The UK’s Renters’ Rights Bill: What You Need to Know

The Renters' Rights Bill, introduced on 11 September 2024, marks a significant step in reshaping the UK rental market. If passed into law, this Bill will bring key changes to the private-rented and build-to-rent sectors, building on reforms proposed in 2023. Here’s a breakdown of the most important updates and what they mean for landlords, tenants, and housing providers.

What does the Renters Rights Bill mean to property investors?

Renters Rights Bill - What’s Changing?

1. Fixed-Term Tenancies Abolished

The Bill eliminates fixed-term assured shorthold tenancies (ASTs), replacing them with periodic tenancies that continue indefinitely unless terminated. Tenants can end a tenancy with two months’ notice, while landlords must meet strict criteria to terminate agreements.

2. No-Fault Evictions Scrapped

Section 21 of the Housing Act 1988, which allows landlords to evict tenants without providing a reason, will be repealed. Going forward, landlords will need to prove specific grounds for eviction.

3. Tougher Rules on Rent Arrears

Evictions due to unpaid rent will face stricter requirements. Landlords must provide four weeks’ notice (up from two weeks), and tenants need to be at least three months behind on rent (up from two months).

4. New Rules on Rent Increases

The Bill limits rent increases to once per year, requiring alignment with market rates. Tenants can challenge these increases at a Tribunal, with changes taking effect only after a decision is made.

5. Additional Reforms

Other updates include:

• Establishing a new rental ombudsman to resolve disputes.

• Extending "Awaab’s Law" - requiring landlords to address severe health hazards quickly- to private rentals.

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What About Purpose-Built Student Accommodation (PBSA)?

PBSA providers registered under government-approved codes appear to be exempt from the Bill’s provisions. However, many providers who currently use ASTs for students may not qualify for this exemption. Further clarification is expected as the Bill moves through Parliament.

Why Does This Matter?

The Renters’ Rights Bill reflects the Labour Government’s commitment to prioritising tenant rights and reforming the rental market. If passed, it will introduce sweeping changes that landlords, tenants, and housing providers need to prepare for.

What’s Next?

The Bill is still in the early stages and subject to changes as it moves through Parliament. Stay tuned for updates as the Renters’ Rights Bill progresses toward becoming law.