Renters’ reform bill: what will it mean for landlords and tenants?

Published: 17/06/2022 By Lucy Goodgame

The Queen’s speech at the state opening of parliament last month, which was delivered for the first time by Prince Charles, included plans for legislation that seek to drastically reform the rental sector within the next parliamentary year. Described by many as the biggest change to renters’ law in a generation, this Renters’ Reform Bill aims to deliver a better deal for the 4.4m households in England’s private rented sector. An outline of details has now been released, with full details expected imminently. 

The reforms will apply to both the private rented sector and to social housing, but what will The Renters Reform Bill actually mean for landlords and tenants?
Much of the intention of The Renters Reform Bill is towards protecting and helping the country’s 4.4 million renting households. However, landlords have not been forgotten, as some of the proposals are geared towards them. The four main areas of reform are as follows:

1. The abolition of Section 21 evictions:
Abolishing Section 21 of the 1988 Housing Act will put an end to "no-fault evictions", where landlords can evict a tenant without having to give a reason. A briefing document said abolishing Section 21 notices will empower renters to “challenge poor practice and unfair rent increases without fear of retaliatory eviction”.

At the same time, Section 8 grounds are expected to be revised and strengthened to assist landlords who wish to reclaim their homes, such as when they want to sell or move into the property themselves, or when they have tenants who are behind on their rent. These measures deliver a fairer system for good landlords who can struggle to recover their properties when faced with anti-social behaviour or willful non-payment of rent.

These reforms aim to strengthen landlords’ rights of possession and will seek to provide a “fair and effective market” for both tenants and landlords.

2. The Extension of The Decent Homes Standard:
The Decent Homes Standard will be extended to the private rented sector, with the expectation that all households in all corners of the country will have a decent, safe, and secure home.

Levelling Up and Housing Secretary Rt Hon Michael Gove MP said: “Too many renters are living in damp, unsafe and cold homes, powerless to put it right, and under the threat of sudden eviction. The New Deal for renters announced today will help to end this injustice, improving conditions and rights for millions of renters.”

The reforms will also be of significant benefit to communities in Northern England, with data from the English Housing Survey showing that the proportion of non-decent homes is higher in the North than in other areas of the country.

Details on further support for tenants in social housing will be unveiled later this year which will include a review of the Decent Homes Standard, new consumer regulation and regular inspections of the largest landlords. 

3. The Introduction of an Ombudsman:
A new Ombudsman for the private rental sector will be appointed so that disputes between private landlords and tenants can be resolved without having to go to court. Covering all private rented sector landlords who rent out property in England, this will give tenants full access to redress.
If realized, this should greatly benefit both landlords and tenants, and potentially managing agents, by allowing issues to be resolved much more quickly.

4. A New Property Portal:
Introducing a compulsory landlord register in England (as is already the case in Scotland) has been on the cards for a while, but this new property portal takes that concept much further. All landlords will be required to register each property with the portal, essentially creating a landlord register, but the further aim is to "help landlords understand their obligations". This portal essentially puts all relevant rules and regulations in one place so that they are easily accessible for landlords and tenants alike.

A key part of “levelling up” across the country, the aim is to help landlords understand their responsibilities and give tenants everywhere a set of benchmark standards that their rental home must adhere to. This seeks to provide a greater transparency for tenants, so that they have access to how their homes are managed and who is responsible for compliance with health and safety requirements so that tenants can hold unsafe landlords accountable.

What Happens Now?
This kind of rental reform was previously proposed in the Queen’s 2019 speech and was not acted on by government. However, with “Levelling Up” very much on the government’s agenda right now, it looks very likely that change to the sector might finally come. Gove has now vowed to introduce a Renters Reform Act before March 2023, and A Levelling Up White Paper is promised which will set out more detail on the proposals for how the Renters Reform Bill will seek to change legislation and improve standards across the UK.

The reforms are certainly good news for tenants, but what about landlords?

With increased regulation and taxation for landlords in recent years, many landlords have spoken out against the government’s significant focus on assisting renters, sometimes to the detriment of landlords. Accordingly, rental supply is currently at its lowest levels in almost a decade. Will the Renters’ Reform Bill improve this situation?
Marcus Selmon, chair of Portfolio Landlords Action Network, thinks not. He says: “We have a very unusual market made up of millions of small landlords owning less than three properties who often do not have the capital resources to deal with onerous regulations…if they are faced with new regulations that they cannot afford to meet then they will leave the market.”

Regardless, with reform clearly on the agenda, letting agents, landlords and tenants alike will be hoping for greater clarity on how and when these changes will take effect.