Welcome to the second edition of RED Alert of 2025.

Also featuring in this month's update:

• Fence and sensibility: Supreme Court defines 'reasonable belief'
• Moths, mansions and misrepresentation: don't let the truth fly away
• A new era for flat ownership? Government unveils Commonhold White Paper

Following the introduction of the Renters' Rights Bill (the Bill) into the House of Commons, the House of Lords has introduced several substantial amendments ahead of its Committee stage. These adjustments reflect an ongoing effort to balance tenant protections with landlord interests while ensuring that the legislative framework remains practical and enforceable.

A number of the concerns raised in our earlier article have been addressed but there remains a long road ahead.

Key amendments

• 12-month fixed term tenancies: the existing provision for 12-month fixed term tenancies will remain, with tenants having the option to extend their tenancy after four months of occupation. 
• Student tenancies: recognising the unique nature of student housing needs, fixed-term tenancies for students are preserved. This amendment aims to provide reassurance to both students seeking accommodation certainty and landlords catering specifically to this demographic.
• Section 21 notices: landlords who own fewer than five properties will retain the ability to issue section 21 notices, commonly referred to as 'no-fault' eviction notices. However, this power will be subject to further scrutiny and potential future changes.
• Discretionary possession grounds: all grounds for possession are to be discretionary rather than mandatory, granting courts greater latitude in evaluating individual cases and considering equitable outcomes for all parties involved.
• Notice periods for tenants: tenants will only be able to give notice to quit after four months of occupancy, effectively establishing a minimum tenancy term of six months. This change seeks to reduce turnover rates and provide landlords with more predictable rental income streams.
• Judicial system impact assessment: the Lord Chancellor is tasked with conducting a comprehensive assessment of the Bill’s impact on the judicial system within two years post-enactment. One of the key concerns around the Bill has been the impact on the court system and the lack of available resource within that system to progress applications quickly and efficiently.
• Delayed removal of Section 21: The complete removal of section 21 notices is postponed pending the judicial system impact assessment by the Lord Chancellor.
• Advance rent payments: tenants will be permitted to pay up to 12 months' rent in advance if mutually agreed upon with their landlord.
• Index-linked rent increases: rent hikes within the first four years of tenancy must be index-linked. Limitations on tenants’ capacity to challenge these increases are proposed.
• Deletion of the requirement that rent can only be decreased by the Tribunal: this will remove the potential incentive for tenants to appeal all rent increases.
• Consultation on capacity of Tribunals to determine rent increase disputes: the Secretary of State to consult on whether Tribunals possess adequate resources to handle disputes over rent increases efficiently; an essential step towards maintaining swift dispute resolution processes.
• Restrictions on guarantor requests: landlords may face restrictions regarding when they can request guarantors from prospective tenants, to prevent undue burdens on renters without compromising landlord security interests unduly.

Legislative process

The Bill will now be examined by the House of Lords at Committee stage. This entails a line-by-line review with all amendments considered, commencing on 22 April 2025. Following Committee stage, the Bill will be reprinted with all the amendments agreed to give members of the House of Lords a further opportunity to examine and make amendments to the Bill ahead of its Third Reading. At Third Reading, there is a final chance for the Lords to tidy up the Bill before it is sent back to the Commons.

The Commons then consider the amendments made by the Lords and can either agree or reject the amendments – if rejected the Bill 'ping pongs' back to the Lords until all points are agreed. It is only once both Houses agree that the Bill will receive Royal Assent and become an Act of Parliament. This does not necessarily mean that it will then be in force – there may well be a transitionary period.

Our comments

It remains unclear when or in what form the Bill will come to pass. Some of the amendments made by the Lords are promising, confirming that a full review of the capacity of the courts to cope with the reforms is required before implementation. In addition, concerns around student accommodation have also been addressed, together with protections for smaller landlords. However, if a 12-month fixed term tenancy will remain an option, it is questionable how many tenancies will opt to be rolling monthly periodic tenancies.

Until we know which amendments will be accepted and which will be rejected, it is difficult to predict the outlook for the Bill. We will continue to closely monitor the Bill's progress through Committee stage and beyond.