Renters Reform Bill - An update from our Head of Property Management

Fri, 19 May 2023 | Legislation

You may have heard that after some back and forth the Renters Reform Bill was introduced to Parliament this week.

Firstly, I want to assure you that we have several months before we will see any actual change of legislation, there are several hurdles to cross in Parliament prior to Royal Assent, there will then be a six months’ notice period prior to a legislation commencement date for all new tenancies and a second later date possibly a further six months for implementation on existing tenancies.

I appreciate that even for us as expert agents in our industry there is a lot to get our heads around so I thought I would look at some of the key areas that will be most relevant and break them down a little for you.

Let’s start with the abolishment of the Section 21 notice, a Section 21 is widely used to gain possession of the property without having to state a reason for doing so, generally used either at the end of a fixed term or if there is a break clause in the tenancy.

The government plan to revoke the use of a section 21 notice and Introduce a new single system for gaining possession of a property under a Section 8 notice, historically the Section 8 has been used when there has been a breach of tenancy, however new grounds will be introduced to allow possession to be granted should a landlord wish to gain possession to either sell or use for themselves or a family member to move into.

Another big change under the new billing is the amendment to the tenancy term, all tenancies will be Periodic from the initial start date, the AST (assured Shorthold tenancy) which was introduced under the Tenancy Act 1988 will no longer be used, it wil be replaced with a new Assured Tenancy agreement, whilst a landlord will need to provide a valid reason under the new Section 8 grounds (no earlier than month 6 of a tenancy), a tenant will be able to provide 2 months’ notice at any time.

The bill will also make way for some changes to tenancy terms, one being the tenants right to have pets, stating that a landlord provide reasonable consent, some good news is that there will be an amendment to the Tenant Fee Act 2019 allowing for a landlord to insist on the tenant taking out a Pet Insurance, secondly there will also be an increased notice period of 2 months for rental price increases during a tenancy term.

Finally, the government will introduce a new Ombudsman, private landlords just as we do as managing agents will be required to be registered to a governing body such as the TPO.

Now let’s remember, whilst this all seems like a lot, change can be a good thing, any good responsible landlord with a good management team working for on their behalf has nothing to worry about. Our statistics prove that tenants are staying in good well-maintained homes for much longer tenancy terms with 86% of tenancies paying an annual rent increase of 8%.