The Renters' Rights Bill: Balancing Tenant Protections and the Future of the UK Rental Market

The Renters' Rights Bill is set to significantly overhaul tenancy laws in England and Wales, promising stronger protections for tenants, including an end to 'Section 21' repossessions. Now, in its second reading in the House of Lords, the legislation aims to curb unfair evictions, but concerns are growing that it could unintentionally shrink the rental market.

Also known as 'no fault evictions', the Section 21 procedure allows landlords to regain possession of their properties without having to provide a reason. It is often used in cases where tenants fail to pay the full rent due or pay the rent late and prevents landlords from being required to rely on discretionary grounds for possession under a Section 8 Notice. In most cases, landlords can usually avoid the additional cost of attending a possession hearing where the court can deal with the possession claim on paper.

Section 21 Notices are also often used when landlords need to sell or move into the property themselves. However, the use of these Notices frequently receives criticism based on the actions of a minority of unscrupulous landlords who use them for 'no reason' evictions, such as in retaliation for tenant complaints about property conditions or to pressure tenants into accepting rent increases.

The implementation of the Renters' Rights Bill, if it becomes law, will require landlords to prove they have valid grounds for eviction against specific legal grounds, such as rent arrears, anti-social behaviour, selling the property, either themselves or a close family member occupying the property, or a significant breach of the terms of the tenancy agreement. The proposed new grounds have varying notice periods, ranging up to four months.

County Courts are already under significant pressure, with substantial delays in hearings and bailiff appointments. The abolition of Section 21 Notices will, in turn, remove the accelerated possession procedure, and all possession claims will require an in-person hearing, further slowing down an already overstretched legal system.

"While the sector welcomes greater security for tenants, the changes are expected to have a significant impact on the time and cost involved in regaining possession of a property, even where landlords have transparent and valid reasons," explained Amelia Ford, Residential Possession Proceedings Expert at Warner Goodman LLP.

"We already see cases where evicting a non-paying tenant in larger cities such as London, Birmingham, and Manchester can take over a year. If a claim is defended, the process can take even longer - potentially up to two years from the point of first non-payment. The new legislation will likely put further strain on the already overstretched courts as possession claims will need to go in front of a Judge before a Possession Order can be awarded."

These delays could pose serious financial risks for landlords with mortgages to pay or those relying on rental income for retirement. Faced with the potential of extended legal battles, incurring significant legal costs, and accumulating rent arrears, the prediction is that many small-scale private landlords will be forced to reconsider their position in the rental market.

Amelia added, "We have seen a real shortage of social housing in recent years, with local councils struggling to house individuals due to a lack of resources. We are being increasingly contacted by local authorities offering to pay the tenant's rent if the landlord would reconsider their possession claim. If more private landlords sell up and reduce the number of rental properties available, rents could be driven up, resulting in more individuals requiring the local authorities' assistance."

With the Bill now going through its final stages in the House of Lords, it's expected that these new laws will come into force before the end of the year. Landlords should familiarise themselves with these changes to ensure they are aware of their future obligations as private landlords.

If landlords have a managing agent instructed, conducting a full review of all current tenancies and asking what processes are in place to manage risk at every stage can help ensure compliance when the new laws are in force.

Seeking specialist guidance on the new legislation early can help navigate the evolving rental landscape and avoid unnecessary disputes and potential future income loss. For tailored advice on tenancy agreements or recovering possession of rental property, please contact Amelia Ford on 023 8063 9311 or email ameliaford@warnergoodman.co.uk.