Despite recent progress for the Renters’ Rights Bill through Parliament, it seems the legislation will not come into effect until after the summer recess.
Buy-to-let landlords have a little longer to get their ducks in a row before the Renters’ Rights Bill takes effect – with the finer details of what will actually become law still being tweaked.
The Third Reading of the Bill in the House of Lords has been scheduled for next week (21st July), when the latest iteration of it will be debated and potentially amended before it is moved through to the final stages: consideration of amendments and Royal Assent.
But this then only leaves a matter of days before UK Parliament is adjourned for summer recess, and there is no time scheduled for MPs to debate the issue before the break.
At the moment, Lucy Powell MP, leader of the House of Commons, has scheduled consideration of amendments for 8th September, when it is expected that there will be a more detailed analysis of any potential changes to the Renters’ Rights Bill.
This might mean Royal Assent could take place shortly after this.
Renters’ Rights Bill: striking a balance
The Renters’ Rights Bill represents a major shake-up to the UK rental sector, which landlords and tenants must adapt to.
Some of the biggest changes will be the end of assured shorthold tenancy (AST) agreements which are currently the most common form of tenancy. These will instead be replaced with rolling, periodic tenancies, giving more flexibility to both landlords and tenants.
Eviction rules are also set to change. The Bill will ban Section 21 ‘no-fault’ evictions, instead strengthening the grounds and procedures involved in Section 8 eviction notices. This will mean landlords will need to be able to provide a reason, listed under Section 8, for evicting a tenant.
Rules around rent rises will also come into force, which will mean landlords can only increase the rent once a year, and this must be in line with local market rents. Tenants will also be able to dispute a suggested rent rise if they feel it is unreasonable.
Pets are also a big talking point within the Renters’ Rights Bill, with landlords no longer being able to ‘unreasonably’ reject a tenant’s request for a pet, or put a blanket ban on tenants with pets.
Over the course of the parliamentary process, the Bill has gone through a range of amendments; some of which have been welcomed while others have been criticised by some in the industry.
Commenting on the current progress of the Renters’ Rights Bill, Propertymark CEO Nathan Emerson said: “The Bill will represent some of the biggest evolutions seen within the rental sector in over thirty years, and it is encouraging to witness comprehensive discussion to help ensure the proposed legislation is fit for purpose and responsive to future needs.”
However, he added: “It must strike a workable balance between tenant needs, ensuring landlords are supported in their ambition to provide high-quality properties, and the need to encourage future investment in building sustainable housing to keep pace with ever-increasing demand.”
Positives for landlords
Like any new legislation, buy-to-let landlords must stay informed to ensure they will be compliant when the new rules come into effect. For seasoned landlords, navigating regulatory updates is par for the course.
According to Nicola Evans, head of residential portfolio management, Hamptons, aspects of the Renters’ Rights Bill will benefit landlords too: “This will create a more balanced and transparent rental market which should benefit everyone. Landlords and tenants should have a nicer relationship. You’re going to have tenants in properties paying a rent that they know is fair and properties being maintained to a higher standard.
“A tenant will continue to give two months’ notice when they want to leave a property, while landlords will typically need to give four. It seems likely that a responsible tenant living in a well maintained property will stay longer, which suits most landlords; they typically work hard to avoid changes of tenant as this increases void periods.”
Looking at the potential long-term outcome of the Renters’ Rights Bill, independent property lawyer David Smith notes: “The market will be radically different in three or four years’ time. It’s going to be a lot more structured. It will slow slightly in terms of its turnover. The landlords will be different, the tenants will be different.
“But there are large numbers of people who don’t want to buy a house, or can’t buy a house, can’t get into social housing, want to live in a private rented property, and there are plenty of people who want to supply it. Those numbers haven’t changed that much for quite some time and they’re not going to change just because you change the way that the rental occurs.”
