On 17 May 2023, the Government introduced the long-awaited Renters (Reform) Bill to the Commons to “bring in a better deal for renters” in the rented sector and make significant changes to the Housing Act 1988 (HA1988).
The Bill is making its way through Parliament and is now unlikely to receive Royal Assent until the spring of 2024 and is unlikely to come into force before October 2024 at the earliest. Therefore we are unlikely to see any immediate changes but when we do, those changes will be significant and, amongst others, include:
The Bill is intended to address long stated concerns that some renters face a “ precarious lack of security”. These elements of the Bill have been well publicised in the media in the context of the proposed abolition of the Landlord’s right to terminate an assured shorthold tenancy (AST) which is often referred to as a ‘no-fault eviction’.
It is probably more accurate to say that the main thrust of the Bill set out, under the heading ‘End of certain kinds of assured tenancy’, is the abolition of ASTs entirely and the removal of the ability to grant any form of fixed term tenancy. This is a significant change to the short-term lettings market and the balance of power between landlord and tenant. The Bill effectively proposes that all rental properties ( private and social housing tenancies) will be under a periodic tenancy.
A further effect of these potentially far-ranging changes will be that any tenancy agreement entered into where the annual rent is between £750 (£1,000 in London) and £100,000 will be a full periodic (monthly) assured tenancy which may only be terminated by the landlord where one (or more) of the grounds for possession in schedule 2 HA1988 are satisfied.
To address the concerns around being able to recover possession of a property let on a full assured tenancy, the Bill proposes to amend the current grounds for possession which will allow landlords to recover possession in limited circumstances where:
The explanatory notes to the Bill state that the private rented sector has doubled in size since 2002 with 4.6 million households or 11 million people renting from a private landlord.
In the private sector and the ever-expanding build to rent sector there is some concern that the proposed changes, particularly the end of ‘no-fault evictions’, will make residential property less attractive as an investment.
Whilst the main elements of the Bill have been largely discussed in the context of the private rented sector the changes will also affect the social housing sector. RPs also of course also use assured and assured shorthold tenancies and will also lead to providers having to review the widespread use of starter tenancies.