In line with the new Renters’ Rights Bill 2024, aimed to enhance tenant protection, improve housing standards and create a more equitable rental market, London landlords must make changes over the next 6-12 months.
For landlords, these new policies bring with them a ton of new regulations and responsibilities, helping to improve rights for tenants. While these changes are designed to make the rental market more fair, they will also need landlords to adapt and make sure they are staying compliant.
If you are a landlord that needs professional advice around the Renters’ Rights Bill, get in touch with the team at J Property Management today.
What is the Renters’ Rights Bill?
The Renters’ Rights Bill is a new legislation introduced by the UK government to improve the private rental sector.
Whilst there is a current Renters’ Reform Bill that protects tenant rights, this latest version comes with stricter standards for landlords.
Key features of the 2024 Renters’ Rights Bill include:
- Getting rid of no-fault evictions (Section 21).
- Introducing periodic tenancies for all renters – meaning agreements will have a rolling structure, rather than an end date.
- Making rent increases less regular and banning bidding wars.
- Including a Decent Homes Standard, where landlords have to uphold their property to a certain level.
- Creating a Private Rented Sector Database.
- Creating an ombudsman scheme to help settle landlord-tenant disputes.
Whilst there is no set date yet – the Bill is expected to become law by summer 2025, meaning landlords need to start preparing now.
Getting Rid of Section 21: What It Means For Evictions
One of the biggest changes is the removal of Section 21, known as “no-fault evictions.” Previously, this could happen at the end of a tenancy date, where a landlord could evict a tenant without reason.
This change means landlords will no longer be able to evict tenants without providing a valid, legally defined reason.
What Are The Grounds For Eviction Under the New System?
The bill does outline the specific reasons landlords can use to reclaim their property and evict tenants, these include:
- Rent arrears.
- Property damage or breaching their tenancy agreement.
- The landlord selling the property or moving back in.
Tenants will also have more protection for the first 12 months of tenancy, where landlords won’t be able to use some of the above mentioned reasons for eviction during this period. After this, the minimum eviction period will be 4 months.
What Does This Mean For Landlords?
Landlords will need to be very organised when it comes to their tenancies. If they want to prove that rent hasn’t been paid or the tenancy agreement has been broken, they will need tangible proof.
It could also mean that any evictions take longer than expected – this is important to prepare for, especially if landlords plan to sell their homes.
Ending Fixed-Term Agreements
The Renters’ Rights Bill will also make periodic tenancies the standard tenancy structure. Currently, fixed-term agreements are more common, as they come with a start and end date for the tenancy.
Periodic tenancies on the other hand don’t come with an end date, and just operate on a rolling basis. Again, this makes it harder for landlords to evict as there is no fixed end to the agreement.
Why Introduce Periodic Tenancies?
The government is trying to help tenants feel more secure in their homes by removing the need to renew tenancies every year. Tenants will be able to leave by giving 2 months’ notice, but landlords will have to adhere to the 4 month period mentioned above.
Whilst this is definitely a bonus for renters, it does leave landlords in a difficult position for planning – especially as they could find themselves without tenants at any time, with just 2 months to find new tenants.
What Does This Mean For Landlords?
The loss of fixed-term agreements may make it harder to plan long-term. If tenants can leave with just 2 months’ notice, this might also mean marketing costs are high as they try and fill vacancies.
New tenancy agreements will also need to be created with these rules in mind.
Limits on Rent Increases and Bidding Wars
One of the major changes that will come into effect with the new bill is stricter legislation about how and when landlords can increase rents.
Under the new rules:
- Rent increases will be limited to once per year.
- Landlords must give tenants two months’ notice of any increase.
- Rent increases must align with market rates and can be challenged by tenants if they think it is excessive.
This process can make it more difficult to increase rents – which could impact long term rental yield.
Alongside this, rental bidding wars – where tenants compete for a lease by offering higher rents – will be banned. These bidding wars have been very common in areas like London, as demand is bigger than the supply.
Under the new rules, landlords will have to advertise an asking rent and will not be able to accept any offers higher than this.
What Does This Mean For Landlords?
Whilst these new laws aim to make rent more stable and stop tenants being priced out of areas, it does make it difficult for landlords to increase rents.
It will be more important than ever to conduct a property rental valuation so that landlords can make sure their properties stay both in-demand and profitable.
Awaab’s Law and the Decent Homes Standard
The Renters’ Rights Bill will also have stricter laws around property safety in the private rental sector. Currently, whilst landlords are responsible for the maintenance of their properties, the laws around timelines are vague.
The new bill includes:
- Awaab’s Law: Landlords must address and get rid of hazards like damp or mould within specific timeframes.
- The Decent Homes Standard: Private rentals have to meet minimum standards for safety and cleanliness. This includes no safety or health hazards, good heating, insulation and ventilation and fully functioning kitchens and bathrooms.
Penalties for Landlords
If landlords don’t abide by these laws, they could be charged up to £7,000 or have to go to court. If they continue to breach these laws, they can be fined up to £40,000 or be criminally charged.
Registration On The Private Rented Sector Database
The government will also have an official Private Rented Sector Database, which landlords will have to be registered on. The database will have details of their property as well as information on the landlord.
This will help them keep track of private landlords and make sure they are staying compliant. It will also be a useful resource for tenants who want details around their new landlords.
The Private Ombudsman Scheme
A new ombudsman service will mean tenants have easier ways to resolve any disputes with their landlords. Landlords will have to be part of the scheme, regardless of whether they use a letting agent or not.
How the Ombudsman Works
Tenants can file complaints about issues like:
- Landlords who are not addressing maintenance problems.
- Unreasonable rent increases.
- Eviction attempts that don’t comply with the new ruled.
The ombudsman will then review the case and either:
- Ask the landlord to make repairs or improvements to the property.
- Ask the landlord to pay compensation to the tenants of up to £25,000.
In order for landlords to protect themselves, they should address any tenant concerns and keep track of communications to prove that action has been taken.
Tenant Rights To Keep Pets
Under the new law, tenants will also have the right to keep pets, and landlords cannot unreasonably refuse. Currently, landlords can openly ban pets without reason, so this is a good draw for anyone renting with an animal companion.
Like with other rules, if a landlord does deny a pet request, the tenant has the option to dispute this.
Whilst they can’t ban pets without reason, landlords can ask tenants to take out pet insurance to cover damages. This protects them if the pet damages the property and the tenant can not pay for repairs.
Ending Discrimination
The bill will also ban landlords from discriminating against families or those on benefits. Whilst landlords can check that tenants are able to afford the rent, they can not openly discriminate.
In simple terms, this means landlords will not be able to advertise that they won’t have a certain type of tenant in their property, and must have a solid reason for refusing a tenant on benefits.
How Should Landlords Prepare For The New Regulations?
With the Renters’ Rights Bill expected to become law in 2025, landlords should start preparing now. Speaking to a professional is always a good idea, but to get ahead of it, we suggest:
- Re-Look At Tenancy Agreements: Update contracts so they don’t include fixed-term leases.
- Inspect Properties: Make sure your property is compliant with the Decent Homes Standard and look to get ahead of any potential hazards.
- Set Clear Policies: Develop processes for your annual rent increases, how you plan to handle pet requests and how you communicate disputes with tenants.
- Stay Informed: Keep up to date with when the bill is set to come into play, and speak to a professional if needed.
The 2024 Renters’ Rights Bill: What You need To Know
The Renters’ Rights Bill is going to be one of the biggest changes to UK tenancy laws in decades.
Whilst the laws are designed to be fairer for tenants, they do mean landlords will be more highly scrutinised and held accountable for their decisions.
By understanding the new rules and preparing, landlords can set themselves up to succeed in this new rental market.
If you want to speak to a professional to find out more, get in touch with team at J Property Management today.
