This week, Rishi Sunak announced that a General Election will be held on July 4th, 2024. As a result, MPs will not meet in parliament after this week until the election is over.
Some bills, like the Leasehold and Freehold Reform Bill, are being debated before Parliament takes a break. But the Renters Reform Bill is not on the schedule to be discussed, meaning it will not become law anytime soon.
It was back in 2019 when it was first promised by Theresa May, then Prime Minister. Now five years later, it’s still the subject of heated debate.
The Renters Reform Bill in short
The original intention was for the Renters Reform Bill to centre around scrapping Section 21 eviction powers for landlords. So-called ‘no fault’ evictions. These occur at the convenience and timing of the landlord, not the tenant, who then has two months to find somewhere else to live.
Most people regarded this kind of eviction as unfair. So when the Bill was eventually introduced into Parliament last May it included a ban plus other measures.
These included making it mandatory for landlords to join an Ombudsman scheme to arbitrate on disputes; controlling unreasonable rent rises through a tribunal; making it easier for tenants to keep pets; creating an online national register of landlords; and beefing up ‘possession powers’ making it easier for landlords to recover their property if a tenant showed significant anti-social behaviour or repeatedly ran up rent arrears.
Parallel to this, but not originally in the Bill, the UK Government is planning a Decent Homes Standard for private rental properties, to ensure they are safe and good quality.
Why the delay?
A Bill like this normally passes through the Commons and the Lords in well under a year. But the Commons is still debating it 11 months after its introduction. It hasn’t even reached the Lords yet!
That’s because the Bill was considered by landlords, letting agents and various property industry bodies to be too ‘pro-renter’. Although many reluctantly accept Section 21 has to go, industry insiders feel the total package adds too much cost and paperwork.
The Renters Reform Bill has been blamed for driving some landlords to sell up. Thus reducing rental stock and indirectly leading to higher rents as tenants compete for fewer homes.
There’s some evidence to back this up. Lettings agency figures suggest around 10 per cent of private rental properties have disappeared over the past two years ago. Although some have gone because landlords could not afford higher interest rates.
As a result of heated discussions between landlord and tenant groups, often played out in the media, the UK Government has now introduced amendments to change the Renters Reform Bill.
These will be the focus of debate over the coming months.
The Renters Reform Bill amendments
Many are quite detailed but the most significant are:
- Section 21 will be abolished, but only when the court system clears backlogs and improves the speed of dealing with evictions triggered by tenant anti-social behaviour and the like. There’s no timetable for this;
- Review the current patchwork of local council landlord licensing schemes, which are inconsistent and may overlap with the national register created by the Bill;
- A four-month protected period for all new tenancies before a tenant can put in two months’ notice to leave.
Propertymark’s thoughts
Move iQ is a strong supporter of Propertymark, which is the main letting agents’ trade body with well-respected qualifications for these experts who deal with both landlords and tenants day in, and day out. So, it’s worth considering what they have to say.
Propertymark pledges that whatever new rules eventually pass into law. It is on hand to help everyone understand the changes: most landlords aren’t doing it full time and work alongside their commitments as a landlord. So detailed legislation can be difficult to understand and stay on top off.
In particular the new possession grounds for eviction and the proposed Decent Homes Standard. Both of which landlords must stick to rigidly when they become law – promise to be highly complex. Professional Propertymark agents can help navigate this maze.
In other words, although the Bill – whatever form it takes – is likely to revolutionise the rental sector, landlords and tenants can always check with an agent if one has been hired to manage the tenancy.
What happens now with the Renters Reform Bill?
The Bill’s passage through the Commons isn’t yet over and discussions over the key amendments I’ve outlined will occupy MPs’ time in the coming weeks.
Once that hurdle has been passed (and it may involve compromises and further revisions) the amended Renters Reform Bill then moves to the House of Lords.
We’ve seen from other controversial measures that ‘Parliamentary Ping Pong’ could take place. The Lords making changes to the Bill which the Commons does not like. So forcing the measure to be batted between the two houses for weeks on end.
So, it’s possible that the measure could still take many months to be finished. Especially factoring in the lengthy Parliamentary summer recess.
The elephant in the room
While the details of the Bill are being discussed by different groups, often loudly, there’s another factor to consider. With a General Election happening and the Bill not yet passed, it could fall completely. Whichever party wins the vote will have to start all over again.
Labour has made it clear it would like a beefed-up version of the Bill. And may short-circuit the process by scrapping Section 21 within days of taking office using delegated powers. Although all other reforms would require more lengthy Parliamentary scrutiny.
The bigger picture
Although it’s difficult to describe the arguments and delays as anything other than a mess. It’s important not to lose sight of the bigger picture.
Almost certainly, whatever form the Renters Reform Bill finally takes when it becomes law – either side of an election – it will be a radical shake-up of private renting.
I’ll update you again when this long saga looks like it’s reaching a conclusion.
If you haven’t subscribed yet and want to stay informed on this or any other topics related to renting, be sure to sign up for the newsletter.
Last Updated: June 26th, 2024
