Amelia Cavinder, Mahzabin Rahman Rafah and Vinod Aithal consider the main provisions of the Renters’ Rights Bill 2024
Introduction
“As part of a complete overhaul of the sector, the government has outlined plans to consult on new legislation to abolish Section 21 evictions – so called ‘no-fault’ evictions. This will bring an end to private landlords uprooting tenants from their homes with as little as 8 weeks’ notice after the fixed-term contract has come to an end.”
The government has promised the most significant changes to the private rental sector for years. Since the 1980s, the prevailing philosophy was that deregulating the rental market would result in more rental properties of better quality at affordable prices. However, the reality has not aligned with these expectations, and tenants often face high rents, substandard conditions, and limited security of tenure.
With renters’ rights being in the headlines again, you might think the quote at the top of this post is quite recent. In fact, it’s actually from 15 April 2019, under Theresa May’s government (four Prime Ministers ago), when the announcement was made that the private rental market was to be radically altered to give renters more security, stability and dignity in their homes.
The rights of tenants have been rising up the political agenda for almost a decade, as the proportion of the population living in the private rental sector (PRS) has increased, accompanied by a fall in the number of homeowners or tenants in the social rented sector. The Renters’ Rights Bill aims to fix the faults in the sector, having its first reading on 11 September and will get its second on 9 October.
This Bill resurrects the Renters (Reform) Bill, introduced by former Housing Secretary Michael Gove under the previous Conservative administration, which made it a little over half way through the legislative process until it fell when the snap general election was called in May. Now Angela Rayner, Secretary of State for Levelling Up, Housing and Communities, is sponsoring the bill’s progress to parliament, and has promised significant toughening of the Bill, with the headline-grabbing pledges such as immediately abolishing section 21 ‘no fault’ evictions. But the Bill goes far beyond that, with a large-scale reorganisation of the rules governing the standards of rented homes, periodic tenancies.
We will take a look at some of the bigger items in the Bill, beginning with section 21.
‘No fault’ evictions
As it stands, under section 21 of the Housing Act 1988, a landlord has the right to evict a tenant without giving any reason for doing so. Providing the landlord gives at least two months’ notice, a tenant can be evicted at the end of a fixed term tenancy, or at any point during a rolling, periodic tenancy.
Naturally, this set up increases the vulnerability of tenants. Where the housing market is already weighted in favour of landlords, a section 21 eviction notice can be used as a mechanism for increasing rent, to persuade the tenant to accept substandard conditions, or to discriminate against tenants in just about any way a bad landlord would want.
The proposed Renters’ Rights Bill proposes to abolish section 21 immediately upon the Bill’s Royal Assent. This is a strengthening of the measure proposed by the previous government, which would have retained it until capacity in the courts for dealing with an anticipated increase in eviction litigation was put in place. The prohibition of this type of eviction aims to safeguard tenants from homelessness and to give them more protection from discriminatory practices. Landlords will instead have to follow section 8 procedures, which require a valid reason for eviction. Acceptable grounds may include tenants’ antisocial behaviour, failure to pay rent, or a need for the landlord to sell or move into the property.
The prohibition of Section 21 alone will provide tenants with the assurance necessary to contest poor practices without the apprehension of facing retaliatory eviction. In the previous year, approximately 26,000 households encountered homelessness due to Section 21 evictions and subsequently sought assistance from their local council. Such enhanced security will provide renters with a sense of assurance.
While some landlords may attempt to use Section 21 before the Bill becomes law, the new rules aim to provide tenants with greater security and transparency.
Rent increases
At present, a landlord can increase rent at any point during a periodic tenancy, or during a fixed term tenancy with the tenant’s consent. Any increase must be ‘fair and realistic’, and in line with average local rents.
This has, in effect, caused something of a ‘race to the top’ in terms of prices, as landlords compete to raise their rents at the maximum within the level of average local rents, a trend exacerbated post-pandemic, when demand for rental properties in urban areas spiked, alongside wider instability in the property market and tax regime. The resulting shortage of supply has seen an upward spiral of rents.
According to the Office for National Statistics, London witnessed annual rent inflation of 11.2% in the 12 months up to March 2024, with the West Midlands closely following with a 9.4% increase. Although some of this may reflect increased costs for landlords, given that inflation is now generally falling, there may be a suspicion that there is some excess profit-taking by landlords as they take advantage of their market power.
Tenants must be given notice of the rent increase, the time for which depends on the period of their tenancy. They may also currently challenge rent increases in the First Tier Tribunal if they think that it exceeds the Market Rate.
The Renters’ Rights Bill proposes limiting rent increases to once per year, requiring landlords to issue a Section 13 notice at least two months before the increase. The increase must not exceed the Market Rate, defined as the rent the property could reasonably fetch if publicly advertised.
The Bill also aims to improve pathways for tenants to challenge rent increases at the First-tier Tribunal. Unlike the current system, where tribunals can approve rent increases above the contested rate, the Bill would remove this power, reducing tenants’ risk in disputing rent hikes
What the government seems to be shying away from is any kind of accusation that they are proposing ‘rent controls’, preferring instead to attempt to allow landlords to charge a market rent, but subject to controls on what are deemed to be ‘excessive’ rent rises.
The changes here are predicted to prevent landlords from using punitive rent increases as a tool for unlawfully evicting a tenant. They also promise more stability and certainty for tenants currently caught between accepting unaffordable increase or facing the routine expense and disruption of relocation.
Standards of Housing
The Bill also seeks to improve the general quality of the properties provided by landlords.
This Bill expands Awaab’s Law to encompass the private rented sector. This law was introduced following the tragic death of Awaab Ishak as a result of exposure to mould in his family’s home. It compels landlords to investigate and fix health hazards within specified timeframes.
In addressing this issue, the Decent Homes Standard will be implemented in the private rented sector for the first time. At present, 21% of privately rented residences are classified as non-decent, with over 500,000 showing the most severe hazards. Clear expectations will be established to ensure that tenants can anticipate safe, well-maintained, and secure living conditions.
Landlords who adhere to these standards are predicted to experience advantages stemming from well-defined regulations. This measure will address the issue of unfair competition from poor landlords who have undercut landlords who already try to provide decent homes.
Conclusion
Once in force, this bill is expected to provide more clarity for tenants. While optimists hope that more tenant-friendly tribunal powers will arm renters with more channels to dispute their rights, it may lead to more work for organisations like BLAC, as these new rights are asserted without any wider reforms to access to justice or Legal Aid.
Deputy Prime Minister, Angela Rayner said:
“Renters have been let down for too long and too many are stuck in disgraceful conditions, powerless to act because of the threat of a retaliatory eviction hanging over them. Most landlords act in a responsible way but a small number of unscrupulous ones are tarnishing the reputation of the whole sector by making the most of the housing crisis and forcing tenants into bidding wars. There can be no more dither and delay. We must overhaul renting and rebalance the relationship between tenant and landlord. This Bill will do just that and tenants can be reassured this Government will protect them.“
In the longer term, we would hope that this legislation would lead to a drop off in housing clinic calls, as landlords comply with the rules, and the worst offenders leave the market altogether.
In addition to the points discussed in this blog, here are a few more of the provisions proposed by the Bill:
• No more fixed-term contracts
• All periodic tenancies must be monthly or 28 days or less
• Applying a decent homes standard to the private rented sector for the first time. Landlords who fail to address serious hazards can be fined up to £7,000 by local councils and may face prosecution for non-compliance.
• Tenants must give two months’ notice to leave the property unless a lesser time has been agreed upon.
• Existing tenancies at the start of the act will convert to periodic at commencement.
• Landlords will now only be able to increase rents once per year using a section 13 notice, with at least two months’ notice before the new rent takes effect.
• Prohibition on anti-social behaviour and significant arrears
• Prohibition of rental discrimination, and the elimination of blanket bans affecting individuals on benefits or those with children.
• A ban on rental bidding wars
• No ‘unreasonable refusal’ of pets
The Tenant’s View
N is a tenant based in London. After approaching BPP Legal Advice Clinic for support, he explains the personal impact of the existing law.
Due to the lack of any requirement to give a reason, section 21 was shamelessly and transparently wielded against us to demand a rent increase orders of magnitude higher than the maximum increase in our active rolling contract– that clause being unenforceable only because of the power to terminate the contract through section 21. Because it was not retaliatory in the narrow sense of current protections, the landlord/agency made no attempt to hide the clear line between our refusing to pay an exorbitant increase and our being threatened with eviction.
“The landlord also leveraged this unchecked power to deny us flexibility in tenant changes that would otherwise not be possible to withhold without reason, also with the goal to extract more rent. In a shared home, this further weaponises the uncertainty of an eviction threat to make it more likely tenants will give up and leave or pay a huge increase.
“They simultaneously used the differing timelines of council tenants to hamstring the property owner, who had signed a deal with them he now wished to get out of, and make it harder for him to leave the arrangement and rent to us directly.
“There is a severe lack of clarity on overall timelines as a tenant when this happens. We have not yet received an actual court order 7 months after our section 21 letter, but cannot be sure whether this is due to court delays or if the landlord never went to court.
“Both the initial threat and this uncertainty are quite destabilising and stressful. They have forced us to absorb costs and take on significant admin that may or may not ultimately have been necessary, to reduce the risk of having to leave our home at short notice: seeking advice, doing independent research and making preparations for new homes.
“I also believe that this kind of threat is implicit in almost all UK private renting agreements and causes huge numbers of issues with housing, serious and otherwise, to go unreported for risk of rent hikes or eviction.”
