We have previously provided guidance on the proposed abolishment of Section 21 of the Housing Act 1988 in a previous article – A Review A Month on From the King’s Speech. Following that article, the new law set to change the landscape of landlord and tenant relationships has progressed further with the Bill having completed its second reading in the House of Lords on 15 January 2025.
This article is intended to set out the key changes which are set to come into force later this year, with experts anticipating the Bill is likely to become law around Spring.
This article has been prepared on the basis of the current edition of the Bill in force at the time of writing (15 January 2025) and it is recommended that you consult the current edition in force at the time of reading as the information below may have been updated by subsequent drafts.
Tenancies
Assured Shorthold Tenancies (or ASTs) will be abolished by the Bill when it comes into force. A landlord will no longer be able to grant a fixed term tenancy and any term in a tenancy agreement seeking to make a tenancy assured will not be legally valid. All tenancies will now instead be assured monthly periodic tenancies. If a fixed term tenancy is currently in existence, then this will automatically convert to an assured periodic tenancy on the commencement date of the Bill.
Together with the change of tenancy type, the new Bill will also limit the length of the rent period which is that these will have to be either monthly or no more than 28 days long. Any other term will be of no legal effect and the rent will be paid at the same level agreed but monthly on a pro-rata basis.
These changes carry with them the implications that a tenant will be able to give notice to end the tenancy whenever they need to do, rather than being locked into a fixed term with no break clause or unable to provide notice that expires at the end of a period which is unduly long.
Seeking re-possession
As previously set out, Section 21 evictions (“no-fault evictions”) will be abolished under the Renters’ Rights Bill.
Instead, a landlord will have to turn to grounds found in Schedule 2 of the Housing Act 1988 to seek possession of their property, with some previous grounds being amended and new grounds being introduced. The amendments to/introductions of new grounds are to be as follows:
· Ground 1 – The landlord, their spouse or civil partner or co-habitee or their child or grandchild or the landlord’s parent, grandparent, sibling, child or grandchild requires the property to move into it;
· Ground 1A – Landlord is seeking to sell freehold or leasehold interest or grant a lease for a term of 21 years not terminable before the end of that term;
· Ground 1B – A registered provider of social housing is seeking to sell, grant a lease or grant an assured tenancy to another person and the assured tenancy was entered into pursuant to a rent-to-buy agreement;
· Ground 2 – Sale by mortgagee;
· Ground 2ZA, 2ZB, 2ZC – Possession arising out of issues with a superior lease;
· Ground 4 (Mandatory) – Student Accommodation;
· Ground 4A – HMO Students;
· Ground 5 – Ministers of Religion;
· Grounds 5A, 5B, 5C, 5D – Employment-related housing;
· Grounds 5E and 5F – Supported housing;
· Ground 5G – Under the main housing duty under Section 193 of the Housing Act 1996;
· Ground 5H – Occupation as ‘stepping stone’ accommodation;
· Ground 6 – Redevelopment by landlord;
· Ground 6A – Enforcement action against the landlord e.g. a banning order, overcrowding, refusal or revocation of a HMO license; and
· Ground 8 – Amended the threshold for rent arrears to three months, rather than two.
The notice periods are to be as follows:
· For Grounds 1, 1A, 1B, 2, 2ZA, 2ZB, 2ZC, 4A, 6, 6A – Four months beginning with the date of service of the notice;
· For Grounds 5, 5A, 5B, 5C, 5D, 5H, 7 and 9 – Two months beginning with the date of service of the notice;
· For Grounds 5E, 5F, G, 8, 10, 11, 18 – Four weeks beginning with the date of the service of the notice;
· For Grounds 4, 7B, 12, 13, 14ZA, 14A, 15 and 17 – Two weeks beginning with the date of service of the notice.
For the purposes of Ground 1 and Ground 1A, it is important to note that a protected period of 12 months will run from the start date of the current tenancy. If a fixed term is already in place and nearing its end or the tenancy is currently a periodic AST such that these are abolished in favour of the new assured tenancy, transfer to the provisions of the Renters’ Rights Bill won’t take effect as the start date of a new tenancy.
It should also be noted that the sanctions for failure to comply with the deposit protection regulations which currently apply to no-fault evictions under Section 215 of the Housing Act 1988 will be transferred to apply to Section 8 evictions. They will also be amended so that such a notice will be valid so long as (1) the deposit is protected
within an authorised scheme, (2) the requirements in force with that scheme at the time the deposit have been complied with (with no timeframe to comply with those requirements), (3) the prescribed information under Section 213 of the Housing Act 2006 has been served (again, with no time requirement as to when it should have been done).
New financial penalties
Various financial penalties are introduced by the Renters’ Rights Bill which a local authority may seek against a landlord in compliance with the procedure set out in Schedule 5 of the Bill. These financial penalties shall be applied in respect of:
i. Clause 42 – Breach of rental anti-discrimination provisions as set out in Chapter 3 (prohibition of discrimination relating to children and benefit status) – a maximum fine amount of £7,000;
ii. Clause 59 – Allows financial penalties to be applied in respect of a breach of Clause 58 – Requirement to state rent and avoid rental bidding. This includes a specific rent amount in a written advert or offer for the tenancy and the prohibition against inviting, encouraging or accepting higher offers for the rent amount from prospective tenants. A maximum fine amount will be applicable of £7,000;
iii. Clause 67 – Allows financial penalties of up to £7,000 to be applied if Clause 65 has been breached by a landlord in failing to be a member of an approved or designated redress scheme, or the person (e.g. letting agent or other) has marketed a property where the landlord is not yet a member of a landlord redress scheme; and
iv. Clause 92 – Imposes financial penalties for breaches of requirements under Clause 83 (restriction on marketing, advertising and letting dwellings) – maximum fine amount will be £7,000 or any of the offences listed under Clause 93 – maximum fine amount will be £40,000.
Other key changes
Other key policies under the Bill include:
i. Landlords will be able to raise rents annually to market prices and must provide two months’ notice of any change. Tenants are able to challenge above-market increases through the First-Tier Tribunal (Property Chamber);
ii. The introduction of a Private Rented Sector Database which will contain entries of all existing residential landlords, prospective residential landlords and dwellings which are, or intend to be, let under residential tenancies as well as those subject to banning orders, convicted of other offences and who have been financially penalised. If landlords do not have an active entry on the PRS then no order for possession will be made by the Courts (not applicable to grounds 7A and 14);
iii. Landlords (regardless of if managing through a managing agent) will be required to become a member of a designated Landlord Redress Scheme;
iv. Landlords won’t be able to unreasonably withhold consent when a tenant requests to have a pet in their home. Tenants will be able to challenge a decision on this. Pet insurance will become a permitted payment under the Tenant Fees Act 2019;
v. Awaab’s Law shall apply to the private rented sector and timeframes will be set out as to when landlords must make homes safe where they contain serious hazards.
All references to legislation in this article is true as of the date of writing. We recommend that readers review the current version of the Bill in force at the relevant time – Renters’ Rights Bill – Parliamentary Bills – UK Parliament.
If you are a landlord or the tenant and have any questions or need advice in seeking possession/defending possession of a rented home or other tenancy related issues, please do not hesitate to contact our specialist team at disputeresolution@curzongreen.co.uk or on 0203 443 9576.