The Renters’ (Reform) Bill has changed a lot since first being introduced in 2023 by the Conservative government. After the new Labour government came into power, they took the Renters’ (Reform) Bill and changed it slightly to the Renters Rights Bill, which contains many of the same details. This bill aims to reform the private rental sector and could bring big changes to the world of property investment. I will look at the main part of the Bill and how it can affect UK landlords and property investors.

Table of Contents

What is the Renter’s (Reform) Bill?
What is the Difference Between the Renters’ (Reform) Bill and the Renters’ Rights Bill?
Will Section 21 Notices be Banned?
How Will The Renters’ (Reform) Bill Affect Landlords?
How to Prepare for the Renters’ Rights Bill

What is the Renter’s (Reform) Bill?

The Renters’ (Reform) Bill was introduced to Parliament in May 2023 and aimed to reform the private rental sector and improve housing quality in the UK. It follows a white paper called “A Fairer Private Rented Sector) published by the government in June 2022. This paper highlighted the problems within the private rental sector such as people living in damp, cold or dangerous homes and the threat of eviction if the tenants raise these issues with the landlord. Many tenants also face discrimination by landlords who will not rent to them if they have children or pets, or receive benefits, leading to housing insecurity and even homelessness. One of the main aims of the Bill is to ‘abolish’ Section 21 or ‘no fault’ evictions to offer renters more peace of mind. Under The Housing Act 1998, Section 21 notices are not valid in cases where a tenant has issued a complaint in writing to the landlord regarding the condition of their property – however many tenants are not well-versed in their rights and a few unscrupulous landlords take advantage of this. The Bill aimed to provide more clarity to landlords and tenants about their rights and responsibilities.

This Bill did not get passed in UK law before the general election in July, in which the Labour Party came into power. The King’s Speech of July 2024 mentioned the Renters’ Rights Bill, a new version of the Renters’ Reform Bill. It will address the same issues as the original Bill.

What is the Difference Between the Renters’ (Reform) Bill and the Renters’ Rights Bill?

As mentioned previously, the two Bills are very similar and aim to solve the same problems, so there is not a huge amount of difference between the two. The Renters’ (Reform) Bill intended to abolish Section 21 ‘no fault’ evictions once improvements had been made to the court process for evictions, but Labour made a bolder promise to abolish Section 21 right away.

The Renters’ (Reform) Bill initially planned to end rent review clauses but did allow rent increases in line with market rates. The Renters’ Rights Bill makes similar plans but does not state whether landlords can increase rents in line with market rates. Although Labour has said they do not plan to introduce rental controls, they have pledged to challenge rent increases intended to force tenants out and end rental ‘bidding wars’ between landlords and letting agents. Landlords will likely be able to increase rent, but tenants can challenge rent raises if they feel it is disproportionate.

Both Bills planned to introduce the Decent Homes Standard to the private rented sector as well as the social housing sector. This means that privately rented houses must be in a reasonable state of repair, have reasonably modern facilities and services (kitchens should be less than 20 years old and bathrooms should be less than 30 years old), have effective heating and insulation that enables two or more rooms in the home to be heated. The Renters’ Rights Bill also includes Awaab’s Law, which requires landlords to investigate health hazards in a property reported by the tenants within 14 days and perform needed repair work in a ‘reasonable time period’ as defined in the Landlord & Tenant Act 1985. This law is named for Awaab Ishak, a 2-year-old who tragically died as a result of extensive mould in the property he lived in with his parents.

Will Section 21 Notices be Banned?

As mentioned previously, the Renters’ Rights Bill does plan to abolish ‘no fault’ evictions where the landlord does not have to give a reason for evicting tenants. This is because some landlords were using eviction as a weapon against tenants who made a complaint about the property or wanted to increase rent by more than market value. Even if Section 21 is scrapped, according to the King’s Speech in July, landlords will still be able to ‘reclaim their properties when they need to’. Landlords are still able to evict tenants under a Section 8 notice if they are not paying rent or are in breach of their tenancy in another way.

How Will The Renters’ (Reform) Bill Affect Landlords?

While it seems like the Renters’ (Reform) Bill and the Renters’ Rights Bill offer landlords fewer rights than ever, many landlords feel that the Bill will help tackle the few unscrupulous landlords who tarnish the reputation of good landlords who take care of their properties and take tenants’ complaints seriously. The Bill will also introduce a private rental sector ombudsman who can help mediate and resolve disputes between landlords and tenants without getting the courts involved.

How to Prepare for the Renters’ Rights Bill

At the time of writing (September 2024) the Renters’ Rights Bill is undergoing the 2nd reading in the House of Lords and will have to pass through several more stages before it passes into law. Landlords can however make preparations now for when this law comes into effect by taking the following steps:

Make sure all properties are in good condition. Conduct regular inspections, undertake needed repairs, take action on tenant complaints, and familiarise yourself with the Decent Homes Standard to make sure your properties are up to scratch.
Review all tenancy documents to make sure they are compliant with all new legislation and keep records of all communication from tenants.
Make sure the rent is set at market rates. Some landlords go a long time without a rental review and then suddenly increase the rent on a property when they realise it is below market value, consider incremental rent increases over time, or as often as permitted by new legislation to keep making a profit and be compliant with the law.

Before you go …

I hope this is helpful – remember, you can learn more about the exciting world of property investment by joining me, Liam J Ryan, and other property gurus at one of Assets For Life’s FREE property events – click here to sign up now.