How the Renters’ Reform Bill Will Affect Landlords.
The Renters’ Reform Bill is still on the table, so what should landlords and property investors be aware of?
For landlords and investors, the UK private rental sector contributes a large percentage of their overall returns. However, several rules and regulations must be adhered to.
A few weeks back, the housing secretary Simon Clarke confirmed that the Renters’ Reform Bill would be introduced. However, the now former Prime Minister, Liz Truss. Allegedly suggested the abolishment of Section 21, will not go ahead.
The Renters’ Reform Bill plans to set out big changes within the buy-to-let sector, along with new rights for tenants. Although a number of changes have been met with praise and have been seen as a step in the right direction. Others are less popular and have landlords feeling targeted. At a time when the private housing sector is more essential than ever.
What is in the Renters’ Reform Bill?
Section 21 (no fault) evictions: Currently, landlords have the right and ability to evict a tenant at the end of a fixed term tenancy, or during a rolling tenancy. This can be done without having to give a good reason. To remove this right has come under scrutiny from some landlords and industry members. It will make landlords removing tenants a harder process. The idea is that there will be a reformed plan to protect landlords. In circumstances such as rent arrears, or wanting to sell the property or move back.
Periodic tenancies: These could replace Assured Shorthold Tenancy Agreements. This is currently the most common form of tenancy agreement. The government states, “both parties will better understand their rights and responsibilities. Whilst providing greater security for tenants, while retaining the important flexibility that privately rented accommodation offers.”
Rent review clauses: These will be removed under the Renters’ Reform Bill. This means landlords will only be able to up their rents once a year. They will also have to give two months notices of rent increases. Even though its unlikely that landlords will increase rents more than once a year. This move is to protect tenants from “unscrupulous landlords”.
Accepting pets and people on benefits: Landlords will now no longer be able to blanket ban certain types of tenants. This is to make it fairer for tenants who claim benefits or have pets.
Hopes for the future
It is hoped that that Renters’ Reform Bill will improve standards and fairness across the private rented sector and make the sector more appealing.
With a date note yet set – we could see more changes and tweaks to the bill. Therefore the entire sector before it’s introduced. It is important that landlords be aware of the potential changes that lie ahead of them and the industry as a whole.