Amongst the raft of planned legislation set out in the King's of the United Kingdom's speech on 17 July 2024, Labour have picked up where the Conservatives left off and reintroduced reform to the private rental market in a move to protect tenants from unscrupulous private landlords. The proposed changes largely follow those proposed by the Renter's Reform Bill (as summarised here) with some subtle tweaks and changes.
Some of the key aspects of the Bill are:
- The abolishment of section 21 notices – these are what are commonly called "no-fault evictions". Government figures show a 19% year on year increase in "no fault" evictions between January and March 2024 and appear keen to tackle this. The Government has promised some new possession grounds in due course and it will be interesting to see what these are although we suspect that they will largely follow those previously introduced by the Renter's Reform Bill. One particular area of interest is whether or not there will be special grounds for landlords of student housing to use and rely on.
- Strengthening tenant rights and protections – such measures will include an end to rental bidding wars stoked up by landlords and letting agents and rights to tenants to challenge rent increases put forward to force them out of their tenancy.
- Giving tenants the right to request a pet – landlords will be required to consider and not unreasonably refuse such consent. They will, however, be entitled to request that the tenant put insurance in place. The Government will hopefully issue some guidance as to what might be considered a reasonable reason to refuse consent. That said, it may need to be tested in court. We envisage a number of reasons why landlords might look to refuse consent; for instance, where large landowners have a standing ban on tenants having cats due to ecological and environmental reasons.
- Applying Decent Homes Standard to the private rented sector – this is to ensure safe and secure homes and to improve poor quality rental homes.
- Awaab's Law – this will seek to extend the framework of rules relating to time frames within which landlords of social housing are obliged to deal with serious and unsafe hazards in homes. Government figures indicate that 21% of private rented sector homes are non-decent and 12% (which is approximately 580,000 properties) contain a category 1 hazard such as severe damp or mould. The Government will be hoping to drive these numbers down by implementing stricter requirements on landlords.
- Creating a digital private rented sector database.
- Supporting cheaper, quicker resolution where there are disputes – the ability of the court system to deal with private tenancy-related disputes was one of the reasons that the Renter's Reform Bill did not make it through the previous parliament. One of the key differences in Labour's manifesto was that they wished to bring in Rental Reform straight away rather than introducing a transitional period that had been suggested as a stopgap by the Conservatives.
- Making it illegal for landlords to discriminate against tenants in receipt of benefits.
- Strengthening local council enforcement powers, which will include investigatory powers to make it simpler for Councils to enforce against landlords that are contravening the new rules.
Labour's manifesto differed from the previous Renter's Reform Bill in that it suggested that the abolition of section 21 notices would be immediate, whereas the previous draft legislation provided for a delayed implementation period in light of the potential challenges to the courts in dealing with disputes arising out of the new legislation. The timetable for bringing in the changes remains to be seen.
The creation of a new digital sector database has peaked our interest. This has the potential to vastly simplify the process and make both the lives of private landlords and tenants easier. This could be achieved by providing a clear framework and checklist for landlords which can be used as a reference point in order to ensure compliance with the multitude of requirements that they face, such as complying with right to rent check requirements and ensuring that smoke alarm regulations are adhered to. It will also be interesting to see how Labour propose to utilise the new Ombudsman service to support cheaper and quicker resolution and avoid overloading the already overburdened courts system. One of the reasons that the Renter's Reform Bill did not pass through in time during the Conservative government was the well-founded concern that the court system would not be able to deal with the potential increase in cases coming before them.
Next steps
As always, the devil will be in the detail. We await the operative provisions of the Bill but will provide updates as and when these are available. Private landlords would do well to ensure that they have a clear and organised oversight of their portfolios, especially those with a larger number of tenancies. It will be imperative with certain tenancies that they react quickly to the legislation once it is tabled.
