New No-Fault Eviction Ban Law Explained

The ban on no-fault evictions will soon become law despite the Renters' Rights Bill remaining stuck in Parliamentary limbo.

The Lords and MPs are ping-ponging the final wording of amendments to the rules between each other, which means the final bill is unlikely to obtain Royal Assent before the end of the party conference season.

The annual round of conferences ends for the main parties on October 8.

The main framework of the bill is likely to go live straight away, although the government has indicated a two-month grace period to enable landlords to understand and implement some of the changes.

Abolition of Section 21

Besides measures to stop landlords from discriminating against tenants on benefits or who have children or pets, the big change is the abolition of Section 21 no-fault evictions in England.

When the bill becomes law, fixed-term assured shorthold tenancies automatically become periodic tenancies with no fixed end.

New tenants are granted a 12-month protected period, which stops landlords from selling or moving into the home. After the initial period, the landlord must give four months' notice to quit, although different rules apply if the rent is in arrears or the tenant behaves badly.

The new rules also govern how rents rise and how they are advertised to prospective tenants.

The bill will allow landlords to hike rents once a year at the market rate.

Single parents likely to benefit

Single parents are likely to benefit greatly from the new bill. No current rules stop landlords from refusing to let homes to prospective tenants on benefits or single parents with children, but many struggle to find a home to rent.

The new rules will stop landlords from imposing bans on these tenants.

Pets are not forgotten under the new rules. Tenants will have the right to keep a pet, but landlords cannot charge a fee or demand the tenant take out pet insurance to guard against damage.

Housing minister Matt Pennycook swept away amendments from the Lords supporting pet insurance, arguing the cost is covered by a security deposit lodged by the tenant.

Scared landlords selling up

Landlords fearing the new laws will make buy-to-let unworkable are anecdotally selling up.

The rumours may be true, but to a lesser extent than publicised.

A year ago, the Property Franchise Group, owner of many property brands like Hunters, Fine & Country and EweMove, managed 153,000 rental homes for landlords, but that has fallen to 150,000.

If the same 2 per cent drop applies across England's estimated 2.32 million landlords, that's a significant 46,400 landlords leaving the market. Most will own up to three buy-to-let homes.

The exodus will leave even fewer homes to rent in a market already suffering a lack of supply, which is likely to fuel even more increases to rents that are already unaffordable for many.