The Renters (Reform) Bill – Where are we now?

When the Renters (Reform) Bill was first announced in 2022, the Conservative Government were seeking to follow through with their manifesto promise to finally remove the right of Landlords to serve a section 21 (no fault) notices on tenants.  However, shortly after the Bill was presented to Parliament in May 2023, it appeared that the Government had kicked it into the long grass by explaining that it could not be progressed into law until the Courts could deal with the changes.

Claire Darby, Head of Dispute Resolution, deals with the County Courts on a daily basis and knows how slow the Court system is at the moment for Possession Claims. Therefore it was a relief for her to hear that the Government planned to try to deal with this before implementing new changes.  We had hoped to hear that some funding would be put in place to ease the current pressures, which would likely take some time.  However Michael Gove, Housing Secretary, appeared on Laura Kuenssberg’s Sunday Morning BBC show on 11 February 2024 to say that the ban would come into force by the next election.  What steps he plans to make to ensure that the Courts can deal with it is less clear.

Most of our Possession Claims are in the London or Surrey County Courts, as the claims are based in the Court which is closest to where the rented property is.  We are currently experiencing some of the worst delays with claims, some of which are as bad as during the Covid periods in 2020/2021.  When we telephone the Courts to find out the status of a claim or piece of correspondence we are often told that the Courts have 80-100 day turnaround time to look at paperwork.  This is causing many landlords to struggle to get Possession Orders, even with so called “Accelerated claims” which can be used after serving as section 21 notice.

The Government will have to do something about this if landlords are going to have to show a reasonable reason why they need to get a Possession Order and a hearing to decide this.

So what did the Renters (Reform) Bill promise?

The headlines surrounding the Renters (Reform) Bill were all surrounding the removal of “no fault” evictions.  However, the Bill also makes a lot more changes.  The Government website says the overall effect of the Bill was to “deliver on the government’s commitment to “bring in a better deal for renters”, including abolishing ‘no fault’ evictions and reforming landlord possession grounds.”

So what other changes does it bring?

1. Removes the usual contractual term of a tenancy agreement, moving to a structure where all assured tenancies are “periodic”. 

Currently after the end of a fixed term, such as 12 months, the tenancy turns into a periodic tenancy.However, the changes would mean that there would be no specific period which the tenant would be signing up for when they start a tenancy.

2. Introduces new grounds where landlords can recover their properties. 

Currently the Housing Act 1988 gives 17 grounds on which landlords can gain possession.Some of these are mandatory but others are discretionary. The Bill will introduce more grounds, such as when the landlords wish to sell their property or move in close family into the property.Currently these are often reasons why landlords serve a section 21 notice.

The Bill promises to make it easier to repossess properties where tenants are at fault, for example in cases of anti-social behaviour or repeat rent arrears.The new grounds will mean that the current section 8 process is followed, but the grounds are widened.

3. New changes to ensure tenants are able to appeal excessively above-market rents.

The Government is introducing this as they believe some landlords try to encourage their tenants to move out voluntarily by telling them they are increasing the rent by an excessive amount which they know the tenant will be unable to afford.  The new rules will allow tenants to appeal above market rents.

Currently tenants can go to the tribunal to seek a determination as to the market price for their property and ask a Judge to decide what this should be.  In practice, it is questionable as to how many renters will actually use this process.  Although removing the threat of a section 21 notice if the tenant does want to challenge may mean that it is utilised more.

4. Introduce a new Private Rented Sector Ombudsman

The idea behind this is to provide a “fair, impartial, and binding resolution to many issues and prove quicker, cheaper, and less adversarial than the court system.”  We will have to wait to see what their remit will be.

5. Create a Privately Rented Property Portal

This will help landlords understand their legal obligations and demonstrate compliance and give tenants better information to enable them to understand their rights when entering into a tenancy.

6. The right to request a pet

Currently renters are often told that they are not allowed to have a pet because landlords are concerned about the damage which may be caused by the animal(s).  However, the new rules mean that the landlord must consider and not unreasonably refuse a request for a pet.  The landlord may require the tenant to take out pet insurance to cover any damage to their property. Again, it will be interesting to see in practice how this will be policed.  What is considered reasonable refusal? On what basis are landlords allowed to refuse?  It remains to be seen what guidance will be given on this.

What should landlords be doing now?

Don’t leave bad tenants in your property.  If you have a tenant who delays paying or regularly misses payments and you have refrained from taking any steps against them, consider doing so now before the ban comes into force.   It will likely become harder to get them out of your property once the Bill becomes law.

Make sure you are up to date with your tenancy requirements such as serving How to Rent guides, EPCs, protecting your tenancy deposit and making sure your electrics and gas appliances have been checked.  Currently these are not prerequisites to serving a section 8 notice.  However, we anticipate that this loophole will be tightened and landlords may be required to show compliance before a Possession Order is granted.

We will have to see what steps the Government make to ensure that the Bill can make it into law and what they can do to help with the current backlog of claims which are still working their way sluggishly through the system.  If the Conservatives are keen to show they are not reneging on their promises to ban no fault evictions, then they will need to take some serious steps to improve the current system.  If landlords have to wait 4-5 months before their claims are heard, then more and more landlords will be removing themselves from the private rented system and the demand for rented properties will become even greater than it currently is.  This cannot be a good thing for anyone.

If you would like to discuss starting a Possession Claim then please contact Claire Darby for a free no obligation chat on 0208 949 9500 or email her on cdarby@pearsonhards.co.uk.