Michael Gove’s Renters Reform Bill is being introduced by the government in one of the biggest shake-ups for the Private Rented Sector (PRS) in more than 30 years. It had its first reading back in May and is now slowly making its way through Parliament before hitting the statute books sometime in 2024/2025. Its purpose is to improve tenants’ rights and give them security of tenure in their homes as well as helping local authorities tackle rogue landlords. So, what exactly is in the reform bill?

  1. Section 8 and 21 Notices:The most contentious issue is the scrapping of Section 21 ‘no-fault’ Eviction Notices. Landlords will need to provide a specific reason for evicting tenants, using a Section 8 Notice. Valid criteria include – anti-social behaviour, rent arrears, consistent late payments and any kind of criminal activity. Repossession orders can also be made if landlords are – undertaking a substantial remodelling that makes the property uninhabitable, if they are selling, or are returning the property to a holiday let. The problem is, repossession orders will have to go through the courts, which could take up to 12 months if there are any challenges. We will go into more detail next month.

 

  1. Rolling tenancies and students: Tenancies will automatically be assumed to roll on (periodic tenancies) unlike the current Assured Shorthold Tenancies (AST), which typically only last 12 months.

On the other hand, should tenants wish to leave, they will be required to give two months’ written notice. The peculiarities of student accommodation, however, mean they require fixed-term contracts. Currently, there is an exemption for purpose-built student accommodation, but Michael Gove is now considering extending it to all student lets.

  1. Rent increases: The notice period will double to 2 months and be restricted to just once a year and any increases must be in line with the wider lettings market. Tenants will be able to challenge any excessive rises via a tribunal.

 

  1. Pets: Landlords will not be able to refuse pets unless there is a valid reason – if they are prohibited by the building’s lease, for example. In mitigation, landlords will be able to demand proof tenants have ‘pet insurance’ to cover any damage. Alternatively, landlords could arrange their own insurance and charge it to the incoming tenant.

 

  1. Mandatory landlord rating portal: Tenants will be able to rate their landlords as they do for Airbnb or Checkatrade. They will also be able to see their landlord’s letting history and can give them a score.

 

  1. Property Ombudsman: A new Private Rented Sector Ombudsman will be introduced to resolve landlord and tenant disputes, with the power to order compensation payments of up to £25,000. It will be a legal requirement for landlords to join the scheme, whose aim is to ensure disputes are resolved quickly, impartially and at a low cost, without having to resort to the courts. There are, though, some serious concerns – a recent survey by mortgage lender, Landbay, found almost half of landlords (48%) believe the ombudsman will ‘always side with the tenant and that it was just a money-making scheme’. Many also noted that government departments are rarely quick or efficient.

 

  1. Repeated serious rent arrears: These will be mandatory grounds for eviction, which should close the current loophole where tenants can avoid eviction by paying their arrears just before a possession hearing.
  1. Families and those on benefits: Tenants cannot be rejected solely on the basis that they receive benefits or have children. There are also plans to extend this part of the legislation to include outlawing any rental listings that specifically ban families or benefit recipients.

 

  1. Minimum Housing Standards: These currently only apply to social housing but were originally going to be extended to the PRS. They have since been dropped from the Renters Reform Bill, although the government has said it is still ‘committed’ to bringing in minimum standards to the PRS and that they will be introduced in ‘due course’. When they do come in, landlords will have to ensure their rental properties are in a reasonable state of repair and free from serious health and safety hazards. They must also have clean and reasonably modern facilities and services (kitchens under 20 years old and bathrooms under 30). For full details, see: Government’s minimum housing standards