What the Renters’ Rights Bill means for your clients

Nicola Goldie, Head of Strategic Partnerships and Growth at Aldermore, explains what brokers and landlords need to know about the new Renters’ Rights Bill.

Rental reform has been long overdue and landlords were expecting change from the previous government in the form of the Renters (Reform) Bill.

That piece of legislation fell at the final hurdle due to the general election, but the need to put in place better protection for tenants hasn’t gone away.

Labour pledged to reform the rental market in its manifesto and included a new Renters’ Rights Bill in The King's Speech within weeks of coming to power.

If it passes through Parliament, this could impact the lives of renters, and those landlords who own them.

Your buy to let clients will be keen to understand what the new proposals could mean for them and you are well placed to make sure they understand the implications of any new legislation.

What is the Renters’ Rights Bill?

The Renters’ Rights Bill aims to reform the rental sector in the UK to give greater rights and protections to people renting their homes.

Its draft proposals, published in briefing notes by 10 Downing Street, include:

• Abolishing Section 21 ‘no-fault evictions’ and introducing new clear and expanded possession grounds for landlords. Landlords will be prevented from asking tenants to leave unless they have broken a specific rule, boosting security for tenants while allowing them to reclaim their properties when they need to.
• Strengthening tenants’ rights and protections, empowering tenants to challenge rent increases designed to force them out by the backdoor and ending the practice of rental bidding wars by landlords.
• Giving tenants the right to request a pet, which landlords must consider and can’t unreasonably refuse.
• Applying a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard-free.
• Applying ‘Awaab’s Law’ to the sector, with clear legal expectations about how quickly landlords must make homes safe where they contain serious hazards.
• Creating a digital private rented sector database to bring together key information for landlords, tenants and councils.
• Quicker, cheaper resolution of disputes with a new ombudsman service for the private rented sector to provide fair, impartial and binding resolution to both landlords and tenants.
• Making it illegal for landlords to discriminate against tenants in receipt of benefits or with children.
• Strengthening local councils’ enforcement powers to identify and fine unscrupulous landlords.

What does it mean for your landlord clients?

The Renters’ Rights Bill is similar but arguably tougher on landlords than the previous Renters (Reform) Bill.

The biggest concern for landlords will be the scrapping of Section 21 evictions. Although this also formed part of the previous government’s plans, it had made it clear it would only get rid of Section 21 when ‘sufficient progress had been made on reforming the courts’.

Scrapping Section 21 without improving the court system for Section 8 evictions could have the unintended consequence of overwhelming the already-creaking legal system.

Trade association Propertymark has called for a separate housing court to be set up to process claims efficiently and effectively, and warned that, unless the courts are reformed, they could be swamped with Section 8 proceedings.

Other measures such as stopping bidding wars and allowing renters to dispute rent increases go further on controlling rental prices than the previous Bill, while stopping short of rental caps. But the government hasn’t yet outlined the full details of this proposal.

Better for all

The Renters’ Rights Bill aims to deliver Labour’s manifesto commitment to transform the experience of renting and level the playing field between landlords and tenants.

Aldermore supports proposals that improve the quality of the private rented sector. It’s an essential part of the housing market and the majority of landlords work hard to provide decent quality, safe and secure accommodation to their tenants.

A thriving PRS is better for brokers and lenders as well as tenants, and we welcome improvements that are fair to landlords too. Aldermore will be engaging with the government during the process of this legislation, ensuring that the voice of our customers is represented.

Your buy to let clients have faced a decade of sweeping regulatory and tax changes and have overcome each new hurdle.

Let’s work together to help them manage this new set of rules.

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