Date confirmed for final stage of Renters’ Rights Bill debates

The final stage of parliamentary debates for the Renters’ Rights Bill will begin from 8th September. For landlords unclear on what is currently ahead, agent professional body, Propertymark, has summarised the key changes.

The summer recess ended on 1st September and the Bill is no longer being debated in the House of Lords. Per standard procedure, it will be bounced back to the House of Commons for a last round of debates and amendments, before it is given final approval and ascended into law.

Commons consensus

An end date for the final debate is not yet clear, as any final amendments have to be agreed by both the Commons and the Lords, which can end up with a lot of to and fro.

However, with such a significant majority of House of Commons seats belonging to Labour – 411 out of 650 – it is expected they will steer the outcomes in a lot of areas.

The government has been eager to complete each stage as quickly as possible, and now there is only one hurdle left to clear before the finish line. On orders of the Chief Whip, House of Lords peers worked through the night to get the Bill through the committee stages back in May.

It remains to be seen how MPs in the Commons will respond to the amendments proposed in the House of Lords, such as the compromise to allow private landlords the option to take a ‘pet deposit’ worth three weeks’ rent in lieu of a pet insurance guarantee. 

Another Lords amendment reduces the amount of time that private landlords have to wait to re-let their properties after they are vacated.

These compromises may not make it through the Commons, but there was strong cross-party support for them in the House of Lords, which should count for something.

What changes will the Renter’s Rights Bill bring?

With the Bill fast approaching its conclusion, Propertymark highlighted the most important factors on the table that are likely to see changes, summarised below:

Tenancy reforms

Labour want to push towards periodic tenancies, and the switch will occur in a single stage. At the moment, tenancies are either Assured Shorthold or Assured, with the ability for the landlord to end a tenancy using a Section 21 “no fault” eviction process.

Section 21 evictions will be abolished and all existing tenancies will convert to periodic tenancies – one where the agreement runs on a repeating cycle with no end date. The tenant can leave at any time with notice. But if a tenant refuses to leave, after having been given notice as a result of specific legal grounds, court action will be required.

The Section 8 eviction process involves both mandatory grounds where, if proven, the court must agree possession for the landlord. For example, rent arrears, or the landlord needing to move back in to the property. It also encompasses discretionary grounds, where the court can decide whether or not to grant possession, this can be things like, persistent delays in paying rent, property damage by the tenant. 

Student accommodation

As of now, tenancies for purpose built student accommodation (PBSA) operate with fixed terms. Student let HMOs typically operate with a standard Assured Shorthold tenancy.

The terms of the Renter’s Rights Bill propose that PBSAs will need to be part of a recognised scheme to avoid the switch to periodic tenancies, so that fixed terms can keep being used. Student let HMOs are intended to get a new mandatory possession Ground 4A, to allow them to re-let to full-time students as long as advance written notice has been given.

Advance rent

At present there is no cap on the amount of rent a landlord can take in advance as mitigation of risk where a tenant has limited references. It is proposed that advance rent will be capped to one month, with no exceptions.

Rental bidding

There are no restrictions on landlords or letting agents accepting offers above the asking rent on a rental at present, but the bill proposes to stop higher rental offers being accepted.

Revised possession grounds

The grounds for eviction under Section 8 are subject various changes. Most notably, longer notice periods are being introduced. Where previously notice periods were between 2 weeks to 2 months, depending on the Ground, it is proposed that they will be extended to between 4 weeks and 4 months under the bill. 

A new law will stop landlords re-letting property within either 6 or 12 months, where possession has been gained under Ground 1 (to move back into the property) or 1A (to sell the property).

Rent reviews and appeals

At present there is no formal process for increasing rent, they are put in place using a Section 13 notice. The tenant has the option to appeal via a tribunal. In future it has been put forward that the government would issue a standard form to pursue a rent increase, and a standardised tribunal process would be laid out. Increases could only be made once per year, according to the bill.

Landlord Ombudsman for PRS

Currently only letting agents have to join an Ombudsman scheme, but the bill proposes that all landlords will have to join one, regardless of whether they use an agent. The Ombudsman is intended to help tenants by requiring landlords to provide information, take remedial action and/or pay compensation to tenants. 

Local councils are intended to be given rights to take action against landlords who fail to join the Ombudsman service or letting agents who let property for a landlord who is not signed up.

PRS database

The bill proposes that a new national database be put in place. It is intended that all landlords operating assured or regulated tenancies will have to register (whether or not they use a letting agent). The ability to evict will rely on registration (except under Ground 7A and 14 which relate to anti-social behaviour). Stevenagereading

Decent Homes Standard and Awaab’s Law

Awaab’s Law is already in place in the social sector, and it has been proposed that it is rolled out into the PRS. It would require landlords to fix hazards within a rental property within a given time period. Propertymark has highlighted that this aspect of the bill is being consulted on separately, with a target implementation date of 2035 or 2037.

As a mortgage broker, Commercial Trust cannot give advice on legal matters, and until the bill is finalised there are still opportunities for changes to the bill, but we will certainly be watching its progress closely and will share further updates as and when they come through.