The Renters Reform Bill is something that most property investors and landlords are growing increasingly aware of in the UK, but is it something you need to act on now?
The Renters Reform Bill is a proposed law that promises to make a number of changes in the UK’s private rented sector. While it has been a hot topic for a while now, the government has been criticised for the delay in making the Bill into law, as many of the issues within it have been on the cards since 2019.
A third reading in the House of Commons is the next stage for the Bill, which is said to be “imminent” according to housing minister Jacob Young. For many property investors and landlords active in the private rented sector, this means there could be some big changes on the horizon.
However, the contents of the Bill are currently under much scrutiny, meaning that the final outcome is certainly not set in stone. This is why a large number of property investors and landlords are opting to wait and see what the Renters Reform Bill ultimately means for the sector.
The main points from the Renters Reform Bill
The 89-page document making its way through Parliament at the moment contains a number of detailed proposals for the private rented sector, but the most significant ones are:
- Scrapping Section 21 “no fault” evictions, while also increasing the powers and scope of Section 8 evictions to make it easier for landlords to still be able to make fairer and legitimate evictions, such as when the tenants is in rent arrears.
- Abolishing fixed term tenancies, and replacing them with rolling periodic tenancies (or assured tenancies).
- Removing discrimination from the sector, so buy-to-let property investors cannot refuse prospective tenants on the grounds of being benefits claimants or having children.
- Creating an ombudsman dedicated to settling disputes between landlords and tenants, as well as creating a national landlord register through a property portal to help improve transparency in the sector.
- Making it harder for landlords to impose a blanket ban on pets in properties.
While the Bill has taken longer than initially expected to make its way through parliament, there have also been a number of amendments suggested to the Bill, largely based on feedback from the industry, and this could change the final outcome of what gets made into law.
This includes a “moratorium” on tenants serving their two months’ notice in the first four months of the tenancy, meaning effectively all tenants will have to stay for an initial six-month period before moving out. The government has also promised to assess the courts and barriers to possession for landlords, so they are not negatively impacted by the eviction rule changes.
There are a number of other amendments, which property investors and landlords should make themselves aware of, but it remains to be seen what will ultimately come to pass.
Property investors and landlords “wait and see”
With such uncertainty surrounding the Bill, it is perhaps not surprising that the majority (62%) of landlords and property investors are either maintaining or expanding their rental portfolios in the year ahead, according to data from Leaders Roman Group, even in light of the looming potential changes.
More than half (55%) also said the Bill would not be impacting their investment strategies, due to the long-term nature of their investments. However, changes to rules around pets were a worry to 56% of property investors, who said they might anticipate negative impacts, along with 54% who said the same about the eviction changes.
Almost two thirds (63%) of property investors and landlords said they supported the Renters Reform Bill introducing easier repossession rules for properties with problematic tenants, while 52% were supportive of the introduction of a dedicated ombudsman.
Allison Thompson, Leaders Roman Group’s national lettings managing director, said: “Although there are some substantial changes in the private rented sector, both political and financial, the so-called ‘landlord exodus’ is being overstated – as this research demonstrates.
“Yes, there are some significant issues with the Renters (Reform) Bill but LRG and others have been actively involved in shaping this legislation so that it is fairer on landlords – who after all, are the mainstay of the property industry and depended upon by government to provide homes to some of those most in need.”
She added: “As local authority housing waiting lists continue to increase, I hope that government will reflect on landlords’ vital role and take their views into account as the legislation passes through Parliament.”
