Despite being intended to make renting more equitable, the ideas have caused landlords and letting agents to express concerns.
The Renters' Rights Bill that was introduced on 11th September, 2024 has the potential to revolutionise the UK rental industry by granting tenants greater autonomy and rights while imposing new regulations on landlords. Despite being intended to
make renting more equitable, the ideas have caused landlords and letting agents to express concerns. Below is a summary of the Bill's contents and potential effects on both landlords and tenants.
1. Periodic tenancies
The transition to periodic tenancies, which allow tenants to terminate their lease with as little as two months' notice, is one of the largest changes. According to the government, tenants will have more flexibility to relocate in order to take a new
career or purchase a home. However, letting agents and landlords aren't as excited. According to a Propertymark survey, 93% of agents think that ending fixed-term rentals will be detrimental to both parties. They contend that these contracts offer
stability for both landlords who depend on a steady stream of rental money and tenants who desire security. Since the student rental market is dependent on fixed periods linked to the academic year, it may experience significant upheaval.
2. Possession and evictions
New guidelines for tenant evictions are introduced under the bill. Landlords are not allowed to demand renters vacate the premises in order to sell or move into the property within the first 12 months of a lease. Four months' notice will be needed
after this protected period. Landlords still have the right to remove renters for non-payment of rent, but the threshold is now higher—tenants must now be three months past due date, instead of only two months past the due date, and
landlords will need to give more notice. Sectors where quick turnovers are critical, such as student housing, will be subject to special regulations.
3. Tribunal and rent increases
The Bill will regulate the procedures for rent increases. Rent increases will only be permitted by landlords once a year, and they will require at least two months' notice. Tenants may file a challenge with a Tribunal if they believe the increase
is unfair. Crucially, the Tribunal can no longer suggest a higher rate than the landlord first requested, though it can still postpone the rise for up to two months in exceptional circumstances.
5. Ombudsman for landlords
The new regulations mandate that all landlords sign up for a landlord Ombudsman program. Tenant complaints will be handled by the Ombudsman, who has the authority to make repairs, issue an apology, or even award damages to landlords. Failure to
register might result in fines of up to £40,000 for landlords. Additionally, in the event that their landlord consistently disregards the regulations, tenants will be able to request Rent Repayment Orders.
7. Eliminating discrimination and bidding wars
By forcing landlords to post a fixed asking rent and prohibiting them from taking offers beyond that amount, the bill seeks to put an end to bidding wars. It also prohibits the discriminatory rental practices of rejecting tenants based only on
the fact that they are receiving benefits or have children. Rather than considering a tenant's unique situation, landlords must determine if they can afford the rent.
These modifications seek to give tenants greater
security and transparency in their rental experience while imposing additional duties on landlords. Should the Bill be approved, the UK rental market may undergo a substantial change by the summer of 2025.