What does it mean that the Section 21 is being removed?
The Section 21 is known as a no-fault eviction.
This means you can serve two months’ notice on tenants to operate a break clause or to end a fixed term tenancy and no reason needs to be given.
The new proposals are for a Section 8 notice to be served, which will have the same notice period, but a reason must always be given for needing vacant possession.
The number of reasons that can be given are being expanded and discussed in parliament.
What is the new tenancy regime?
When the renters’ reform bill comes into effect, it will not allow any more fixed term 12-month tenancies.
As it stands, the proposal is only for assured tenancies to be provided, which means tenants will pay monthly with no fixed term until notice is served by either the landlord or the tenant.
As with the section 8 notice explained above, the landlord must give two months’ notice and a reason.
The tenant will also have to give two months’ notice when the new legislation comes into effect, which is an improvement on the current situation where a tenant can give no notice and just leave on the last day of the tenancy.
There has been a suggestion there may be an exemption for student lettings which could allow fixed term tenancies while a student is studying.
What is the new policy about Pets?
All landlords must accept pets, but can insist on insurance to cover any damage they may cause.
How will the government improve the eviction process or deal with residential property issues?
The proposal is to increase the number of grounds for the service of a notice from 20 to approximately 33. There is also a proposal for Court reforms and new Accelerated Possession Proceedings but very little detail about these reforms at this stage.
Can Landlords increase the rent without fixed term tenancies?
Landlords will be able to propose a rental increase to tenants once a year.
Currently, this can also be done by using a section 13 notice and the proposal is that landlords will be able to use this section 13 notice once a year.
If the tenant objects to the increase they can take the matter to a rent tribunal where a ruling will be made.
What is the new landlords’ Ombudsman?
The idea of the Ombudsman is for all landlords to have to register and it will result in quicker and cheaper resolutions to disputes.
A new digital property portal will enable landlords to understand their obligations and it will help tenants make better decisions. There is also a plan for the property portal to provide a wide range of property specific information ranging from Energy Performance certificates to electrical and gas certificates, as well as the landlord redress scheme details.
When will all this take effect?
In all honesty, we don’t know for sure because there are lots of stages to get the bill through parliament and the House of Lords.
It is expected the legislation will become law in the middle of next year and by October 2024 we should know the dates for implementation.
So, it is likely the renters’ reform bill will take effect at the end of 2024 for new tenancies and then there will be a transition period for existing tenancies.
What do we need to do now or over the coming months?
Make sure you are happy with your agent because the advice and help provided during this major change to the landscape for residential lettings will be crucial.
As a start make sure you have in place good tenants at the best rental you can achieve before the middle of 2024, so you are well placed to move through the changes and the implementation dates.
Make sure you are educating your tenants to keep your costs down and keep an eye out for articles and advice to guide you in the right direction.
And, most importantly, don’t panic.
Property is still a worthwhile investment and we can assure you that it remains possible to have a profitable residential property portfolio.
