Renters’ Rights Bill 2024: Key Reforms Explained
The Renters' Rights Bill 2024 brings significant changes that will impact how landlords and letting agents operate in the private rented sector (PRS). The Bill introduces a new structure for tenancy agreements, rent increases, and possession grounds. Understanding the legal implications of these changes is essential for landlords and agents to remain compliant while managing their properties effectively.
Here, we thoroughly analyse the fundamental changes introduced by the Renters' Rights Bill 2024, focusing on what private landlords and agents need to know.
We have also added an article about lesser published points about the bill.
Key Legal Reforms for Landlords
The Renters' Rights Bill 2024 introduces a series of legal reforms landlords must navigate. These include removing Section 21 evictions, introducing periodic tenancies, and new rules on rent increases and grounds for possession. Also, landlords will be subject to a Private Rented Sector Database and an Ombudsman scheme, increasing regulatory oversight and the need for compliance.
Periodic Tenancies: End of Fixed-Term Agreements
The Bill replaces fixed-term tenancies with periodic tenancies, meaning all tenancies will now roll continuously. Landlords will no longer have the option to offer six or twelve-month fixed terms. Instead, tenancies will automatically renew each month unless the landlord or tenant gives notice.
Key Points for Landlords:
- No more fixed-term contracts: All tenancies will become periodic by default.
- Maximum monthly: All periodic tenancies must be monthly or 28 days or less (e.g. weekly). Any period above monthly will be banned and default to monthly if incorporated.
- Two months' notice from tenants: Tenants must give two months' notice to leave the property unless a lesser time has been agreed upon.
- Existing tenancies: Existing tenancies at the start of the act will convert to periodic at commencement.
Rent Increases: New Legal Requirements
The Renters' Rights Bill standardises the process for rent increases. Landlords will now only be able to increase rents once per year using a Section 13 notice, with at least two months’ notice before the new rent takes effect.
Key Points for Landlords:
- Annual rent increases only: Rent can only be increased once per year and only via a Section 13 notice. This means rent review clauses in tenancy agreements will no longer be valid.
- Market rate requirement: The new rent must reflect market rates (no rent control). If the tenant challenges the increase, it will be up to the First-tier Tribunal to determine whether the new rent is an open market rent.
- No rent backdating: Any rent increase will take effect from the date of the tribunal decision if the tenant challenges it.
These changes provide a clear legal framework for rent increases, allowing landlords to adjust rents annually in line with the market, provided they adhere to the formal notice and process requirements.
Grounds for Possession: Expanded and Clarified
With the abolition of Section 21, landlords will now need to rely solely on Section 8 grounds for possession. The Bill modifies and expands the list of grounds on which a landlord can regain possession of their property, including new mandatory and discretionary grounds.
Landlords can still seek possession for reasons such as non-payment of rent, anti-social behaviour, or if they wish to move in or sell the property. Below is a breakdown of the updated grounds for possession:
| Ground | Summary | Notice period | |
|---|---|---|---|
| Mandatory grounds | |||
| 1 | Occupation by landlord or family | The landlord or their close family member wishes to move into the property. Cannot be used for the first 12 months of a new tenancy. | 4 months |
| 1A | Sale of dwelling-house | The landlord wishes to sell the property. Cannot be used for the first 12 months of a new tenancy. | 4 months |
| 1B | Sale of dwelling-house under rent-to-buy | The landlord is a private registered provider of social housing and the tenancy is under a rent-to-buy agreement. | 4 months |
| 2 | Sale by mortgagee | The property is subject to a mortgage and the lender exercises a power of sale requiring vacant possession. | 4 months |
| 2ZA | Possession when superior lease ends | The landlord's lease is under a superior tenancy that is ending. Can only be used by private registered providers of social housing, agricultural landlords, a person who held the dwelling for the purposes of making it supported accommodation or a company majority owned by a local authority. | 4 months |
| 2ZB | Possession when superior lease ends | The landlord's lease is under a superior tenancy that is coming to an end or has ended. Can only be used if the superior lease was for a fixed term of over 21 years. | 4 months |
| 2ZC | Possession by superior landlord | After a superior tenancy ends, the superior landlord becomes the tenant's direct landlord and seeks to take possession. Can only be used where the intermediate landlord prior to reversion was a private registered provider of social housing, agricultural landlord, a person who held the dwelling for the purposes of making it supported accommodation or a company majority owned by a local authority. | 4 months |
| 2ZD | Possession by superior landlord | After a superior tenancy ends, the superior landlord becomes the tenant's direct landlord and seeks to take possession. Can only be used where the superior lease was for a fixed period of over 21 years and has expired, or within a 12-month period of the fixed term expiry date, if the fixed term has been ended early. Or if the superior tenancy comes to an end after the expiry of the fixed term as a result of a valid notice. | 4 months |
| 4 | Student accommodation | In the 12 months prior to the start of the tenancy, the property was let to students. Can only be used by specified educational establishments. | 2 weeks |
| 4A | Properties rented to students for occupation by new students | A property is let to full-time students and is required for a new group of students in line with the academic year. | 4 months |
| 5 | Ministers of religion | The property is held for use by a minister of religion to perform the duties of their office and is required for occupation by a minister of religion. | 2 months |
| 5A | Occupation by agricultural worker | The landlord requires possession to house someone who will be employed by them as an agricultural worker. | 2 months |
| 5B | Occupation by person who meets employment requirements | A private registered provider of social housing holds the property for use by tenants meeting requirements connected with their employment and it is required for that purpose (and the current tenant does not fulfil those requirements). | 2 months |
| 5C | End of employment by the landlord | Previously ground 16 (expanded). The dwelling was let as a result of the tenant's employment by the landlord and the employment has come to an end OR the tenancy was not meant to last the duration of the employment and the dwelling is required by a new employee. | 2 months |
| 5D | End of employment requirements | A private registered provider of social housing, included an employment requirement in the tenancy agreement that the tenant no longer fulfils (e.g., key worker). | 2 months |
| 5E | Occupation as supported accommodation | The property is held for use as supported accommodation and the current tenant did not enter the tenancy for the purpose of receiving care, support or supervision. | 4 weeks |
| 5F | Dwelling-house occupied as supported accommodation | The tenancy is for supported accommodation and one of the circumstances set out in the ground, making the accommodation no longer viable or suitable for that tenant, has occurred. | 4 weeks |
| 5G | Tenancy granted for homelessness duty | The property has been used as temporary accommodation for a homeless household, under s193 of the Housing Act 1996, and a local housing authority has notified the landlord that the tenancy is no longer required for that purpose. The landlord can only use this ground if within 12 months of the date of the notice from the local housing authority. | 4 weeks |
| 5H | Occupation as 'stepping stone accommodation' | A registered provider of social housing or a charity lets to a tenant meeting eligibility criteria (e.g., under a certain age) at "affordable rent", to help them access the private rented sector and/or transition to living independently, and the tenant no longer meets the eligibility criteria, or a limited period has come to an end. | 2 months |
| 6 | Redevelopment | The landlord wishes to demolish or substantially redevelop the property which cannot be done with the tenant in situ. Various time limits and/or notice requirements exist for this ground depending on the circumstances. The landlord and tenancy must be of the kind listed in the table. | 4 months |
| 6A | Compliance with enforcement action | The landlord is subject to enforcement action and needs to regain possession to become compliant. | 4 months |
| 7 | Death of tenant | The tenancy was passed on by will or intestacy. Possession proceedings must begin no later than 12 months after death or, if the court directs, after the date on which the landlord became aware of the death. | 2 months |
| 7A | Severe ASB/Criminal Behaviour | The tenant has been convicted of a type of offence listed in the ground, has breached a relevant order put in place to prevent anti-social behaviour or there is a closure order in place prohibiting access for a continuous period of more than 48 hours. | Landlords can begin proceedings immediately |
| 7B | No right to rent | At least one of the tenants has no right to rent under immigration law as a result of their immigration status and the Secretary of State has given notice to the landlord of this. | 2 weeks |
| 8 | Rent arrears | The tenant has at least 3 months' (or 13 weeks' if rent is paid weekly or fortnightly) rent arrears both at the time notice is served and at the time of the possession hearing. | 4 weeks |
| Discretionary grounds | |||
| 9 | Suitable alternative accommodation | Suitable alternative accommodation is available for the tenant | 2 months |
| 10 | Any rent arrears | The tenant is in any amount of arrears | 4 weeks |
| 11 | Persistent arrears | The tenant has persistently delayed paying their rent | 4 weeks |
| 12 | Breach of tenancy | The tenant is guilty of breaching one of the terms of their tenancy agreement (other than the paying of rent) | 2 weeks |
| 13 | Deterioration of property | The tenant has caused the condition of the property to deteriorate | 2 weeks |
| 14 | Anti-social behaviour | The tenant or anyone living in or visiting the property has been guilty of behaviour causing, or likely to cause, nuisance or annoyance to the landlord, a person employed in connection with housing management functions, or anyone living in, visiting or in the locality of the property. Or the tenant or a person living or visiting the property has been convicted of using the premises for illegal/immoral purposes, or has been convicted of an indictable offence in the locality | Landlords can begin proceedings immediately |
| 14A | Domestic Abuse | A social landlord wishes to evict the perpetrator of domestic violence if the partner has fled and is unlikely to return | 2 weeks |
| 14ZA | Rioting | The tenant or another adult living at the property has been convicted of an indictable offence which took place at a riot in the UK | 2 weeks |
| 15 | Deterioration of furniture | The tenant has caused the condition of the furniture to deteriorate | 2 weeks |
| 17 | False statement | The tenancy was granted due to a false statement made knowingly or recklessly by the tenant or someone acting on their instigation | 2 weeks |
| 18 | Supported accommodation | The tenancy is for supported accommodation and the tenant is refusing to engage with the support | 4 weeks |
New and Amended Grounds for Possession
Although Section 21 evictions are abolished, landlords can still regain possession of their property by relying on Section 8 grounds. The Renters’ Rights Bill introduces new grounds for possession and amendments to existing ones to ensure landlords can recover their property when necessary.
Moving in or selling: If the landlord or a close family member intends to move into the property, or if the landlord is selling, possession can be sought, but only after the tenant has been in the property for at least 12 months. The notice period for grounds 1 and 1A will be four months. It will be an offence to use specified grounds, including these falsely.
Anti-social behaviour and significant arrears: For more severe breaches of tenancy, such as anti-social behaviour or significant rent arrears (now defined as three months’ unpaid rent), landlords can seek possession anytime. This ensures that landlords can take swift action to remove problematic tenants.
Mandatory rent arrears grounds: Landlords can seek possession if a tenant accrues three months of arrears (an increase from the previous threshold of 2 months). The notice period has also been extended to 4 weeks. However, landlords can still rely on discretionary grounds (such as persistent late payments) for regaining possession when rent arrears do not reach the 3-month threshold, but the court will consider whether eviction is reasonable in such cases.
The Private Rented Sector Landlord Ombudsman
A significant introduction under the Renters’ Rights Bill is the creation of a Private Rented Sector Landlord Ombudsman. All landlords will be required to register with this ombudsman service, which will handle tenant complaints and disputes without needing court action. The service is designed to provide tenants with a free, impartial, and legally binding resolution to their complaints.
This service offers landlords a structured and cost-effective method for resolving disputes. Failing to register with the ombudsman could result in fines of up to £7,000, and repeated offences may lead to more severe penalties or even criminal prosecution.
The Private Rented Sector Database
Introducing a Private Rented Sector Database will be an essential tool for landlords and local authorities. All landlords will be required to register themselves and their properties on this database. Landlords who fail to register on the database may face penalties of up to £7,000, and properties will not be eligible for possession proceedings unless correctly registered.
Prohibition of Rental Discrimination
The Renters’ Rights Bill makes it illegal for landlords and letting agents to discriminate against potential tenants based on whether they receive housing benefits (often referred to as “No DSS”) or have children. The bill aims to make renting fairer and more inclusive, ensuring all applicants are treated equally based on their ability to maintain the tenancy rather than arbitrary personal circumstances.
Landlords can still conduct affordability checks but must not refuse applicants solely because they receive benefits or have children. Breaches of these provisions could result in civil penalties.
Ban on Rental Bidding
The practice of rental bidding, where prospective tenants are encouraged or pressured to offer more than the advertised rent, will be outlawed. Landlords and agents must advertise a set rental price and are prohibited from accepting offers above this rate.
Local councils will have enforcement powers, with penalties of up to £7,000 for non-compliance.
Renting with Pets
The bill also introduces more flexibility for tenants wishing to keep pets in rented properties. Landlords must now consider requests for pets and cannot unreasonably refuse them. To address concerns over potential damage, landlords can require tenants to hold pet insurance, providing a safeguard against damage to the property.
Decent Homes Standard
The Decent Homes Standard will be applied to the private rented sector. This standard will set minimum requirements for property conditions, ensuring that all rental homes are safe, warm, and in good repair. Local authorities will be given new enforcement powers to ensure compliance with these standards, and landlords who fail to meet the requirements may face fines or prosecution.
Awaab’s Law: Addressing Serious Housing Hazards
Following the tragic death of Awaab Ishak due to prolonged exposure to mould in his home, the Renters’ Rights Bill includes provisions to extend Awaab’s Law to the private rented sector. This law will require landlords to address serious hazards, such as damp and mould, within a specified timeframe.
Failure to comply with these regulations could lead to court action, where landlords may be ordered to take remedial action and potentially compensate affected tenants.
Enforcement and Investigatory Powers
Local authorities will receive enhanced enforcement and investigatory powers to ensure compliance with these new rules. Councils will be able to issue civil penalties of up to £7,000 for initial breaches, with repeat offenders facing fines of up to £40,000 or even criminal prosecution.
New investigatory powers will allow councils to demand information from landlords and other relevant parties to support enforcement efforts. This will make it easier for authorities to identify non-compliant landlords and take action to improve housing standards.
Conclusion
The Renters' Rights Bill 2024 significantly reshapes the legal framework of the private rented sector in England. For landlords and letting agents, these changes mean a more regulated environment, requiring close attention to tenancy management, compliance with new rent increase procedures, and registration with the database and ombudsman.
The changes outlined in this article will likely alter over time, although the general principle of each item will remain. The Guild of Residential Landlords will update subscribers as the Bill progresses.
The government has published guidance about the Bill.
Check out our article about some lesser known points about the bill.
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