Rental Reform Bill - the key changes

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Last year's White Paper promised the biggest shake-up of the private rental sector in a generation. The new Bill doesn't disappoint. We look at the main reforms investors need to be aware of.

The legal framework defining the relationship between landlords and tenants dates back over thirty teas - a time when the private rental sector was far smaller than it is today. Since then it has become widely regarded  as no longer fit for purpose, with the balance being too skewed towards landlords.

The government committed to reform of the sector in their 2019 manifesto. Delivery has come a major step closer with the publication of the Renters (Reform) Bill.

Initial reactions range from "an attack on landlords" to "a good start". This blog offers no opinion other than to say that the landlords who will prosper will be those who embrace change, not those who fight it.

The Bill's key points:

The end of Section 21 evictions

The new Bill will end 'no fault' Section 21 evictions. Under the current system, property owners are able to give two months notice to evict a tenant without quoting any grounds. The courts have no discretion in this matter. When applied for, an eviction must be granted.

While offering a safety net for property owners, this system leaves tenants with no long term security and is open to abuse by unscrupulous landlords who use Section 21 to intimidate and evict tenants with justifiable grievances.

The introduction of 'periodic' tenancies

The Bill will end fixed term tenancies and move to periodic tenancies which have no end date. Existing tenancies will automatically convert to the new system.

Tenants will be able to end tenancies with two months notice. Landlords will be able to gain possession of their properties under reasonable circumstances defined in law, These would include the intended sale of a property, the intention to live in it or breach of contract such as non-payment of rent. Currently, these circumstances are dealt with under 'Section 8.

Strengthening Section 8

Under current legislation, landlords may seek an eviction order from a court where it is justified by, for example, persistent rent arrears or antisocial behaviour. However, the issuance of a section 28 order is often protracted and expensive. When the White Paper was originally published, landlord advocacy groups drew attention to the fact that abolishing no fault evictions would be unworkable without an improved system for justified evictions.

The new Bill ensures grounds for possession are "comprehensive, fair and efficient and "cover all circumstances under which a landlord might reasonably  expect possession". If a tenant disputes the grounds, it will be for the courts to decide.

Change to rent increase procedure

The Renters (Reform) Bill sets out a simple process for property owners to increase rents. Two months notice must be given using a government provided standard form. If the tenant accepts the increase, no further action is necessary. Rents may only be increased once per year.

Tenants may challenge rent increases to a First Tier Tribunal if they believe the new figure is above market rates.

Establishment of an Ombudsman

Landlords will be required to be part of a government approved redress scheme to be administered by a single Ombudsman. This will cover disputes such as the condition of the property and non-completion of repairs. It is intended that this streamlines service will be quicker and cheaper than the current adversarial court system.

This will bring the private sector in line with social housing. It is worth noting that many landlords are already part of a redress scheme through the use of letting agents.

Property portal and database

A digital property portal will be set up to .help landlords to understand their legal responsibilities through a single 'front door'. It will also help tenants to understand the steps available to them for dispute resolution.

All landlords will be required to register themselves and their properties on the portal. This is intended to increase transparency and allow local authorities to identify non-compliant properties.

More information

The full Bill (89 pages) may be downloaded from the Government website - 

HM Gov - Renters (Reform) Bill

Summaries in a more digestible format are also available -

HM Gov - Guide to the Renters (Reform) Bill

HM Gov - Tenancy Reform

HM Gov - Private Rented Sector Ombudsman

HM Gov - Privately Rented Property Portal

HM Gov - Renting with Pets