Impact of ‘headline-grabbing’ English rent reform Bill ‘remains to be seen’

The UK government said its new Renters (Reform) Bill was a “once-in-a-generation overhaul” of private tenancy rules that would “empower renters to challenge poor landlords without fear of losing their home”.

Sarah Campey, a property disputes expert at Pinsent Masons, said that the UK’s legislative timetable could delay implementation of the reforms. “With an election on the horizon there is limited time for the Bill to progress through parliament. How quickly it progresses will depend on the number of amendments at the various stages and how the government chooses to prioritise parliamentary time.”

“We know the reforms are contentious and it remains to be seen when the Bill will receive Royal Assent and what amendment will be made to the final Bill. At best, it looks like the Bill will not proceed into law before 2024. However, after delay and uncertainty, the publication of the Bill provides some clarity and enables landlords to plan for the changes,” she said.

The Bill would abolish assured shorthold tenancies, creating a single system of periodic fixed-term assured tenancies. Campey said that, in many instances, existing fixed-term tenancies provide greater security for tenants and landlords alike and tenants will be able to end a tenancy at any time by giving two months’ notice.

Nicola Charlton of Pinsent Masons said the Bill contained a number of headline-grabbing reforms. “The ban on no-fault evictions was a Conservative manifesto pledge back in 2019 and has been one of the most talked-about topics in housing reform over the last few years,” she said. “The removal of the no-fault ground will leave landlords only being able to evict on fault-based grounds and reasonable circumstances to evict a troublesome tenant.”

“At the same time, however, the Bill will broaden the list of disruptive activities that can lead to eviction and notice periods will be reduced where tenants have breached their tenancy agreement. This does however raise questions about what will now constitute anti-social behaviour and how a landlord must evidence this,” Charlton said. 

A new ombudsman is proposed to resolve low-level disputes between landlords and tenants without the need to go to court, in addition there will be a new online property portal which is proposed to provide a hub of rental information aimed at both tenants and landlords. “It seems the idea of the hub is that is that it will enable landlords to understand their legal obligations easily and quickly and ensure tenants can make informed decisions about whether to sign up to a tenancy agreement,” Charlton said.

She said that the government was expected to add new provisions to the Bill later in the legislative process, including requirements for rented homes to comply with the Decent Homes Standard. “The Standard stipulates how properties must be free from serious health and safety hazards which currently only applies to the social housing sector,” Charlton said.

“There are also plans to increase rights for families with children and people on benefits. It will be made illegal for landlords or letting agents to have blanket bans on renting to families with children or those on benefits. The government also plans to strengthen councils’ enforcement powers and introduce a new requirement for local authorities to report on enforcement activity. This is hoped to crack down on criminal landlords,” Charlton added.

The Bill also contains provisions to limit rent increases to a maximum of once every 12 months, with two months’ notice, with tenants empowered to apply to challenge any rise at a tribunal. Despite this, Campey said the proposed measures would not go far enough for those calling for stricter rent controls. She suggested that a proposed new mandatory ground for possession based on repeated rent arrears, known as ‘Ground 8A’, might also be challenged by tenants as being too harsh and by landlord who face delays by giving four weeks’ notice and waiting a further four weeks before possession proceedings can be issued.

“According to Ground 8A, if a tenant has at least two months unpaid rent for at least a day on at least three separate occasions within a three-year period, four weeks’ notice must be given before they are evicted. This is likely to be the subject of further debate as MPs try to balance safeguards for tenants and redress for landlords”, she said. The Bill would also allow a landlord to obtain possession in order to sell their property. ‘Ground 1A’, however, cannot be used within six months of the start of a tenancy, and two months’ notice must be given to the affected tenants.

The Bill also resolves an issue with long leases that were granted for a premium before the 2022 Leasehold Reform (Ground Rent) Act came into force. Campey said: “Currently these leases can inadvertently become Assured Shorthold Tenancies (ASTs) if the ground rent rises above a certain threshold. The consequence of this can be significant – as a landlord might be able to seek possession based on ‘Ground 8’ – mandatory rent arrears.”

“Similarly, if a landlord wanted to sell their interest in the property, the tenant under one of these inadvertent ASTs would also not benefit from the rights of first refusal in the 1987 Landlord and Tenant Act,” Campey said. To fix this, the Bill stipulates that tenancies of more than seven years cannot become assured tenancies.

In a statement following the introduction of the Bill, the government said the Ministry of Justice and HM Courts and Tribunals Service were working to “ensure that, in the small proportion of tenancies where court action is required, court users can use a modern, digital service.” Campey said this reform would be “key” to ensure the future of the private rented sector is sustainable. “The process needs innovation to be quick and efficient. This is a big task and one which is long overdue,” she said.