Renters' Rights Bill - Implications as a Landlord

The new Renters’ Rights Bill has been published this week; with the news the Government could introduce new rules in England as soon as next spring, for both new and existing tenancies.

At Hannon Holmes we are full aware this will be of concern to landlord's and so we are here to firstly, provide an overview of the key changes proposed, but importantly, how we can help you to limit your exposure to some of the financial impacts this could have on landlords.

OVERVIEW OF KEY CHANGES 

Changes will apply to both new and existing tenancies at the same time – and are expected to be in force by summer 2025.

Tenancy and possession

• End of Section 21, the so-called ‘no fault eviction’. Section 21 notices served before the commencement date will continue to be valid until they expire.

• Abolish fixed-term tenancies. All tenancies to become periodic with no more than a month at a time for the periods. Tenants can serve two months’ notice to end the tenancy, at any time, and via any written method.

• New ‘Landlord circumstance’ grounds. A new ground where the landlord needs to sell will be introduced, as well as an amended ground where the landlord or their family needs to move in. Landlords won’t be able to use these grounds in the first 12 months of a tenancy, will need to give four months’ notice, and can't market the property for 12 months after the notice expires or the claim is filed at court.

• Mandatory rent arrears ground amended - requiring three months’ arrears and four weeks’ notice.

• A new student possession ground – which will require prior notice from the landlord and only applies to HMOs let entirely to students.

• Ban discrimination against tenants in receipt of benefits or with children when choosing who to let?to.

Setting rents

• Ban rental bidding wars – preventing landlords and agents from encouraging or accepting rents above the listed rate.

• Limit in-tenancy rent rises to a single annual increase capped to whichever is lowest of market rates or the amount proposed by the landlord. Landlords must give two months’ notice. Tenants can challenge this via the First-tier Tribunal. Any increase can't happen until the tribunal’s made its decision.

Standards and enforcement

• Introduce a Decent Homes Standard to the private rented sector with fines of up to £7,000 for failing to meet standards?

• Extend Awaab’s Law to private renting – setting clear timeframes within which landlords must make homes safe where they contain serious hazards?

• Create a digital private rented sector database with information for landlords, tenants, and councils??

• Local authority enforcement - give local authorities greater powers to investigate and enter PRS properties and substantially increase the financial penalties for non-compliance

Resolving disputes

• Set up a new ombudsman service that will provide fair, impartial and binding resolution to both landlords and tenants, reducing the need to go to court.

• Support for landlords who want to initiate disputes will not be through the ombudsman but the Government has confirmed they are looking at ways to allow this. 

LIMIT YOUR RISK AS A LANDLORD 

One of the most significant impacts this will have to landlords is the time taken to obtain possession of your property should you require, even if there are rent arrears. Now, more than ever, we cannot recommend enough having an insurance policy in place that protects your rent. 

With the section 21 notice soon to be abolished, eviction times will undoubtedly increase and the grounds to evict will be tighter. This vastly increases a landlord's risk of rent arrears. 

We have a highly recommended Rent Protection Insurance, readily available, arranged and processed by us, available to Landlords regardless of if we manage your property or not.

For a relatively small price each month, your rent will be guaranteed, regardless of whether your tenant pays or not for an UNCAPPED time, until you obtain vacant possession. Better still - your legal fees are also covered. * Terms and conditions apply.

We are encouraging all landlords to consider a rental insurance policy. 

To enquire- Call 01204 793113 or email michelle@hannonholmes.co.uk