Will the Renters Rights Bill Increase Rents?
Tenants are looking forward to increased tenant rights after Angela Rayner’s Renters’ Rights Bill becomes law. Many landlords fear that the Renters’ Rights Bill will force them to sell up if they can't increase rents to make renting a property a viable enterprise.
Landlord and Tenant Solicitors are now looking at the government‘s impact assessment to get a better understanding of how the legislation will affect landlords and tenants.
Online and London-based Landlord and Tenant Solicitors
For landlord and tenant advice call the experts at OTS Solicitors on 0203 959 9123 or complete our online enquiry form.
Who Will the Renters’ Rights Bill Affect?
The Renters’ Rights Bill will affect:
- 11 million renters
- 3 million landlords
What Will the Renters’ Rights Bill Sort Out?
The aims of the Renters’ Rights Bill are to:
- Give renters better security
- Improve the standard of rental properties
- Provide greater protection from rogue landlords
The Key Changes in the Renters’ Rights Bill
When the Renters’ Rights Bill becomes law the key changes in landlord and tenant law will be:
- Ending no-fault Section 21 notices and eviction
- Ending fixed-term assured tenancies. All tenancies will be periodic
- Changing the grounds for possession
- Limiting above-market rent rises
- Introduction of a Private Rented Sector Landlord Ombudsman to resolve landlord and tenant disputes
- Creating a Private Rented Sector Database of landlords
- Landlords won't be able to unreasonably refuse tenants with pets
- Applying the Decent Homes Standard to the private rental sector
- Applying ‘Awaab’s Law’ to make rental homes safer for tenants
- Preventing landlord discrimination against tenants with children or on state benefits
- Stopping rent bidding on private sector rentals
- Improving local authority enforcement
- Strengthening rent repayment orders
With 13 key changes, landlords and letting agents need legal advice on landlord obligations under the Renters’ Rights Bill to ensure they are ready for the new law.
Getting Possession of Rental Property
Our Possession Solicitors have received a steady increase in requests for legal advice on Section 21 notices from London landlords anxious to evict problem tenants or to secure possession so they can sell up and get out of the rental sector. That’s partially because landlords don’t know how to get possession after the Renters’ Rights Bill becomes law. There are lots of scare stories but the Bill says:
- Tenancies will be periodic so landlords and tenants will need to give notice to end the tenancy
- A tenant will have to give their landlord two months’ notice
- The landlord’s notice period will depend on the ground for possession
- Landlords will need to go to court for possession if a tenant won't leave after being given notice
- There are expanded grounds for possession
- Some grounds for possession will be mandatory
- The court will be able to exercise discretion in non-mandatory possession proceedings and only give the landlord possession if it's reasonable to do so
- Landlords won't be able to evict a tenant unless they have properly protected a tenant’s deposit and registered the property on the database
- There are greater protections for tenants at risk of possession for rent arrears
The Renters’ Rights Bill and Rent Increases
The Renters’ Rights Bill aims to end back-door eviction (the practice of landlords forcing tenants to leave their homes through large rent increases).
The Renters’ Rights Bill says:
- Landlords will only be able to increase rents once a year, limited to the market rate
- Tenancy agreements won't contain rent review clauses because rent can only be reviewed annually
- The market rate for the new rent will be the price that would be achieved if the property was newly advertised to let
- Rent increases will be started by the landlord serving notice of the new rent and giving at least two months’ notice of it taking effect
- The tenant can challenge the new rent at a First-tier Tribunal
- The tribunal won't be able to increase the rent above the new amount requested by the landlord
- Rent increases will take effect from the date of the tribunal decision
- Tribunals will have the power to defer rent rises by up to two months if they think the tenant will suffer undue hardship
Renters’ Rights Bill and Tenancy Agreements
The Bill intends to stop Section 21 evictions so it plans to change existing tenancy agreements.
The Renters’ Rights Bill says:
- The new tenancy system will apply to all private tenancies
- Existing fixed-term tenancies will convert to periodic tenancies so landlords can't serve new Section 21 notices even where a tenancy agreement started before the implementation of the Renters’ Rights Bill
The Renters’ Rights Bill and the Private Rented Sector Database of Landlords
When the Bill becomes law, landlords must pay to register on the database. Local councils will be able to
- Take enforcement action against private landlords that fail to join the database
- Issue civil penalties of up to £7,000 for a first offence where a landlord lets or advertises a property without it being registered on the database
- Issue civil penalties of up to £40,000 if a landlord repeatedly breaches the registration requirement or if they commit a serious offence. A landlord could also face criminal prosecution
- Information on offences will be viewable by tenants and prospective tenants to give them information to help decide whether to enter a tenancy agreement
The Government‘s Impact Assessment on the Renters’ Rights Bill
The government published an impact assessment in November 2024. The key points in the impact assessment are:
- The average extra cost of the Bill’s measures to landlords is projected at £22 per year per property or 0.2% of annual average rents
- The costs associated with the Bill’s measures are predicted to be passed on to tenants
- Letting agents will be affected by the provisions in the Bill as it is anticipated that tenants won't move as much
- There is a risk that some landlords will leave the sector but it isn’t thought that many will sell up as the additional annual costs to landlords are not thought to amount to more than 0.2 percent of annual average rents
The National Landlord Association warns landlords could face extra costs of around 10% when the Renters' Rights Bill becomes law. That’s a wide divergence from 0.2%.
The feedback our Landlord and Tenant Solicitors are getting from both landlords and tenants is that the Renters' Rights Bill is a worry because:
- Landlords fear that renting a property will not be a viable business model because they anticipate the Bill will cost them a lot more than a 0.2% loss in income
- Tenants fear that landlords will serve Section 21 notices now
- Tenants worry that whilst the Renters' Rights Bill will give them improved tenant rights there will be reduced numbers of properties available to let and that reduced availability will drive rental prices up as the market adjusts to demand
If you are concerned about where you stand as a landlord or tenant then our Landlord and Tenant Solicitors can advise you on the Renters' Rights Bill and any action you may wish to consider before the Bill is passed into law.
Online and London-based Landlord and Tenant Solicitors
For landlord and tenant advice call OTS Solicitors on 0203 959 9123 or complete our online enquiry form.
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