New changes to the law include capping advance rent payments at one month and allowing bereaved guarantors to end a tenancy where the resident has died
The Renters’ Rights Bill passed the third reading in the House of Commons yesterday and will now receive further scrutiny in the House of Lords.
Housing minister, Matthew Pennycook, said the bill will “modernise the regulation of our country’s insecure and unjust private rented sector, levelling decisively the playing field between landlord and tenant” and “allow us to crack down on the minority of unscrupulous landlords who exploit, mistreat, or discriminate against renters.”
New changes to the proposed law include capping advance rent payments at one month’s rent to secure a home and safeguarding bereaved guarantors from being forced to pay rent for the rest of a tenancy where a resident has died.
Landlords will still be able to request a security deposit of five or six weeks, as well as references and a guarantor to ensure that their tenants can sustain the tenancy, but the advanced rent cap aims to give lower income renters access to the private market.
Further amendments include ending fixed-term tenancy agreements for private student housing, as well as closing potential loopholes in rent repayment orders (RROs) to make landlords liable for RROs if an offence has been committed even if the rent was paid through an intermediate body.
Additionally, fees paid by landlords will directly fund the creation and work of the private rented sector Ombudsman.
The bill has been met with scepticism from some members of the property sector.
>>See also: Badenoch: Labour’s Renters’ Rights Bill a “discentive” for private landlords
>>See also: New Renters’ Rights Bill would ban ‘no fault’ evictions and bring Awaab’s Law to private rental sector
Gary Scott, property dispute resolution partner with London law firm Spector Constant & Williams pointed out that landlords can be fined up to £40,000 for breaching regulations without a tribunal or court determination.
He said: “The committee stages of the passage of this bill has made clear that the government has no intention of properly resourcing the courts and tribunal to deal with the inevitable influx of claims and additionally required court time in dealing with disputes over rent increases and possession.
“The Minister said that the government would ‘continue to work with’ the courts and tribunals to ensure they have capacity, but refused to be drawn into a formal assessment of what increase in claims can be expected or a review as to how that increase will be dealt with and managed within the court or tribunal system.”
He added that county courts in London and busy regional courts are “already struggling to deal with [their] existing workload, with applications and correspondence taking around 20 weeks to deal with”.
“Possession claims can take more than four or five months to get a possession order,” he said.
”A year or more can have passed without a landlord receiving rent before a non-paying tenant is evicted. Adding to that workload burden without funding modernisation or increasing capacity is inviting significant problems ahead.”
Helen Tucker, partner and head of the housing litigation team at law firm Anthony Collins, has previously pointed out that the bill will also have ramifications for housing associations.
In a recent comment piece for Housing Today, she wrote: “For private registered providers (PRPs) specifically, the main change is the abolition of assured shorthold tenancies (ASTs) and the end of fixed-term tenancies; the Bill will convert all ASTs to periodic tenancies.
“Many PRPs use ASTs as starter tenancies, with a 12-month probationary period which can be ended using a Section 21 notice under the “no fault” paper only possession procedure. Under the new Bill, existing ASTs will be automatically converted to assured periodic tenancies, and the probationary period will fall away. PRPs will need to revise existing tenancies, policies and procedures to reflect this.”
Meanwhile, higher education organisations like Universities UK and the Higher Education Policy Institute have warned that amending student rental policies would further threaten the availability, affordability, and quality of student housing.
Labour’s Renters’ Rights Bill was first introduced in September 2024 and pledged to abolish section 21 ‘no fault’ evictions.
The previous administration’s Renters (Reform) Bill, which also included a commitment to ending section 21 evictions, was introduced in May 2023 but its progress stalled due to concerns about its impact on landlords and the courts.
The Conservative government then ran out of time to pass the law before the election in July.
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