Renters' Rights Bill passes second reading in the House of Lords
The Renters’ Rights Bill reached a pivotal stage on February 4th 2025, with its second reading in the House of Lords. Here’s a concise summary and analysis of the key points:
Exemptions for Student Tenancies:
- Most of the Renters’ Rights Bill will not apply to purpose build student accommodation (PBSA) where the provider is a member of the Government approved Code; PBSA providers will let their rooms on common law tenancies rather than the assured tenancies that are covered by this Bill.
- It has also been suggested to extend exemptions to smaller landlords renting to students, currently the student ground for possession that has been suggested to be added to Section 8 only covers student properties that are also a HMO, when we know that many students wish to live in 1 or 2 bedroom properties too.
Concerns Over Legislative Process:
- Parliamentarians have questioned the speed of the legislation approval process and are concerned that insufficient time has been left for thorough due diligence leading to negative consequences for both the landlord and tenant.
Landlord Sector Impact:
- The increased legislation could lead to landlords exiting the market, further straining supply and demand. The new legislation involving multiple regulation changes will inevitably add costs for buy to let landlords.
Court Preparedness:
- There is massive concern about the time it’s commonly taking landlords to evict a tenant using the Section 8 route owing to the court backlog and the time it takes to appoint bailiffs. It can take over six months to evict a tenant.
Impact of Banning Bidding Laws:
- Although the intention is to curb unfair practices, the cause of this is supply and demand rather than being a deliberate practice by letting agents. The negative impact of this ban could mean an increase in asking rents as a response to the ban.
Pets in Rentals:
- This brings a host of challenges for property maintenance, tenant relationships, and building management. Although it is important to balance the benefits pet ownership brings such as being postive for mental health, it is important to ensure that pet damage insurance is covered when a tenant moves in. Landlords will be able to require a tenant has suitable insurance in place to cover any damage that the pet may cause to their property.
Local Council Capacity:
- The Renters Rights Bill is likely to significantly impact Local Councils by placing a greater responsibility on them to address housing issues related to tenant security and eviction prevention. It is doubtful that the councils have sufficient enforcement capabilities due to underfunding.
Ban on Up-Front Rent:
- Landlords typically ask for rent in advance from tenants who struggle to pass traditional affordability checks, such as those with low or unpredictable income, the self-employed, pensioners and foreign tenants who cannot provide a guarantor. The impact of removing upfront payments would therefore be most pronounced for lower-income tenants, many of whom currently rely on savings or guarantors to secure housing. These individuals would be left with no viable alternatives, effectively excluding them from the rental market and exacerbating the very issues the reforms seek to solve.
Lessons from Scotland:
- Learnings from the earlier abolition of Section 21 can be used as a template for the roll out in the rest of the UK. One of the key reasons for the successful implementation in Scotland is ample preparation for the change was allocated. Following the change in the law in Scotland the rights of landlords were strengthened including the notice period for the grounds for eviction were expanded to also include the landlords’ plans to sell or move into the property themselves. The example of Scotland has shown that landlords can adapt well to the changes in the law if they are given ample time to manage the changes.
Advocating for Landlords:
Our Lettings Director, Angharad Trueman, has been actively supporting landlords and recently met with her local MP, Alex McIntyre, to address concerns about the potential long-term impacts of key elements within the Bill.
Key Issues Discussed:
Loss of Fixed Terms:
- Concern: The removal of fixed-term tenancies could lead to instability in the lettings market.
- Action: Alex McIntyre committed to raising this issue with the Housing Minister Matthew Pennycook.
Lack of Court Reform:
- Concern: Introducing legislation without prior court reform may create challenges for landlords and tenants.
- Acknowledgement: The MP recognised that delays in court reform could negatively affect tenants as well.
Restrictions on Rent in Advance:
- Concern: Removing the ability to take rent in advance, particularly for students and overseas tenants, may limit landlords' ability to manage risk effectively and therefore reduce available housing options for this sector.
- Action: Alex McIntyre agreed to address this issue with the Housing Minister.
Implementation Timeline:
- Concern: Adequate lead time for training and preparation is essential for smooth implementation.
- Agreement: Both parties concurred that sufficient notice would benefit all stakeholders.
Moving Forward:
Angharad Trueman provided Alex McIntyre with a detailed position paper emphasising the importance of regulating letting agents as part of the Bill. The MP assured Angharad he would follow up on the issues raised and report back.
The committee stage will follow the second reading in around two weeks, where detailed line by line examination and discussion of amendments takes place. For further updates on the Bill please refer to the Government website.
Our Commitment:
Our commitment to advocating for landlords continues to thrive under the leadership of Angharad Trueman.
We will keep you updated on our progress as we strive for balanced legislation that ensures fair treatment for landlords and agents while protecting vulnerable tenants. Please do not hesitate to contact your local branch for any specific concerns about this upcoming legislation or concerns about your property.
