Following its initial reading earlier this month, the Labour governments revised, and newly titled ‘Renters Rights Bill’ (RRB) proposes significant reform within the private rental sector. The bill has some way to go before being committed to law and may yet see further amendments but is widely expected to come into effect by summer 2025.
While the bill provides added flexibility for tenants, Landlords will retain much needed protection around possession and annual rental increases. The bill is intended to ‘even the balance’ and is expected to encourage greater long-term security for both Tenants and Landlords.
As your trusted letting agent, JLL are already taking steps to prepare for this upcoming change and have successfully guided thousands of clients through previous legislative changes, most recently the Tenant Fee Ban (2015). We will work with you, ensuring that your needs are met every step of the way.
Below is the current timeline and summary of key changes that are expected. Further updates and advice will follow in due course as the bill works its way through the parliamentary process.
WILL IT AFFECT ALL RENTAL PROPERTIES?
The vast majority yes. Most Landlords rent to individuals and receive a rent of under £100,000 a year making their tenancy an Assured Shorthold (AST), so these changes will apply to most Landlords in England. Landlords renting to company Tenants or receiving rent exceeding £100,000 a year will continue to be exempt as the bill will not apply to company or contractual (Non AST) tenancies.
WHEN WILL THIS TAKE AFFECT?
Once the bill passes into law, it will be applied immediately to all new and existing tenancies, moving all tenancies to a rolling periodic structure straight away. It should be noted that existing tenancies with clauses for future rent increases and/or break clauses will become entirely void as the legislation will take precedent.
HOW LONG CAN MY TENANT(S) STAY IN MY PROPERTY?
As above, leases will no longer have a fixed end date and will roll over indefinitely until a valid notice is served by Landlord or a Tenant. Tenants will have a minimum twelve month protected period.
WHAT HAPPENS IF I NEED MY PROPERTY BACK?
Current Section 21 notices will no longer exist and will be replaced by an existing (evidence based) Section 8 notice framework. Landlords needing to sell or move themselves or their immediate family into a property, can do so under a newly extended notice period of four months servable eight months after the tenancy was first entered. Landlords must be prepared, and able, to provide evidence of their need for possession and will be prohibited from marketing their property for rent for twelve months from the date the notice expires. These requirements are intended to ensure notices that are served are legitimate. How such evidence might be called on or presented remains unclear at this time.
BREAK CLAUSES IN GENERAL
Tenants will be able to give Landlords two months’ notice at any point once they have moved in. Whilst not ideal the cost, time, and effort of moving home means few Tenants would have any interest relocating and would be expected to remain much as they do now, moving only when circumstance require change so Landlords should not be too concerned here.
In addition to the Landlord notice provisions above, a Landlord will be permitted to serve notice only in the event of a Tenant breaching their rental contract. A list of notices covering breaches can be viewed here.
RENTAL PAYMENTS AND ARREARS
All rent will be payable monthly only. Advance payments will be prohibited. JLLs due diligence and processes ensure 97% of all JLL client rental monies are received within three working days of due date.
Tenant arrears of three months will enable Landlords to serve notice of four weeks.
WHAT ABOUT STUDENTS AND OVERSEAS TENANTS?
The same applies. Despite it being widely accepted that the student market is higher risk, there is currently no exemption in the bill presently. Our ombudsman are actively seeking for this to be reviewed further but Landlords are currently advised to consider future rent protection insurance policies or guarantors for additional security and peace of mind.
ADVERTSING AND INCREASING RENTS
When marketing, Landlords will no longer be able to accept a rental offer or bid that exceeds the advertised property price.
Landlords will be able to propose market rent increases annually using a Section 13 notice, providing two months notice to Tenants. Tenants may challenge the increase via the First-Tier Tribunal Service (FTT), if they feel it exceeds market value.
The FTT are not able to increase the rent beyond the Landlords proposed amount but may rule a lower amount if deemed appropriate. The increased rent will be payable from the date of the ruling (or any date set by the FTT) and crucially, will not be backdated to the Section 13 expiry date. How long a ruling will take is not clear, but reports suggest it could be up to six months.
PETS
Landlords can no longer reasonably refuse pets but can require Tenants to acquire appropriate pet insurance.
PENALTIES AND FINES
Up to £7,000 for first time offences and £40,000 for repeat offences.
