The Renters’ Rights Bill, recently announced by the Labour Government, introduces sweeping changes to the private rental sector in England. The Bill is not law yet as it needs to pass through parliament, still many landlords may feel apprehensive about these reforms. Yet it’s important to note that much of what the Bill introduces was going to introduced by the Tory’s earlier in the year (yet they ran out of time before the General Election).
Let’s explore the key points that North East landlords should be aware of and how they impact the sector.
Abolition of Section 21 ‘No-Fault’ Evictions
One of the central elements of the Renters’ Rights Bill is the abolition of Section 21 evictions, which have long allowed landlords to terminate a tenancy without providing a reason. This will be replaced with a system that only permits evictions under certain conditions, such as rent arrears or the landlord wishing to sell the property. While this may initially seem restrictive, it has been on the horizon for a while, and we’ve discussed the limited potential impact in previous articles.
With this change, North East landlords will need to follow stricter legal grounds for eviction, ensuring that tenants are not unfairly displaced. Importantly, North East landlords will still be able to regain possession of their properties if they meet the new grounds, such as the need to sell or move into the property themselves.
Rent Increases and Bidding Wars
Rent control mechanisms in the Bill aim to standardise rent increases across the board. Landlords will only be able to raise rents once per year, and tenants will be empowered to challenge excessive increases at a tribunal. The goal here is to prevent unfair rent hikes being used as a backdoor eviction tool. However, North East landlords will still be free to increase rent in line with market rates.
Another significant change is the prohibition of bidding wars. In recent years, some landlords have used the housing crisis to encourage tenants to bid higher than the advertised rent. Under the Renters’ Rights Bill, this practice will be outlawed. Letting agents and landlords must now publish a clear asking price for a rental property and cannot accept bids above this rate. While this change may seem drastic, we’ve anticipated it in previous discussions about maintaining transparency and fairness in the market.
Decent Homes Standard and Awaab’s Law
The introduction of the Decent Homes Standard to the private rental sector aims to ensure that all privately rented properties meet minimum safety and quality standards. North East Landlords will need to comply with these standards or face penalties. This is an expansion of the existing standards applied to social housing, ensuring that tenants in the private sector are entitled to the same level of safety and decency in their homes.
Awaab’s Law, named after the tragic case of a child who died from exposure to mould in social housing, will also be extended to the private sector. This places a legal requirement on landlords to address serious health hazards, such as damp and mould, within a specified time frame. While this might seem like a significant regulatory burden, many North East landlords already maintain high standards, and those who do should find compliance relatively straightforward.
Renting with Pets
Another headline from the Renters’ Rights Bill is the enhanced ability for tenants to keep pets. Landlords will no longer be able to refuse pet requests without reasonable grounds. However, to address concerns about potential damage, landlords can now require pet insurance to cover any issues. We’ve touched on this topic before, and it’s no surprise that pet ownership is becoming a more pressing issue for tenants. With insurance in place, this change can benefit both parties.
Strengthened Local Authority Powers
Local councils will be granted additional powers to enforce the rules laid out in the Bill. This includes the ability to levy fines of up to £7,000 for initial breaches, escalating to £40,000 for repeat offences. While these new enforcement powers may appear daunting, they are largely targeted at rogue landlords, and those who already comply with existing regulations will likely not be affected.
Still have Questions?
As your trusted property agent in Sunderland and the North East I understand that these new regulations could feel overwhelming, but much of it has already been signalled in earlier discussions. If you have any concerns about how the Renters’ Rights Bill will affect you as a North East landlord, particularly considering the recent changes, feel free to reach out to me on 0191 486 2678 Let’s work through any worries together and ensure that you remain compliant while continuing to offer great service to your tenants.
If you would like a copy of the full Bill, please do DM me for a link.
Together, we can make sure that your property investments continue to thrive under this new legal landscape.
