In 2019, the Government made a manifesto commitment to reform residential tenancy legislation in order to give a great level of protection to tenants. Subsequently a White Paper, “A fairer private rented sector”, was published in June 2022, giving some idea as to the reforms which were proposed. We now finally have the long awaited published Bill. The Government hope to have the Act in force by the end of 2023.
The Bill represents the most significant change to residential tenancy legislation since the late 1980’s and the impact of the Act will be substantial to a variety of landlords, tenants and Local Authorities alike. It was described in its introduction as:
“A Bill to make provision changing the law about rented homes, including provision abolishing fixed term assured tenancies and assured shorthold tenancies; imposing obligations on landlords and others in relation to rented homes and temporary and supported accommodation; and for connected purposes”
This piece looks at the key proposals in order to provide a snapshot of the new Bill. Over the course of the next ten days, our team will be producing a series of articles to cover the proposed reforms in more depth.
- The abolition of s21 Housing Act 1988: This has been seen as the most pressing issue for resolution and commits to the promises made in 2019. The Bill seeks to remove s21 and, along with it, “no fault evictions”. This means that landlords will require set grounds to serve notice and end any assured tenancy once the Act is in place.
- New tenancy structure: The Bill looks to remove Assured Shorthold Tenancies (ASTs) as an available tenure type and will therefore end fixed term tenancies. This is seen as a move to a simpler tenancy structure where all assured tenancies will be periodic, with a period of the tenancy being no longer than one month and the tenancy having no fixed end date. The Bill also looks to confirm that any lease with a term longer than seven years will not be an assured tenancy which will be beneficial to a number of leaseholders but particularly those in shared ownership.
- New grounds for possession: In order to give Landlords the ability to take back possession of properties that they require to sell or occupy themselves, new grounds are set out in the Bill to be added to Schedule two of the Housing Act 1988. Additionally, Landlords will be granted stronger grounds in respect of rent arrears and tougher grounds on anti-social behaviour. A number of the notice periods for various grounds of possession are amended.
- Flexibility for supported housing and temporary accommodation providers: New grounds for possession will be put in place for supported housing providers to overcome the removal of fixed terms. This will hope to provide flexibility where this form of accommodation is required as a “move on” placement.
- Pets: The Bill will introduce an implied term that a tenant shall have permission to request the ability to have a pet at their property and the landlord’s permission should not be unreasonably withheld.
- A new private rented sector Ombudsman: A new Ombudsman will mirror the scheme already available to social housing tenants. The ambition is also to expanded the Decent Homes Standard to cover privately rented accommodation.
- Extra enforcement powers for local authorities: Local councils will become responsible for enforcement action where landlords are proven to have infringed new rule set out in the Bill, such as the requirement for landlords to be registered on a new PRS database or misusing new grounds for possession.
- Transitional arrangements: will be put in place to make sure that all existing ASTs become periodic assured tenancies over time.
What does this mean for landlords?
These reforms will affect all residential landlords in some way, including private landlords, private registered providers of social housing, supported accommodation providers, NHS accommodation providers and higher education institutions. Local Authorities will also be impacted as they are asked to ‘police’ the enforcement of some of these measures.
So what next?
The Bill will now make its way through Parliament and it awaits its second reading. Although some parts of the Bill are likely to be amended and finessed, it has fairly wide cross party support and it therefore seems likely that the legislation will soon come in to force in a broadly similar shape to the current Bill.
We will be monitoring the route of the Bill through Parliament and will update on any key amendments or changes of direction.
Our further updates will be published over the course of the next ten days but should you wish to discuss this further, please contact Kate Hicks, Senior Associate or Steve Eccles, Partner.