With Labour’s recent victory in the July election, the Renters Reform Bill has been rebranded and updated as the Renters Rights Bill. This legislation aims to transform the private rented sector in England by introducing several significant changes. Here’s what you need to know about the new Bill:
Key Provisions:
- Abolition of Section 21 Evictions: One of the most notable changes is the abolition of Section 21, which currently allows landlords to evict tenants without a specific reason. This change is intended to provide greater security for renters, ensuring that they cannot be evicted without just cause. Although, it’s fair to say that while landlords generally rely on a “no fault” eviction, it doesn’t mean that there was no fault by the tenant. It simply happens to be the least expensive, and quickest way to evict bad tenants.
- Grounds for Possession: The bill introduces reformed grounds for possession, making it necessary for landlords to justify evictions through the court system. This includes specific provisions for landlords who need to reclaim their property for personal use or to sell, with restrictions on reletting within 12 months to prevent misuse of these grounds.
- Rent Increases: Tenants will have more power to challenge unfair rent increases. While there is already a mechanism for this under existing laws, the new bill aims to enhance tenant protections against rent hikes designed to force them out indirectly
- Private Rental Sector Ombudsman: A new ombudsman service will be established to provide fair and impartial resolution of disputes between landlords and tenants, reducing the need for costly court proceedings.
- Decent Homes Standard: The bill applies the Decent Homes Standard to the private rented sector, aiming to ensure homes are safe, secure, and free from serious hazards. This aligns with previous proposals but is now to be formalised under the new legislation.
- Tenant Rights to Pets: Tenants will have the right to request to keep pets, which landlords must consider and cannot unreasonably refuse. Landlords may require pet insurance to cover potential damages.
- Digital Rental Database: A digital database will be created to consolidate key information for landlords, tenants, and councils. This aims to improve transparency and compliance within the private rented sector.
- Rental Bidding Wars: The bill aims to end the practice of rental bidding wars, where landlords and agents invite bids higher than the advertised rent. This measure is designed to make the rental market fairer and more transparent.
When Will Section 21 be Abolished?
It appears as through the “Renters’ Reform Bill” is formally dead in the water and that the labour government plans to start over with a brand-new bill (the Renters’ Rights Bill)
Detailed provisions and the full legislative text are not expected until October this year. So, we’ll need to wait until then before we get a concrete idea as to when section 21 will be abolished.
However, if Labour start again from scratch we only need to look at the new bill’s predecessor, the Renter’s Reform Bill, to get a rough idea of timelines.
The Renters’ Reform Bill was announced in the Queen’s Speech 2022. 2 years later, in 2024, it still hadn’t reached royal assent, but had made it about two thirds of the way through the way through the parliamentary process .
Labour have indicated that they are very keen to get the bill over the line, pledging to abolish Section 21 on ‘day one’ – something which is completely impossible.
We might read into this statement as an indication of Labour’s eagerness to move the bill through parliament faster this time around. However, it wouldn’t be the first time politicians exaggerated to get votes, and it’s all together possible that the new bill could take years, if it’s anything like its predecessor.
Even if the new government work at lightspeed, the legislative process will likely take between 6 – 12 months after the date on which the bill is first introduced to parliament in what’s called the First Reading stage.
The former bill made its debut in parliament (First Reading stage) in May 2023, one whole years after the Queen’s Speech, May 2022. So, it’s anyone’s guess how long the new bill will take – but it could take as long as a year to reach parliament.
What issues will the bill face?
The biggest issue this new bill will face is the same as what the old bill struggled with – the question of how landlords will evict bad tenants through the courts, without Section 21.
Section 21 currently allows landlords to evict tenants, under certain circumstances, in a way that doesn’t require a court to hear both sides of the story. It’s open and shut. If the conditions are met the eviction is granted without any need for the landlord and tenant to battle it out in court. For most evictions in the UK, landlords rely on Section 21 for ease and reliability.
However, the abolition of section 21 will mean that a very large number of evictions will need to go through a lengthily court battle. The issue is that courts don’t currently have the capacity for this sort of thing. The outcome of the abolition would be that it becomes next to impossible to evict tenants since evictions would need to have lengthily hearings, so the courts would get swamped and develop huge backlogs of cases, effectively allowing bad tenants to abuse the system and continue living in accommodation for as long as it takes to get a court hearing (possibly years).
The previous bill was put on hold indefinitely until such future time that the UK courts had been deemed capable to deal with the new eviction processes, because this kind of bottleneck in the courts isn’t an easy thing to solve without first overhauling the entire court system. The new bill will face this same challenge. It will be interesting to see how Labour deal with it.
What’s next?
We don’t know for sure. There isn’t a clear solution for the issue of the courts having limited capacity, and there’s no date set for when the First Reading in the House of Commons will begin. We’ll know more in October, and we’ll keep this post up to date so be sure to bookmark this page.