The UK rental market is set for some major changes with the introduction of new legislation, aiming to create a fairer and more transparent environment for both landlords and tenants. The Renters’ Reform Bill reforms will significantly alter the way rental agreements, evictions, and rent reviews are handled. If you’re a landlord, understanding these changes is crucial to staying compliant and avoiding penalties. Here’s a breakdown of the key updates:

Decent Homes Standard

A key element of the new legislation is the introduction of the Decent Homes Standard to the private rental sector. This means landlords will be legally required to ensure that their properties meet a minimum standard of safety, repair, and living conditions. Currently applied to social housing, this expansion aims to elevate living standards for private renters and hold landlords accountable for substandard housing. For more info on Decent Home Standard click here

The End of Section 21 (‘No-Fault’ Evictions)

One of the most significant changes is the end of Section 21 evictions. This will remove the ability for landlords to evict tenants without providing a valid reason. Going forward, all evictions will need to be justified using Section 8 grounds, which include issues such as rent arrears or antisocial behaviour. This shift will provide tenants with greater security and prevent arbitrary evictions.

New Tenancy Structure

The current fixed-term tenancy model will be replaced by a rolling assured periodic tenancy. Tenants will have the right to give two months’ notice to end a tenancy at any time, while landlords will need to follow stricter guidelines for terminating agreements. This change is designed to provide tenants with greater flexibility while ensuring landlords have clear grounds for possession.

Updated Section 8 Grounds

With the removal of Section 21, the grounds for eviction under Section 8 are being strengthened. Key changes include:

• Antisocial behaviour must be properly documented for it to be grounds for eviction.
• Landlords won’t be able to reclaim possession if they intend to sell within the first 12 months of a tenancy.
• If tenants are in arrears by three months or more, the notice period for eviction will be four-weeks instead of two.

Rent Reviews and Limitations

Rent increases will now be limited to once per year through a revised Section 13 process. Tenants will have the right to challenge rent increases more easily, and any increase must reflect the local market rate. Landlords will need to provide evidence to support proposed rent increases if challenged at a tribunal. Importantly, any agreed rent increase will not be backdated.

End of Bidding Wars

To prevent rental market inflation, bidding wars between tenants will be banned. Properties must be listed at a fair market rent—neither excessively high nor artificially low. This aims to create a more stable and predictable rental market.

Student Agreements

The new legislation will also affect student housing. Landlords of one- and two-bed shared student houses may find it harder to reclaim possession under the new rules, which aim to provide greater security for student tenants.

Ombudsman and Digital Portal

A new landlord ombudsman will be established to handle disputes between landlords and tenants. There will be a fee for landlords to register, which could become a new revenue stream for agents helping landlords with compliance.
Additionally, a digital property portal will be introduced, starting at a basic level and expanding over time. Landlords who fail to register could face fines, so it’s crucial to stay informed and comply with registration requirements.

Rent in Advance and Local Authority Enforcement

Local authorities will be given greater powers to enforce the new rules, including the ability to impose larger fines on non-compliant landlords. The legislation will also regulate the practice of asking for excessive rent in advance, protecting tenants from unfair financial demands. This is likely to have a significant knock-on effect by limiting options for low-income tenants or those coming from overseas who may have previously relied upon paying rent in advance.

Ban on Discrimination

Landlords will no longer be allowed to discriminate against tenants based on their family status, income source (such as benefits), or having children. This measure seeks to create a more inclusive and accessible rental market.

Energy Efficiency Requirements

The government is also pushing forward with the Minimum Energy Performance Bill, requiring rental properties to meet higher energy efficiency standards. Landlords will need to improve their properties’ energy ratings or face penalties, encouraging a shift toward more sustainable housing. Read related blog here

Market Confidence and Mortgage Rates

Despite the tightening regulations, market confidence appears to be returning. Rising rental yields against stable mortgage rates are encouraging signs for landlords considering long-term investment. However, landlords are advised to take decisive action now if they are considering serving a Section 21 notice before the grace period ends. Read related blog here

Next Steps for Landlords

These changes represent a significant shift in the UK rental market. Landlords should start preparing now by reviewing their tenancy agreements, ensuring properties meet the new standards, and staying informed about the rollout of the digital portal and ombudsman services.

The transition period will provide some breathing room, but taking action early will help both landlords and tenants adjust smoothly to the new legal landscape.