Soon, there’ll be a profound change in how we let and rent properties in the UK. Although it’s been in the pipeline for five years now, it’s finally being hashed out in Parliament as of Autumn 2024, under the term, “The Renter’s Rights Bill”.
Going forward, there’ll be fundamental differences for owners and tenants alike. The general gist is that power will shift in favour of tenants, which should equalise the historical imbalance between the two. MPs are stressing that, “Good landlords would have nothing to fear from the Bill”.
Below, we’ll cut the jargon and lay down the basics for you, from both sides’ perspectives.
Owners
For landlords, the long and short of it is that they’ll have less authority to enact changes in the lease. This mostly affects asking tenants to leave. Currently, we have Section 21, which allows landlords to evict their occupants with a 60-day notice. Often termed “no-fault evictions”, this is frequently used to free up the home if the landlord needs to sell.
The new Bill aims to double the minimum notice period to 120 days. It will also require landlords to allow tenants to stay for a 12-month minimum before this notice can be enacted.
This is probably the biggest, and most debated, change in the Bill. Understandably, owners are concerned that they may be stuck paying a mortgage they cannot afford if their living circumstances swiftly change.
Thankfully, there are ways of selling a property with tenants even considering this new law. Cash-buying services, for example, will pay an agreed fee for the tenanted property upfront, keeping hold of it until it’s ready to sell. For the owner, this eliminates the hassle of negotiating with the tenants. Plus, there aren’t any extra fees if the house sale drags along, even if it’s slow to sell after the tenants have left.
Renters
Tenants are rejoicing at these changes on the horizon. Amongst the mortgage rate hikes of recent years, more renters than ever have been asked to leave at the drop of a hat, while landlords sell up. This reform will give tenants the security to make their house a home.
Section 21 was also used as a method of “backdoor eviction” by a minority of landlords. This meant that rents could go up upon renewal to any price. If tenants disagreed, they would simply be presented with a No-Fault Eviction and would need to leave within two months. Many renters argue that this fostered a fear of negotiating rent price rises, or even bringing up complaints, in case they were treated unfairly.
The abolition of Section 21 means these worries should vanish. Unscrupulous landlords won’t be able to raise their rents above market value. This should allow tenants the protection to challenge excessive prices without fear of being asked to leave.
For owners and renters alike, huge changes are afoot. Renters would do well to keep track of the exact protections they have coming into force, to know their rights going forward. Whilst owners may need to consider if renting is still right for them, there’ll continue to be ways to make letting out a property a flexible venture.