A swathe of new regulations is coming for landlords in the private rented sector and ensuring you fully understand and are prepared for the changes will be important. The changes are mostly incorporated in the Renters’ Rights Bill, which in mid-May was in its final stages of debate in the House of Lords as part of the committee stage of the bill, which began on 22 April. More than 100 amendments have been proposed to the bill, although it’s not yet clear which will be accepted and which won’t.
Changes to tenancy structures
In its current form, one of the biggest changes within the bill is the end of fixed-term tenancies. Instead, the market will move to periodic tenancies which means tenants won’t be tied into agreements as they were previously and can leave by personal choice, if their circumstances change or if they aren’t happy with the property. They will need to give two months’ notice to do so. This will give less certainty for landlords over when tenants will leave which means that tenant relationships and being quick to find new tenants will become an even more important part of rental management.
End of no-fault evictions
The changes will also see the end of section 21 no-fault evictions. Possession grounds are to be revised to give tenants more security and more time to find a new property if they do have to leave, while also ensuring a landlord can recover a property when it’s reasonable to do so.
Rent protections
Rent protections will also be amended. Advertised rents must be what is paid when a tenant moves in with rental bidding to boost rents forbidden under the new legislation. Landlords will also be limited on when they can increase rents with rent review clauses abolished. Instead rent increases can only take place once a year through a section 13 notice, with at least two months warning. They can increase to market price only, with tenants able to challenge rent rises via an independent tribunal if required.
Registering on the Private Rented Sector Database
A new database will help landlords to understand their legal obligations and demonstrate compliance as well as providing more information to tenants ahead of agreeing a tenancy. You will need to ensure you are registered on the database in order to use certain possession grounds.
End of discrimination for tenants with pets, children or on benefits
The bill will also end the discrimination against tenants with children or on benefits, as well as giving greater rights to tenants to request to have a pet in the property. You can’t unreasonably refuse the pet request but will be allowed to require pet insurance.
The introduction of Awaab’s Law
Awaab’s Law will also be introduced to the private rented sector, making a swift response to hazards such as damp and mould even more important for landlords.
The importance of compliance
Compliance will be important in order to protect tenant relationships and landlord reputations but also to avoid financial penalties. Councils will be able to impose civil penalties of more than £7,000 on landlords who don’t comply with the changes, with penalties rising to tens of thousands for repeated non-compliance. The burden of compliance has been hotly debated by the lords with amendments suggested to increase the burden of proof on councils.
How to prepare
The changes are intended to improve standards in the sector and provide more security for tenants. It may be something you want to manage yourself, if not we are always here to help.
Proctors is an independent network of individual estate agent businesses with branches in Beckenham, Bromley, Park Langley, Petts Wood, Shirley and West Wickham. We’ve been buying, selling and letting in these areas since 1946. Get in touch to find out how we can help you with your property requirements.