Renters’ Rights - a historic day for the private rented sector

Today marks a momentous day for landlords and tenants as new rules for renting come in under the Renters’ Rights Act. As of today, fixed term tenancies and section 21 repossessions are no more, with a raft of further changes on the cards by the end of the year. Our chief executive Ben Beadle explains more.

Today is one for the history books, with tenancy elements of the Renters’ Rights Act coming into force, bringing with them the biggest changes to the private rented sector in almost 40 years.

The loss of the fixed term, abolition of the ‘no fault’ eviction process and restrictions on accepting rent in advance are now in play, and it is now illegal to increase rent more than once a year, encourage rental bidding wars or discriminate against potential tenants in receipt of benefits or with children.

You must also consider all requests for pets – which you cannot reasonably refuse – with beefed-up local authority powers to enforce the new rules bringing with them increased penalties of up to £40,000 for getting it wrong.

Robust challenge

Since plans for rental reform were first mooted by Theresa May’s Government back in 2019, we have campaigned tirelessly on your behalf.

Indeed, Housing Minister Matthew Pennycook, writing exclusively for our members’ magazine Property, recognised the ‘robust but constructive challenge’ we made during the Act’s passage through Parliament.

This has seen a number of key wins for you, our members, including:

• The introduction of ground 4a, allowing HMO landlords to take back student properties in time for the next year’s cohort of students
• A change to the transitional rules when it comes to section 21 repossessions, allowing landlords to apply to court right up to 31st July, rather than risking the courts not processing cases in time.
• A power allowing section 13 rules to be changed, so that rent increases can be backdated
• Plans for an alternative rent setting body
• Proposals for a formal review to gauge the success of the Act

This final point, on reviewing the Act is an important one.

This wasn’t the Act that we wanted, and our job now is to hold the Government to account on how it works in practice. For that we need hard evidence – and this evidence can only be demonstrated after the fact.

With 4.7 million households across England in the private rented sector, it is vital that the changes work for landlords as well as tenants.

Markers of success

For me, there will be three key markers of success:

• Has the Act got rid of the rogues giving the sector a bad name?
• Are landlords confident to stay in the market?
• Can the courts cope with the influx of possession claims quickly and fairly?

On all three tests, the jury is very firmly out.

We now need to gather evidence based on the experiences of landlords and their tenants over the next year to demonstrate any harm being done and support solutions that we will design and present to policy makers.

We will be keeping a close eye on the student market, where we believe Ground 4a should be available across the board, rather than solely to HMO landlords. We will also be looking at the courts.

In his piece to members, the housing minister stresses more than once that landlords will still be able to regain their properties quickly when necessary and that the courts can cope. Time will tell.

In the meantime, it is essential we and the Government actively monitor implementation and consider litigation and the impact of case law as parts of the Act are tested in court.

This can then be used to hold the Government to account.

What happens next?

Now that the new rules have come in, the first thing to do, if you haven’t already is to serve the Government information sheet to your existing tenants before 31^st May.

You may be sick of the constant reminders, but if you don’t serve this mandatory paperwork, you could be facing a £7,000 fine. If you become a repeat offender that could rise to £40,000, so it makes sense to take action now.

Remember your tenants will not need to sign new tenancy agreements.  However, almost all new tenancies that you enter into now will require an assured periodic tenancy agreement.  

We have all the new documents you will need in our new landlord starter pack and we also have  a downloadable start of tenancy checklist, which will help you ensure you have met your obligations and, importantly, secure a signed record from your tenants confirming that you have done so.

What about the other parts of the Act?

Of course, there is more to the Act that the changes to tenancies, with two additional phases to come.  

Phase two, which we have been told will be introduced later this year will bring in:

• A Private Landlord Ombudsman – an independent service aiming to resolve landlord and tenant disputes without the need to go to court. 
• A Private Rented Sector Database – with a requirement that all landlords and properties need to be registered. This will be rolled out in two stages, with deadlines staggered throughout the later part of the year.

Phase three of the plans will take longer as its provisions require public consultations. These include: 

• A new Decent Homes Standard for the private rented sector (PRS) – including a revised Housing Health and Safety Rating System (HSSRS) to assess risks in properties. 
• The extension of Awaab’s Law to the PRS – introducing strict requirements on timescales for dealing with hazards such as damp and mould. 

No timescales have been given for these changes, so keep an eye on our news site and social media channels for updates as we get them. 

While the legislation primary affects the PRS in England, some elements will also apply in Wales, something you can read more about here. 

How we can help you

This is a huge piece of legislation which will have a major impact on the way we all do business, which is why there is no better time to be a member of the NRLA.

We have a comprehensive list of documents, guides and other tools to help you navigate the changes up ahead. 

You can check out our Renters’ Rights Act Hub for guidance on what you can do to prepare now and join one of our exclusive member webinars allowing you to ask questions of our experts.

We also offer a range of affordable training options, with a number of eLearning and eClassroom options available. Click here for more details and an up-to-date list.  

We also have our Navigator tool, offering you your personalised "to-do list” tailored to your needs, which can be accessed here. 

With compliance taking centre stage there is no better time to take advantage of our compliance arm Safe2 and property management platform Portfolio. Safe2 can organise inspection repairs and safety certificates at the click of a button. Portfolio, which can be accessed via your NRLA account, includes a secure space store all your certificates and documentation, vital when it comes to meeting your new obligations.   

Make no doubt about it,  these are major changes to the way we do business, but rest assured we have everything you need to navigate the road ahead and survive and thrive in the new legislative landscape.