The Renters Rights Bill: What it means for tenants and landlords
Major reforms set to transform the private rental sector in 2025.
The Renters Right Bill is expected to come into force in Spring/Summer of 2025. It is set to make significant changes in the private rental sector, with the government seeking to balance more protection for tenants with maintaining a sufficient supply of rental properties. However, the Bill is heavily tenant-focused, providing greater security and stability to prevent tenants being unexpectedly evicted through no fault of their own. The Bill has just passed the second reading in the House of Lords, with further amendments expected before it is passed into law.
Key changes:
New tenancy system - Periodic tenancies
The Bill will abolish fixed-term assured or assured shorthold tenancies. There will be no requirement for minimum six-month tenancy. All tenancies will be 'periodic' from day one, and tenants will have the flexibility to terminate the tenancy at any time with two months' notice. This change will provide tenants with more freedom to leave due to personal circumstances or property condition issues, while also allowing landlords to regain possession for valid reasons. Existing tenancies will automatically convert to periodic tenancies upon the Bill’s implementation, with no transitional period.
Abolition of Section 21 evictions
The Bill will remove 'no-fault' evictions under Section 21. Landlords will only be able to evict tenants for valid reasons under Section 8, such as antisocial behaviour, property damage, or significant rent arrears. The changes include the following:
- Rent Arrears - The threshold for eviction will increase from two months to three months of arrears. Landlords will now have to provide four weeks' notice. This will allow tenants more time to repay arrears and remain in their homes, while ensuring landlords do not face unsustainable costs. The extended threshold, however, may mean increased losses for landlords before they can get the property back.
- Landlord Circumstance - Landlords will be able to ask for the property back if their circumstances change. For example, if they want to sell the property or if they or their family want to move in themselves. However, tenants will benefit from a 12-month protected period at the beginning of a tenancy, during which time evictions will not be permitted. Landlords will need to provide 4 months’ notice when using these grounds.
Rent increases and bidding wars
There will now be a ban on rent increase by Rent Review Clauses in the tenancy agreement. Landlords will only be able to increase rent once per year to the market rate through a statutory process, serving a Section 13 Notice with at least 2 months' notice.
If a tenant believes the proposed rent increase exceeds market rate, they can then still challenge this at the First-tier Tribunal. Any rent increase clause in existing agreements will become void under the Bill.
Rental bidding will no longer be allowed. Landlords and letting agents will be legally required to publish an asking rent for the property and cannot ask for or accept any bids above this price.
Only one month’s rent in advance alongside a security deposit will be permitted. Landlords and letting agents will no longer be permitted to demand multiple month's rent in advance or rent upfront as a condition of accepting the tenant.
Changes to guarantor obligations
If the guarantor is a family member the obligation will cease on death of tenants. However, if not related to the tenant, then then the guarantor remains responsible when the tenant passes away.
Rental discrimination
Discrimination against families with children or those who receiving benefits will be unlawful. The Bill will put in place provisions to ensure that mortgage conditions and superior leases which restrict the letting of a property to such groups are of no effect, preventing any breach of mortgage/lease conditions.
Renting with pets
Landlords will not be permitted to unreasonably withhold consent to pets in the property.
Decent Housing Standard (DHS) and Awaab's Law
An important focus of the change is to improve the standard of housing in the private rented sector. The Bill will introduce a new Decent Housing Standard (DHS) for the private rental sector, with local authorities granted enforcement powers. The DHS will apply to both the social and private rented sectors.
The Bill will extend Awaab’s Law to apply private rented sector homes. Awaab’s Law, named after the tragic death of two-year-old boy Awaab Ishak due mould exposure in his home, will require landlords to address hazards, such as damp and mould, within a specified timeframe.
Private Rented Sector Database
All landlords in the private rental sector will be required to register themselves and their properties on a Private Rented Sector Database. If a landlord was to market or let out a property without registering, they could be subject to penalties.
Private Rented Sector Landlord Ombudsman
It will be a requirement for all landlords in the private sector with assured or regulated tenancies to join a new Private Rented Sector Landlord Ombudsman Service. This will include landlords who use managing agents.
Tenants can use the service to lodge complaints, with the Ombudsman able to order remedial action or compensation. Failure to comply with the Ombudsman decision may result in a landlord being expelled from the scheme and Local Authority enforcement action.
Rent Repayment Orders
The Bill will extend the Rent Repayment Orders to all offences under the new legislation, doubling the maximum repayment from 12 months to 24 months' rent.
Excluded tenancies
The Bill will not apply to certain tenancies, such as those with rent of more than £100,000 per anum, tenancy to a letting company, purpose-built student accommodation.