In the latest sitting in the House of Lords for the much-debated Renters’ Rights Bill, some tabled amendments were accepted that could be welcome news to landlords.
At this point, while the bones of the Renters’ Rights Bill are clear and largely expected to become law, there are still potential tweaks that could make a big difference when the legislation is finally implemented.
Many of these relate to fairness for landlords as well as tenants, with getting the balance right to create a higher quality private rented sector being a major concern for those in the industry.
Earlier this week, the government accepted an amendment in the House of Lords that scraps the option of landlords requiring tenants to take out special insurance for their pets. Instead, it backs the plan for tenants to pay an additional deposit, which can be used to pay for potential damage caused by pets during a tenancy.
Other amendments to the Renters’ Rights Bill that were accepted during the House of Lords Report Stage were linked to student tenancy protections; a review on tribunal capacity for rent increase challenges; and changes to the re-letting rules when tenants are evicted in order for the property to be sold, but the sale fails.
U-turn on pets
The government’s U-turn on pets means that the Renters’ Rights Bill will now allow landlords to request an additional three weeks’ rent as a ‘deposit’ towards any pet damage.
According to Propertymark, which campaigned for this outcome, it is a more “practical solution” than requiring specific insurance, which still supports tenants’ rights to keep pets.
Since 2019, tenant deposits have been capped at a maximum of five weeks’ rent. This new move would provide landlords with more peace of mind, which could boost the number of rental homes that will allow tenants with pets.
Under the Renters’ Rights Bill, landlords will not be able to ‘unreasonably’ refuse a request for a tenant to keep a pet, and there will be a procedure for both tenants and landlords to follow in order to come to an agreement.
Student tenancies under Renters’ Rights Bill
According to Propertymark, an amendment was supported to expand Ground 4A, giving landlords of one- and two-bedroom student properties the right to regain possession to prepare for new student cohorts.
Propertymark had warned that removing fixed terms without this safeguard risked undermining student housing supply. There is a risk that landlords will face summer void periods because students can leave the property before the year is up, which could put some of the sector.
Under the Renters’ Rights Bill, it is proposed that fixed-term tenancies (under Assured Shorthold Tenancy Agreements) will be eliminated, and instead be replaced with periodic tenancies. These will be rolling tenancies where each party can give notice at any point, although the notice period may vary depending on the situation.
Tribunal capacity for rent disputes
Under the Renter’s Rights Bills, there will be stricter measures in place when it comes to rent rises, with landlords only able to increase rents once a year using a Section 13 notice. These rent rises must align with market rates.
Tenants can challenge proposed rent increases through the first-tier tribunal. However, with an expectation that there may be more rent challenges once the Renters’ Rights Bill is in place, the government will now be required to review tribunal capacity, with the system currently at risk of being overrun.
This was another amendment backed by Propertymark.
Re-letting an unsold property
The Renters’ Rights Bill proposes that landlords will not be allowed to re-let a property for 12 months after evicting a tenant in order to sell the property, or to move back in. This is to avoid situations where landlords dishonestly evict tenants in order to put the rent up with a new tenant.
However, this week’s sitting in the House of Lords resulted in this time limit being amended to six months. Landlords must provide evidence to prove fair marketing, and demonstrate that no suitable offers were refused.
As Propertymark notes: “This reduction will help landlords avoid long void periods, prevent unnecessary financial penalties, and keep more properties available to rent.”
