Renters’ Rights Bill: a new era for residential tenancies

The new Renters’ Rights Bill (‘the Bill‘) was introduced to the House of Commons for its first reading on 11 September 2024. The Bill is intended to follow through on the Government’s legislative agenda and manifesto commitments for leasehold and commonhold reform.

The passage of the previous, controversial Renters (Reform) Bill, which was introduced by the former Conservative Government, ended in May 2024, and the Labour Government’s new Bill has built upon its foundations.

The headlines

Through the Bill, the Government intends to give greater rights and protections to people renting their homes. The key proposals include the:

• abolition of assured shorthold tenancies (ASTs) and changing all assured tenancies into monthly (or less) periodic tenancies;
• abolition of “no-fault” evictions under section 21 of the Housing Act 1988 and amendments to the grounds for possession, providing tenants with greater security;
• inclusion of a statutory procedure for increasing rent once per year to market rate, and for tenants to challenge any increase;
• introduction of a “Decent Homes Standard” for the private rented sector, in order for landlords to be prosecuted or liable to penalties for not addressing serious hazards;
• extending “Awaab’s law” (requiring social landlords to investigate and fix reported health hazards) to the private rented sector;
• prohibition of rental bidding wars and restricting letting agents from discriminating against tenants on benefits or those with children;
• introduction of the right for tenants to request a pet; and
• introduction of a new ombudsman and a new private rental sector database.

In practice

There were concerns that the previous Government’s Renters (Reform) Bill, which also proposed the abolition of “no fault evictions”, would increase pressure on the already strained court system. Landlords would have to issue proceedings in many cases in order to obtain possession or deal with difficult or defaulting tenants. The Third Reading of the Renters (Reform) Bill brought the potential issue with court capacity to the forefront of the debate.

This practical problem of court capacity remains under the new Bill. Should a landlord attempt to regain possession using the grounds available to them under the new legislation, a well-advised tenant would, in most cases, oppose the grounds in the courts, as there is little prejudice to them in doing so. It may be that the introduction of a new ombudsman service, that will provide quick, binding resolutions for tenants’ complaints, will alleviate the position by reducing the number of disputes that are referred to the courts but that remains to be seen.

On occasions that it has suited the Government to do so, such as the recent sentencing of over 200 hundred of those who participated in the national violent disorder in August 2024, the court process has been fast-tracked. Given how important an issue this is politically for the Government, there is again potential for the process to be streamlined. The ability for the courts to cope with increased demand as a result of this Bill will certainly be raised in future readings, and we await with interest details as to how the Government intends to address this problem.

Next steps

The Bill needs be approved by MPs and peers, who may propose further changes, before it becomes law. MPs are due to next consider the Bill at the Second Reading on Wednesday 9 October 2024.

In view however of the fact that this Bill is based on the Conservative’s Renters (Reform) Bill and few of the changes made by the Labour Government are particularly dramatic, it is anticipated that many of the measures will survive the final cut.

As drafted, the legislation will apply to new and existing tenancies immediately on commencement, with the Government indicating that they could introduce the new rules in the first half of next year.

Those affected by this Bill should keep abreast of updates as it progresses through Parliament over the coming months.

Should you wish to discuss any of the issues raised in this article, please contact Grace Awan.