What can we expect from the Renters’ Reform Bill?

What can we expect from the Renters’ Reform Bill?

First let’s deal with the unexpected. The Queen’s Speech was delivered earlier this month but dear old Lilibet was nowhere to be seen. Prince Charles announced the government’s legislative programme instead, as Her Majesty recovered from ‘episodic mobility issues’. Thank heavens she’d recovered in time for the Royal Windsor Horse Show a few nights later. Well, it’s surely better than the political horse-trading at Westminster.

The expected news from the speech, of course, was the announcement that the Renters’ Reform Bill is still very much in the pipeline. We can expect a White Paper in the coming weeks (July is our best guess) followed by confirmation of what the long-awaited reforms will actually look like. Industry commentators expect to see:

A. The abolition of those notorious ‘section 21’ (no-fault) evictions 

B. The establishment of a landlords’ register

C. The adoption of a Decent Homes Standard

D. The creation of a new Private Renters’ Ombudsman

These reforms, if they eventually become law, will bring much-needed changes to the private rented sector. They should offer tenants more protection from dodgy landlords, landlords more protection from dodgy tenants, and create a quick and low-cost way to dodge drawn-out disputes. What’s not to like? 

The story so far

The Renters’ Reform Bill was first announced by Theresa May’s government back in April 2019. It was designed to help the nation’s 4.4 million tenants in the private rented sector feel more secure by ending unfair evictions. After three years of protracted procrastination - Covid certainly didn’t help there - the legislation is back on the agenda as part of the government’s ‘Levelling Up’ aspirations. 

Although the Renters’ Reform Bill was always about more than Section 21, this is the issue that the media have focused on. After all, it’s a catchy narrative: ‘government to crack down on greedy landlords exploiting helpless tenants’ is a perfect underdog story. However, the reality isn’t as simple as this. In fact, some reports have been slightly misrepresenting how the reforms will actually change that all-important tenant / landlord relationship. 

The tenant’s perspective

Although we don’t know for absolute certain what the Renters’ Reform Bill will entail, we can be 99.9% sure that Section 21 is on the way out. Therefore, landlords will need a bona fide reason to evict tenants in the future; i.e. they won’t be able to give two months’ notice without an official explanation. The Decent Homes Standard should also ensure that all rented accommodation is fit for humans, rather than just cockroaches and rodents. 

Although landlords currently have to give four months’ notice when issuing a section 21 eviction - the notice period was doubled during the pandemic - the Renters’ Reform Bill is still a necessity. After all, unscrupulous landlords could, if they were so inclined, evict a tenant simply because they’ve had a disagreement or don’t like the cut of their jib.

According to Shelter, as many as 230,000 private renters have received a no-fault eviction in the last three years. This has led campaigners like Generation Rent to argue that tenants “can’t rest” until legislation outlawing these “insidious evictions” is passed into law. Strong words indeed. Consequently, tenants should definitely see the Renters’ Reform Bill as a positive thing. 

The landlord’s perspective

Landlords have had a hard time of late. Many of them will be hiding behind the sofa when the government finally reveals the full contents of its Bill. After all, landlords’ critics are already declaring the upcoming reforms as a victory. However, we’re not convinced that the new legislation will be such awful news for the UK’s 2.5 million landlords. In fact, it might bring them some much-needed certainty, too.

For starters, the so-called ‘landlords register’ might not actually list landlords. It could simply register and track rental properties. Meanwhile, although abolishing Section 21 will deliver a fairer deal for tenants, the new laws could conceivably introduce stronger grounds to evict genuinely troublesome tenants - the kind that either don’t pay their rent or blast out Iron Maiden’s Bring Your Daughter To The Slaughter at 3am every night.

We shouldn’t forget that it can currently take up to 4 or 5 months for landlords to cut ties with bad tenants. Reform is therefore in landlords’ interests, too. What’s more, the introduction of a property ombudsman might actually strengthen a landlord’s hand in dealing with disputes - as long as their grievance is real. 

Despite the concerns, there’s nothing to suggest (at this stage) that the new legislation will make it harder for landlords to repossess their property if they want to live in it or sell up, either. The government might also compensate for the axing of section 21 by beefing up section 8, which strengthens grounds for repossession. Indeed, landlords probably won’t notice any difference in their daily lives if their property is being fully managed by an agent. 

So will the Renters’ Reform Bill actually change much?

It should be a step in the right direction but it’s still too early to say for sure. The White Paper will set out the government’s proposal and might even include a draft version of the Bill. But there will be further consultation after that (and some final amends) before the Bill is formally presented to parliament. What we can say for sure, however, is that it would be premature for landlords to panic. 

Equally, it would also be premature for tenants (as well as other observers) to think that the Renters’ Reform Bill will be a panacea for the rental sector. The elephant in the room, of course, is that the legislation will do nothing to address historically high rents, which are obviously a massive concern during a cost of living crisis. The housing crisis is a mammoth issue and it will take more than the Renters Reform Bill to stamp out all the sector’s problems, but we think this is definitely a good first step.

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