UK Renters’ Rights Bill: The Day The World Changed

Labour promised change - and the proposed Renters Rights bill will certainly change the private rental sector.

In 1989, the 'Buy to Let' market was created with the introduction of the AST (Assured Shorthold Tenancy) which gave mortgage companies the confidence to lend as possession could be easily regained and properties valued and sold empty. This was driven by the need to create a private rental sector to balance the falling investment in social housing alongside loss of stock.

The 2025 Renters, Rights Bill will have a similar and equally drastic impact as it seeks to swing the balance back toward the pre-1989 era where a rented property was a tenant's home for as long as the tenant wanted it to be. As a landlord, you will have to adapt or, if you choose not to – you need to sell before the Bill becomes law next summer.

Sarah Goodwin, property professional and PDPLA committee member has been through the small print of the bill and explains what it all means… 

Short-Term Tenancies and Flexibility for Tenants

The proposed changes abolish assured shorthold tenancies, converting all to assured, and remove fixed terms making tenancies periodic from the outset with rental periods not to exceed one month. Simply offering a fixed term to a tenant after the legislation is passed could result in a fine of up to £7000. Tenants will be able to give notice the day after they move in and some landlords are concerned about the expense and inconvenience of having to re-let the property after such a short period. They could be further frustrated by those normally seeking temporary accommodation, such as contractors or those on extended holidays who typically would have stayed in an Airbnb or hotel taking up studios/HMO accommodation from those needing a home.

Existing Tenancies and the New System

One surprise in the proposed bill is the immediate conversion of all existing tenancies to the new system upon its introduction. This raises several questions about how certain aspects of tenancy law, old and new, will interact and be effectively managed so this area requires clarification.  

Section 8 Eviction Grounds and Notice Periods

One significant area of concern is the removal of Section 21, proposed changes to Section 8 eviction processes and the grounds for eviction, particularly regarding rent arrears. Various grounds will be added to Section 8 or amended, which will be looked at in more detail below, and Ground 3 for holiday lets is to be removed. Some of the restrictions on Section 21 evictions before possession can be granted, namely compliance with deposit protection regulations, will transfer over to section 8 (anti-social behaviour grounds excepted) alongside the need to have registered on the landlord database.

Worryingly, the government believes that the reforms will reduce the demand on the courts so they may not be adequately prepared. With the majority of Section 21s issued for a valid reason and used only because it's a less complicated system, therefore reducing costs such as solicitors' fees, there may be unacceptable delays for court hearings and considerable rental losses whilst simultaneously delaying any valid claims a tenant may have.

There are holes in the proposed grounds, some accidental perhaps and others clearly purposeful. For example, a landlord may need to change the use of a property from an HMO to a family let (a popular decision with many councils). Whether this is due to financial viability (as presently the case with smaller HMOs) or the additional management effort no longer tolerable, there is no obvious ground that applies meaning the landlord may be forced to wait until all tenants have left of their own free will (if they don't wish to sell) - some of our HMO tenants have been with us for 15+ years! Additionally, there do not appear to be any grounds that a general Rent-to-Rent operator can use to return the property back to the owner with vacant possession when their contract expires, although social housing providers who lease a property can, so the future looks a little bleak for such strategies. Further gaps will become apparent in due course.

Ground 8 – Rent Arrears

The bill suggests lengthening both the period of arrears required before a landlord can give notice to three months and extending the notice period to four weeks. It should be noted that the calculation of the three months arrears in court will discount any Universal Credit claim due to the tenant but not yet received – landlords will need to rely on their inbuilt powers of physic deduction to determine whether a benefits claim exists and in calculating the amount awarded to said tenant before proceeding to court! This is seen as problematic given the already lengthy process landlords face when trying to regain possession once the wait for the court hearing (sometimes multiple) and bailiff thereafter are factored in. Critics argue that waiting for four months of arrears before initiating court proceedings places an undue burden on landlords. One commentator humorously noted, "Let's just hope they've damaged the furniture in the meantime!".

These amendments will also serve to increase the level of debt the tenant accumulates and subsequently, increase the likelihood of the landlord attempting to recover the debt via seeking a CCJ making it more difficult for tenants to rent a home in the future.

As currently the case, the process can be frustrated by the tenant paying enough rent to reduce the arrears to just under 3 months before the court date, in which case possession cannot be granted. However, Grounds 10 and 11 will still be available for any amount of rent arrears or persistent delays in paying rent but this will be at the judge's discretion.

Grounds 1 and 1A – Sale of Dwelling House and Occupation by Landlord or Family

The grounds proposed to cover the need to evict when a landlord needs to sell the property or move back in, could also cause difficulties for landlords - particularly the inability to use these grounds in the first twelve months of a tenancy. Circumstances can change abruptly and if the property has just been let out, there will be a long wait before a landlord can take back possession of the property. This could also prove more frustrating to landlords with larger HMOs rented by the room who need to sell it with vacant possession (more probable than with tenants in situ after the reforms). A large 8-10 bed HMO could easily welcome a new tenant every month. With the 12-month rule, landlords will have to cope with dwindling tenant numbers and rental income combined with high running costs before they are awarded possession on the final tenant. Interestingly, when a mortgage company intends on selling the property, this 12-month rule doesn't apply.

Accidental landlords, such as those suddenly needing to move elsewhere for a year for work/needing to care for a family member or those that might rent a property out whilst under probate, will certainly have to consider their options more carefully.

All of these examples imply an increase in the number of empty homes as the risk of being 'stuck' in an unaffordable situation is far greater for many short-term landlords.

Grounds 7A and 14: Anti-Social Behaviour

One of the more complex issues involves evicting tenants for anti-social behaviour, especially in HMOs where offenders live with others (although it is highlighted that additional weight be given to the impact on other housemates). Previously, Section 21 notices provided an effective way to address more minor disturbances and irritating behaviour in an HMO without the need for further action or eviction. However, with its removal, landlords may struggle to deal with problematic tenants and the behaviour might not be considered severe enough to be granted possession even if the other tenants are fed up and leaving. Of stronger concern, in serious cases where other tenants or neighbours are reluctant to file formal complaints due to fear of reprisal from the offender and wish to remain anonymous, landlords may have no police reports or witness statements to present to the courts. This could potentially lead to landlords resorting to extreme measures, such as installing CCTV in all communal areas to gather proof or worst-case scenario, being left with no alternative but to sell the property evicting all other tenants in the process.

Fortunately, there is no notice period indicated for these grounds so landlords can seek possession immediately, dependant on available court dates and time taken to employ the service of a solicitor/eviction specialist of course.

Grounds 4 and 4A: Academic Institutions vs. Standard Landlords

Another discrepancy highlighted is the difference in notice periods between academic institutions and private landlords letting to students. While academic institutions are given more favourable terms, private landlords are left wondering why they face the same student-related challenges but are treated differently. With the proposed 4 month notice period for ground 4A in mind, PRS landlords may need to issue eviction notices to all tenants as standard procedure to ensure the house will be vacant in time for the next group that they've already entered a tenancy with.

It should be noted that within the proposed bill, there are certain requirements that must be met to use ground 4A including the following:

• -The property must be an HMO.
• -The tenant must meet the student test on the day they move in (be a full-time student etc).
• -The landlord must have informed the tenant that they may use this ground before the tenant has entered into a tenancy.

Meaning ground 4A won't be available to 1 and 2 bed student properties, so in future, these will need to be treated as 'normal lets' and many may drop out of the student market as a result.

Rent Increases and Tribunal Concerns

Regarding rent increases, many landlords feel the bill introduces little new substance and negatively impacts the process. Most increases are already administered using section 13 notices, once per year, with the tribunal available for determination as to whether the rent proposed is reasonable. With the threat of Section 21 no longer a consideration for the tenant, the existing process would have worked effectively and fairly without alteration. A few notable amendments are that tribunals will not be able to award a higher rent than the landlord originally sought and the rent increase won't apply until the tribunal have heard the case. The start date for the increase can also be deferred an additional two months thereafter.

Bearing these changes in mind along with the fact that the tenant can wait until the last minute of the two-month notice period to challenge the increase, the number of appeals will undoubtedly increase, causing a backlog, as tenants become aware that it guarantees a financial saving with no risk attached.

Serious consideration needs to be given to funding and ensuring additional capacity of the tribunals to guarantee delays in applying rent increases remain reasonable, although it's highlighted by many that these amendments could be viewed as a sneaky form of rent control or "rent suppression". However, long delays could have unintended consequences for tenants as it will likely encourage landlords, who might have historically left longstanding tenants at under market rents, to habitually increase the rent to market value at every opportunity, just in case. Furthermore, a landlord with a sudden mortgage increase resulting in them making a loss, may simply decide to sell instead (normally with vacant possession outside of larger HMOs) or a landlord who intended to sell a property with a tenant in situ may change their mind (as the current rent will impact the sale price) – both of which would lead to further instances of eviction.

Although no longer as common, some existing tenants will also be immediately disadvantaged by these reforms - for example, those with a rent review clause linking rent increases with RPI/CPI currently protecting them from the high increases in market rents seen in recent years. These types of tenancies do still exist – I myself, am a tenant with such a contract that I've been satisfied with for 14 years.

Discrimination and Affordability

While the bill aims to further address discrimination towards applicants on benefits or with children by making it illegal, many landlords and agents already use affordability checks as a way around these regulations and assessment of affordability will not be prohibited. While LHA rates continue to not reflect market rents, these amendments are unlikely to have much impact. The harder and longer it becomes to remove non-payers, the more risk averse landlords and the guaranteed rent insurance products, increasingly relied upon, will become so the eviction reforms just exacerbate the problem further.

Pets and Tenant Fees Act

The reforms also address the issue of pets in rented properties with landlords not able to refuse permission without clear justification. There is a prescribed way requests need to be made and responded to and tenants will be able to challenge unfair decisions.

However, proposed amendments to the Tenant Fees Act will allow landlords to require pet insurance. This can be taken out by the tenant or by the landlord who can recover the costs from the tenant including any excess payable on claims. A landlord should not make a claim from both the insurance and deposit which will pose timing issues. While this appears to offer some security for landlords, it raises further questions about how such insurance will be monitored and enforced. This will be more costly to reasonable tenants than the traditional increase of the refundable security deposit that used to be employed in such circumstances before the Tenant Fees Act.

Time will tell as to what constitutes a reasonable reason to refuse permission but it would be surprising if considered unreasonable to deny pets in a shared house. 

Decent Homes Standard and Awaab's Law

The bill also incorporates the Decent Homes Standard and Awaab's Law, which aim to ensure better living conditions for tenants. Regardless of these changes, Local Authorities already have various powers that address hazards in homes alongside enforcement options and their powers will be extended via the reforms including increased fines and even rights to entry without a warrant in some cases. Although the social rental sector struggle to meet these standards themselves, most landlords who maintain their properties and respond to maintenance issues adequately, should not be overly concerned about these proposals. However, there could be an impact on those with older bathrooms and kitchens.

We will need to wait for further details of what these will look like for the private rental sector but also for the results of the HHSRS review.

Reforms to Rent Repayment Orders (RROs)

Rent Repayment orders already exist but the bill proposes extending RROs to company directors and superior landlords, a move that could have serious implications for those involved in the property market. The amount of rent a landlord can be ordered to repay and the time a claim can be made, will both double to 24 months. Additionally, the circumstances in which a rent repayment can be ordered will also be extended to cover various breaches of the reforms such as failure to register on the landlord database, illegal eviction and misuse of eviction grounds.  

Ombudsman, Landlord Redress and Private Rented Sector Database

Landlords will by law, need to join a redress scheme, similar to what is already in place for agents, as well as registering themselves and their property on an online database before marketing a property - both at a cost to the landlord. Failure to do so will incur civil penalties of up to £7,000 for initial breaches and up to £40,000 or criminal prosecution for persistent breaches thereafter plus tenants can seek RROs for landlords that fail to do so.

The redress scheme will be designed for tenants making complaints about their landlords and not vice-versa although the government are "exploring options" for provision to provide landlord-initiated mediation to enable resolution before escalating to courts. If mediation is provided, participation would be voluntary for the tenant and decisions not binding upon them, contrary to decisions made upon the landlord.

It is indicated that the database may require landlords to upload safety certifications and keep them up to date making them publicly available at the touch of a button which raises the question of the need to also provide these to the tenant and licensing authorities etc. Regardless, more precise details and costs for the above will hopefully be revealed in good time to prevent a chaotic scramble, unlike the CMP scheme requirements for agents in 2019. 

Additional Concerns For Landlords

Landlords have expressed concerns about several other aspects of the new system, including the subsequent increased risk and penalties for minor administrative errors, which was already relatively high and often disproportionate. Alongside existing legislation, the potential for increased workload and bureaucracy remains a huge concern. This will only aid rogue tenants further in taking advantage of loopholes, delay tactics and making costly claims whether or not any ill intent by the landlord or true damage to the tenant can be demonstrated.

The more hands-off landlords, whether because they are investors only or overseas who leave management to agents, may find the reforms particularly hard to stomach. They will need to increase their involvement in numerous ways whether joining landlord redress schemes, uploading certificates or attending eviction hearings at short notice (or paying a small fortune for a solicitor or barrister to attend on their behalf as agents are not permitted).

The costs of operating a rental property will increase in multiple ways yet again, whether landlord registration fees, switching from self-management to using an agent due to the increased legislative burden or solicitors fees to process evictions – agents that might have been happy to process a Section 21 to conclusion as part of their management service, will not accept the liability for the more complicated Section 8. Unfortunately, such costs typically get passed onto the tenant in one way or another and the changes to legislation do not resolve the core problem – the housing shortage.

There was already a vast amount of legislation in place, some of it necessary, some of it overly prescriptive and much of it not used to its full capacity. There was one stumbling block evident in a minority of cases with "unscrupulous" landlords, which was the tenant's unwillingness to make a complaint due to fear of homelessness – compounded mostly by the growing housing shortage. Feeling confident in the ability to find alternative housing, whether private or social or even hope to purchase a property themselves, would naturally reduce such fear or minimally allow a tenant to complain about the landlord after they left. This would have been a better solution and focus all round. Regardless, as it stands, the simple removal of Section 21 and conversion to Section 8 with more landlord-friendly grounds and certainty would likely have removed this remaining obstacle which begs the question as to whether the rest of it and subsequent upheaval/cost is even necessary.

The reforms also perhaps fail to remember why Assured Shorthold Tenancies and Section 21s were introduced in the first place – to increase both the willingness of mortgagers to lend on buy-to-lets and encouraging private rental supply to cover dwindling social housing stocks.

Positive Takeaways For Landlords

Despite the concerns, there are perhaps a few positives for landlords in the bill. For example, tenants and the "no win, no fee" claim solicitors should no longer be able to make multiple claims for compensation on a deposit due to minor administrative errors as there is only one single continuing tenancy. Landlords may also benefit from more streamlined document-serving processes due to not having to remember to re-issue various documents, such as the how to rent guide when a tenancy becomes a subsequent statutory periodic or renewed etc. Additionally, the conversion of tenancies to what is effectively contractual periodic, will prevent councils from unfairly holding landlords responsible for council tax when tenants leave earlier than their notice period.  

Conclusion

While the Renters Rights Bill introduces several long-expected changes to the UK property market, it also presents numerous challenges for landlords, tenants, and agents alike. Whether the final bill strikes the right balance between tenant protection and landlord rights remains to be seen, but it's clear that the sector will need time to adapt to the new landscape.