The Renters’ Rights Bill appears focused on tenant protections but also presents opportunities for landlords. Eleanor Welch, Glenny's Head of Residential Property Management, explains.
The new government’s King’s Speech on 17th July 2024 introduced a new Renters’ Rights Bill aimed to strengthen tenants’ legal protections. The bill outlines various measures including a ban on Section 21 no-fault evictions and abolishing fixed term tenancies to move to a structure where all assured shorthold tenancies are periodic. There are, however, new grounds for landlords to regain possession of their properties for their family to live there, or if they wish to sell the property.
Other measures include giving tenants the right to challenge rent increases, keep a pet, and ultimately help tenants make informed choices whilst ensuring landlords understand their responsibilities and legal obligations.
The Renters’ Rights Bill, like the previous Renter’s Reform Bill, will eliminate fixed term assured shorthold tenancies, making all tenancies periodic from the commencement date. This means tenants will have the right to stay in their home until they choose to end the tenancy by giving two months’ notice. The bill also broadens the grounds for possession, requiring landlords to provide evidence in court that the grounds are met. For mandatory grounds, the court must grant possession if the case is proven, whilst for discretionary grounds, the court can decide whether eviction is reasonable, even if the ground is established.
If a tenant breaches their tenancy agreement, landlords can issue notice on relevant grounds at any point during the tenancy. This includes cases of antisocial behaviour, property damage, or significant rent arears. The mandatory rent arrears threshold for eviction will be raised from two to three months, and the notice period will be extended from two to four months.
The Renters’ Rights Bill, whilst primarily focused on enhancing tenant protections, does also present several opportunities for landlords. With the introduction of the revised grounds for possession, a more structed and transparent legal framework is presented. This clarity will help landlords to navigate tenancy issues more confidently and streamline the eviction process where necessary. Whilst tenants will gain more security through these grounds, the bill expands and strengthens grounds for landlords to regain possession, especially in cases of tenant fault and these grounds will be supported by clearer legal evidence requirements which will reduce ambiguity and potential delays in eviction cases.
The introduction of periodic tenancies gives tenants the flexibility to stay long-term without the need for fixed term renewals. This could reduce tenancy turnover and void periods, providing landlords with more stability in rental income as long-term tenants may be less inclined to move frequently.
Furthermore, the increased threshold for mandatory rent arrears, from two to three months before possession proceedings can commence does provide more protection for tenants, however it also gives landlords a better opportunity to act on problem tenants, balancing patience with decisive action.
Many agents and landlords have expressed concerns about the Renters’ Rights Bill, acknowledging that change can be difficult. However, with adequate preparation, landlords can adapt to these updates with minimal disruption. As the bill is anticipated to become law by summer 2025, it is essential for landlords to familiarise themselves with their future obligations. By staying informed and making necessary adjustments, landlords can protect their investments whilst complying with the new legislation.
The Renters’ Rights Bill is steadily progressing through Parliament, and whilst it will introduce significant changes to the Private Rented Sector, it is essential to recognise the opportunities it offers. These changes provide landlords with a more balanced approach to managing tenancies whilst ensuring tenants’ rights are respected. By embracing the new legislation, landlords can protect their interest, reduce tenant turnover, and enhance the long-term health and profitability of their rental properties. Proper preparation will be key to navigating this evolving landscape successfully.
For more information on this subject, and to discuss how to maximise the value in your PRS portfolio, contact Eleanor Welch.
