Will the proposed Renters Reform Bill reform the rental sector?

The UK Government has introduced to parliament new legislation, the Renters Reform Bill (RRB), designed to make the private rental sector (PRS) fairer.

Specific proposals in the RRB include:

• The removal of Section-21 no-fault evictions
• Amended Section-8 fault grounds for evicting anti-social tenants
• A new private rental ombudsman for policing disputes, with all private landlords required to join
• Tenants will be given the legal right to request a pet in their home

The RRB aims to protect tenants from sudden evictions through the removal of Section-21 no-fault evictions. The 2021 English Private Landlord Survey found that 67% of landlords who evicted tenants or asked them to leave in the last year gave their tenants a Section-21 notice. This means they were evicted without being given a reason.

For landlords, the RRB will strengthen their powers for evicting anti-social tenants through amended Section-8 fault grounds. A new private rental ombudsman will be responsible for policing disputes, with all private landlords required to join. This will take the form of digitised courts, in theory increasing convenience and lowering expense. Under these proposals, a landlord must consider a tenant’s request to keep pets and cannot unreasonably refuse. This may help some tenants with loneliness and wellbeing.

The Government have also stated they are committed to implementing reforms set out in their September 2022 consultation to apply the Decent Homes Standard to the PRS. However, these reforms are not currently part of the RRB. The Government have stated they seek to implement them at the earliest opportunity. In 2021, 3.4 million dwellings failed to meet the Decent Homes Standard, with 23% coming from the private rented sector.

We are supportive of any regulation that ensures protection for both landlords and tenants. However, the RRB may have some unintended consequences:

Firstly, if landlords are concerned about the removal of no-fault evictions, or if they feel the RRB does not support them, they may leave the market. The bill comes at a time when the demand for private rental properties is high, with the number of properties available exceeding the available supply. Landlords are already leaving the market due to rising costs, more regulation, and an uncertain outlook on property values. If this happens, then the RRB might lower supply and increase rents.

Secondly, the end of no-fault evictions is likely to make landlords more selective. This will lead to increased security checks being a new reality for prospective tenants, which might make renting even less likely for some. The English Private Landlord Survey found that 84% of landlords were unwilling to let to tenants with a history of rent arrears.

Thirdly, it is possible that the impact of the RRB will disproportionately affect the lower segment of the market where claims of anti-social behaviour are more common, increasing the number of anti-social evictions and court cases. Landlords renting higher-end properties may be more hedged against this.

Regardless, this is a step in the right direction, and the PRS has been overdue additional legislation connecting tenant security, landlord rights, and housing standards.

The security of tenants and the powers of landlords is a fine balancing act which requires careful consideration. It is worth noting that before the RRB is passed, it will likely undergo changes. The final piece of legislation should be more balanced than what has been initially proposed.

If the Renters Reform Bill works effectively, it could set a new baseline level of security for tenants and landlords. This depends on the capacity of the digitised courts to work smoothly, ensuring both parties can settle any disputes appropriately and fairly.