Zoe Taylor, solicitor in our land and property dispute resolution team, looks at what the return of the Renters’ Reform Bill means for landlords and tenants as it makes its way through Parliament.
What’s the latest?
After a lengthy delay in the House of Lords, the Renters’ Reform Bill has now returned to the House of Commons.
The housing minister has rejected the majority of the Lords’ proposed amendments signalling the government’s intention to press ahead and secure Royal Assent by the end of this year.
For landlords, the political debate is less important than the Bill’s impact. It represents the most significant reform of the private rented sector in over 30 years, with major legal and financial consequences.
Legal and financial implications
The abolition of Section 21 will be one of the most significant changes. Landlords will no longer be able to serve no-fault eviction notices and will instead need to rely on Section 8 grounds.
This shift is likely to make possession claims slower and more costly, with greater evidential requirements and court involvement. Delays in recovering possession will increase the financial exposure to rent arrears and void periods.
Rent increases will also become more controlled. The Bill limits rent reviews to once annually through a Section 13 notice, with tenants entitled to challenge any increase before the First-tier Tribunal.
While the tribunal cannot raise rents beyond what the landlord has proposed, it can reduce them, creating a form of rent suppression that may prevent landlords from keeping pace with market values.
Landlords will also face new compliance obligations.
Membership of the Private Rented Sector Database and the Landlord Ombudsman will be mandatory, with annual fees payable for both. Failure to comply will not only risk significant financial penalties but could also prevent landlords from enforcing possession claims. These compliance costs will represent a new, fixed burden on rental income.
For those letting to students and in HMOs, the shift away from fixed terms towards rolling periodic agreements presents particular challenges. Although the Bill introduces a new possession ground for student tenancies, it is tightly defined and subject to strict timing rules.
This could lead to greater uncertainty over tenancy length, increased turnover and potential council tax liability during vacant period.
In addition, the extension of the Decent Homes Standard to the private rented sector will require properties to meet more stringent requirements around repair, facilities, and hazard prevention. For some properties, this may mean investing in significant upgrades to remain compliant.
Finally, the Bill introduces a statutory right for tenants to keep pets unless a landlord has a reasonable ground to refuse, this can be challenged through the Ombudsman.
Although an additional deposit of up to three weeks’ rent may be allowed, this is unlikely to cover the potential increase in maintenance and insurance costs associated with pet ownership.
What landlords should do now
Royal Assent is not expected until late-2025, with implementation likely in 2026 however, landlords should take steps now to protect their position.
Reviewing tenancy agreements to remove reliance on Section 21, ensuring compliance with existing statutory requirements, and maintaining comprehensive records will be crucial in preparing for the new regime.
Financial planning should account for new registration fees, longer voids, and more limited rent increases, while landlords of older properties should consider whether investment or disposal is the more commercially viable option.
Although the abolition of Section 21 may be phased, landlords should not delay if considering possession. Acting under the current regime, where appropriate, may help avoid the evidential hurdles, delays, and costs associated with it.
Under the new framework, landlords and managing agents will need to proactively manage portfolios, identify breaches early, and maintain clear records to support any possession claims. Efficient management will be key to acting lawfully and effectively.
For student landlords, the shift to periodic tenancies will likely disrupt advance rent arrangements, with implications for tenancy cycles, cash flow, and council tax liability. Early planning is essential to mitigate these risks.
Above all, landlords should seek specialist legal and management advice at an early stage, ensuring they are equipped to navigate the new compliance framework and mitigate the financial risks of reform.
If you require any further information, please do not hesitate to contact Zoe Taylor or Grant Redburn in our land & property dispute resolution team on 01772 258321.