A Fairer Private Rented Sector
On 16th June 2022, the white paper “A Fairer Private Rented Sector” was published by the Department of Levelling Up, Housing and Communities (DLUHC) which shared insight in to what we can expect to see in the Renters Reform Bill.
The White Paper covers topics such as the ongoing abolition of section 21 notices, a tenant’s right to keep pets, changes in rent review procedures along with the creation of a new single ombudsman scheme and the creation of a property portal for all landlords.
We are pleased to share a summary of this below and would encourage any landlords to get in touch with us if should you wish to arrange a phone call to discuss this in any further detail.
What does it mean the ‘Abolition of Section 21’
Whilst section 21 will be abolished (the ‘no fault’ / 2 months notice only for repossession) the Government has acknowledged that the Schedule 2 possession grounds will have to be strengthened prior to abolishment.
Strengthening Schedule 2 will ensure that a landlord can still regain possession should they wish to sell a property or require the property as a home for themselves or a family member. The white paper goes on to confirm that all tenants will move onto a single system of period tenancies for which they will be able to terminate on 2 months’ notice. The new system will be implemented in two stages (from Royal Assent being granted) and at least 6 months’ notice will be given before the first implementation date.
Current tenancies will then transition onto a periodic tenancy on the second implementation date which will be at least 12 months after the first. It is at this point that all tenancies will be protected from a section 21 notice. We would like to note that PBSA will be exempt from the above.
Rent & rent reviews
When the above comes into force, contractual rent increases will no longer be permitted and all rent increases will have to come into play by the serving of a statutory notice. (EG there can be no index-linked or fixed uplifts). This notice must be in accordance with section 12 of the Housing Act 1988 and the notice period for rental increases will double to at least 2 months notice.
Should a tenant not agree with the new proposed rent then they will have the statutory right to have a decision heard by the First Tier Tribunal. In the case where a tenant has made an upfront rental payment, landlords may be required to repay any rent paid upfront. The Renters Reform Bill does also include a proposal to place a limit on the amount of upfront rent a landlord can ask for.
Along with the above, the Renters Reform Bill will also bring in additional new rights for tenants including:
- Tenants will have the right to request pets on their property
- No blanket prohibitions against renters
- A new Property Ombudsman for dispute resolution without the need for court
- No lifetime deposits
The reform has been described as one of the biggest changes in the private rented sector over the past 30 years and we would welcome you to get in touch should you wish to discuss any of the above in further detail.
If you want to be always informed about legislation changes, check out our property management services.