The new UK government has recently introduced the Renters Rights Bill, with the aim of reforming the rental market. Set to be implemented by summer 2025, the bill closely mirrors the previous Renters Reform Bill, but with some key updates.
Here’s what landlords should expect and how it might affect their rental strategies.
Section 21 Notices and New Grounds for Possession
One of the significant changes is the abolishment of Section 21 notices, often referred to as "no-fault evictions." Under the new bill, landlords will no longer be able to evict tenants without providing a reason.
However, landlords can still regain possession through Section 8, especially in cases where they need to sell the property or move back in. A major change here is that landlords will now need to provide four months' notice, compared to the current two months.
While the removal of Section 21 is generally welcomed, it does place more responsibility on landlords to ensure compliance with regulations, and it extends the timeline for regaining possession, which could be a challenge for some.
Monthly Payment Periods and Tenancy Structures
Another notable shift is the restriction on payment periods. Under the new bill, landlords can only ask for one month’s rent in advance, and all tenancies will be on a month-to-month basis.
Fixed-term tenancies will no longer be allowed, meaning tenants can give two months' notice at any time, making tenancies potentially shorter.
For tenants with irregular employment or students without UK guarantors, this poses challenges, as landlords often request several months' rent upfront for security. The absence of this option may require the further development of alternative solutions like insurance products to mitigate the risk; there are currently some insurance products but they are likely to become more mainstream.
Rent Increases and Market Adjustments
The Renters Rights Bill maintains the provision for rent increases but limits them to once per year. Landlords must give two months' notice using a Section 13 notice, which will include the proposed rent increase.
While landlords can negotiate lower amounts, the tenants have the right to challenge the rent through the first-tier tribunal at no cost, which could delay the increase.
This regulation brings up the same concerns raised in the previous Renters Reform Bill, particularly regarding the ease with which tenants can delay increases by contesting them, even when justified by market conditions. Although, we’re hoping there may be some changes made to this proposal as it works its way through parliament.
Pets, Discrimination, and Maintenance Standards
Further proposals in the bill relate to ensuring fair treatment for tenants regarding pets and discrimination.
The introduction of Awaab’s Law also enforces strict timelines for addressing property maintenance, particularly with issues like dampness.
The goal is to make sure that rental properties are well-maintained and provide healthy living conditions, but this may introduce more oversight and costs for landlords who need to comply with stricter standards.
What Does This Mean for Landlords?
While much of the new bill aligns with previous reforms, the extended notice periods and restrictions on upfront payments present challenges for landlords, especially those renting to students or tenants without secure employment. The proposed rules may lead to shorter tenancy lengths and added complexity in referencing tenants.
However, with fewer landlords in the market due to increasing regulations and the likelihood of some selling their properties, rental demand should remain strong, potentially driving rents up. As a result, landlords who navigate the new system effectively should still see a profitable return on their investments.
How Rocket Can Help
At Rocket Property Management, we’re closely monitoring the details of the Renters Rights Bill as they unfold. We’ll continue to advise our clients on how best to manage their properties and stay compliant with new regulations.
Our goal is to ensure that landlords have in place good tenants paying market rents, which will keep your properties profitable, even as the new legislation is introduced.
If you’re unsure how the Renters Rights Bill might affect you or want advice on staying compliant and maximising your rental income, Rocket Property Management is here to help, so feel free to book a meeting with our founder, Ben Temple, by clicking this link.
