The Renters (Reform) Bill: How is the Bill Expected to Impact Landlords?

The Renters (Reform) Bill (‘the Bill’), introduced to Parliament in May 2023, represents a significant shift in the UK’s approach to the private rented sector (‘PRS’). As with any major legislative proposal, the Bill has sparked a range of opinions and discussions about its potential impact and effectiveness.

The PRS has seen substantial growth over the past two decades, with the number of privately rented properties doubling since 2004. This growth has brought to light various challenges and disparities within the sector. The Bill aims to address some of these issues.

Part 1 of the Bill, will amend the various sections of and Schedule 2 to the Housing Act 1988 (‘the 1988 Act’).

The Abolition of Assured Shorthold Tenancies (ASTs) 

One of the most notable changes is the abolition of Assured Shorthold Tenancies (‘ASTs’). Typically, landlords and tenants enter into a fixed-term AST. However, with the introduction of the Bill, there will be a transition towards a unified system of periodic tenancies. 

This means that the duration of the tenancy will align with the rent payment period, which – under the new provisions – cannot exceed a month. Importantly, tenants will have the right to give two months’ notice to vacate the premises, unless a shorter notice period is mutually agreed upon with the landlord.

The Abolition of Section 21: “No Fault Evictions”

Another significant change is the abolition of Section 21, commonly known as “no fault evictions”. Historically, Section 21 of the Act has empowered private landlords to reclaim their property without having to establish fault on the part of the tenant.

However, once the Bill is enacted, Section 21 of the Act will be repealed, and landlords will no longer be able to terminate tenancies by way of a “Section 21 Notice”.

Amended Grounds for Possession 

There will be thirty-three different grounds for possessions in Schedule 2 to the 1988 Act as amended. As is currently the case, the ground will be either: 

1. Mandatory (the court must give possession if the ground is made out); or
2. Discretionary (the court may give possession if the ground is made out).

Ground 1 is amended to allow landlords to recover possession in order for them or their close family members to move into the rental property. The requirement to serve a notice that this ground may be relied on prior to the start of the tenancy has been removed. The Bill defines “close family members” as the landlord’s spouse or children. Meanwhile, cousins, nieces, and nephews are not included. 

A new ground 1A is introduced for landlords who wish to sell their property. However, this ground will not be available to use during the first six months of the tenancy.

A new mandatory ground for repeated serious arrears is also being introduced (ground 8A). This ground will be made out where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears at the date of the hearing.

When Will the Renters Reform Bill Become Law?

New legislation in the UK normally becomes law on either the 1st of April or the 1st of October each year. Therefore, when the Bill is passed, it will likely become law on one of these dates. 

However, the parliamentary process can be lengthy, and the Bill may be subject to further amendments which could cause delays. The government has stated that it is committed to delivering reforms to the private rented sector, but the specific details of the legislation may change as it progresses through parliament.

How We Can Help 

SRB has an established dispute resolution and litigation department that specialise in landlord and tenant disputes. If you would like to discuss the potential impact of the Bill, please get in touch with a member of our team who will be able to provide tailored advice.