The Renters’ Rights Bill: Major changes ahead for residential landlords and tenants

In recent years, both the Conservative and Labour parties pledged to abolish the ability of residential landlords to serve “no fault” notices to quit (known as section 21 notices), which currently allow landlords to give tenants a minimum of two months’ notice to quit without specific reason.

The Conversative government’s attempt to do so, in the Renters Reform Bill, was midway through the process of becoming law when Parliament rose for the general election, and so the Bill did not proceed.

The Labour government yesterday published its own bill setting out proposed changes, the Renters’ Rights Bill. It will progress through Parliament and, assuming sufficient time is made available, the expectation is that it will receive Royal Assent and become law in late 2024 or early 2025.

This new Bill proposes significant reforms to the assured shorthold tenancy system, which is the most common type of residential tenancy in England. If it becomes law, it will drastically alter how landlords manage properties, from how they end tenancies to the grounds on which they can regain possession.

Property Dispute Resolution specialist Mark Turner from Butcher & Barlow explains what landlords need to know as the Renters’ Rights Bill progresses through Parliament.

Abolition of section 21

Given that both parties had made manifesto commitments to abolish section 21, it comes as no surprise that the bill proposes to do just that.

Landlords will no longer be able to serve “no fault” notices. The Bill will replace assured shorthold tenancies (ASTs) with periodic assured tenancies, with a maximum term of one month.

Notably, there are no transitional provisions for existing fixed term tenancies. There will be a single date on which all existing ASTs, of whatever type, will convert to periodic assured tenancies. The only exception will be where there are existing possession proceedings progressing through the courts.

The date on which the transition will take place is to be specified by regulations. The expectation currently seems to be that the new regime will take effect in the summer of 2025

No fixed term

Currently, ASTs have a minimum fixed term of 6 months. Under the new legislation, this minimum fixed term currently required for ASTs will be removed. Tenants will be able to serve notice to quit from the very first day of their tenancy, creating considerable uncertainty for landlords. This new provision has led some experts to speculate that it may lead to a shift toward short-term rental models, such as AirBnB-style lets, while smaller landlords could exit the rental market altogether.

New grounds for possession

Without section 21 notices, landlords will need to rely on specific grounds to regain possession of their properties.

Ground 8, currently the most commonly-used, for tenants with at least two months’ rent arrears, will be revised to increase the arrears requirement to three months. Where a landlord relies on this ground, four weeks’ notice will be required. It will remain a mandatory ground for possession meaning if proved, the court must issue a possession order.

The Bill also introduces two new grounds for possession, which will apply where a landlord intends to sell the property or if they, or a family member, wants to occupy the property. Neither of these grounds can be used in the first twelve months of a tenancy, and both will require four months’ notice from the landlord.

Courts are likely to very closely scrutinise claims using these grounds to ensure that they are not being abused; the evidence threshold required to prove a claim is likely to be high. Where granted, the landlord will not be able re-market or re-let the property for twelve months, with powers to local authorities to impose fines of up to £7,000 for breaches.

No delay in implementation

Unlike the previous Conservative government’s bill, which delayed the abolition of section 21 until the court system was equipped to handle the increased volume of possession claims, Labour’s Bill includes no such provision.

Many legal practitioners will tell you that the Court system is under-resourced, slow and inefficient. The previous Bill had implicitly recognised that, and that abolition of section 21 would lead to a significant increase in the number of claims requiring hearings and court time. It had therefore been proposed that implementation of the changes would be delayed until such time as the Lord Chancellor certified that the county court system would be able to deal with a surge in claims.

The new Bill does away with that. Whether additional funding for the court system will be forthcoming remains unclear (but in the current economic climate seems unlikely). Quite how that works out in practice remains to be seen…

Other key changes

The Bill introduces further regulations aimed at creating a fairer rental market, including:

• A requirement for landlords to state the proposed rent when initially advertising a property.
• A ban on encouraging or inviting rental bidding, or accepting higher rent than initially sought.
• An obligation on social housing providers to remedy hazards within a certain timeframe (known as “Awaab’s Law”). There is no indication in the Bill how this will apply to private tenancies.
• Time limits for landlords to approve tenants’ requests to keep pets, set at 28 days.
• A two-month notice period for landlords proposing rent increases.
  

Conclusion

Given the Labour government’s strong majority, it seems inevitable that the Bill will become law, and probably without significant amendment. Landlords should start preparing for these changes, especially the abolition of section 21 and the shift to periodic assured tenancies.

Until the Bill becomes law, landlords may still use section 21 notices to regain possession of properties. It is advisable to review your current tenancy agreements and consider taking action before the new regime takes effect.

 

How can Butcher & Barlow assist?

If you are a landlord concerned about the impact of the Renters’ Rights Bill, our Property Dispute Resolution Team is available to provide tailored advice to help you navigate the changes. We offer practical guidance on updating your tenancy agreements, understanding the new grounds for possession, and preparing for how the abolition of section 21 may affect your ability to regain possession of your property.

Whether you’re looking to safeguard your rental income or adapt your portfolio to the new legislation, our Team can offer the support and insight you need to stay ahead of the changes.

Mark Turner is a Property Dispute Resolution specialist at Butcher & Barlow, with significant experience in advising landlords on their rights and responsibilities. He has a keen understanding of the legislative changes within the residential rental sector and is available to help clients manage the challenges these changes may bring.

Mark can be contacted at mturner@butcher-barlow.co.uk or on  01606 334309.