The Renters (Reform) Bill Updates: What it Means for Landlords

Goals of the Bill

The Renters (Reform) Bill aims to modernise the PRS by addressing no-fault evictions, periodic tenancies, and the condition of rental properties. Its main aims include addressing tenant security, improving living standards, and creating a fairer rental market. However, the changes have sparked concerns. Many landlords are predicting negative consequences for the sector.

The Renters (Reform) Bill has undergone several readings and amendments, progressing through Parliament. It is crucial to emphasise that the information provided here is current as of February 2025 and is subject to change. Rental property landlords should always consult the latest government information on Parliament.uk for the most up-to-date status.

Notable Changes for Landlords

The bill will introduce changes that will impact landlords, including:

• The Abolition of Section 21 “No-Fault” Evictions: This change will end the practice of tenant evictions without solid grounds, thus providing tenants with greater security.
• The Introduction of Periodic Tenancies: Fixed-term tenancies will be replaced with periodic ones, providing tenants greater flexibility.
• Strengthened Grounds for Possession (Section 8): While Section 21 evictions are being abolished, landlords will still be able to regain possession under specific grounds outlined in Section 8, including rent arrears, property damage, and anti-social behaviour.
• Fairer Rent Review Mechanisms: The bill aims to introduce more equitable rent review mechanisms, which could limit the frequency and amount of rent increases.
• Tenant’s Right to Request Pets: Tenants will have the right to request permission to keep pets, and landlords can only refuse on reasonable grounds.
• Decent Homes Standard: Rental properties must meet a minimum decency standard, requiring landlords to invest in property upgrades, maintenance, and repairs.
• Enforcement and Dispute Resolution: The bill proposes changes to enforcement mechanisms and dispute resolution processes, potentially including mandatory mediation.

Practical Implications and Considerations for Landlords

The Renters (Reform) Bill will have significant practical implications for landlords:

• Tenant Selection: Thorough tenant referencing becomes even more critical with the removal of Section 21. Landlords will need efficient, proven processes for assessing tenant suitability, including credit checks, employment history, and references from previous landlords. As highlighted by a Pegasus Insight survey, many landlords intend to be more selective about tenants going forward.
• Rent Increases: The proposed changes to rent review mechanisms may impact landlords’ ability to increase rents. They must be well-versed in the new regulations and ensure their rent review processes comply with the law. The Pegasus Insight report suggests that many landlords are already considering rent increases in anticipation of the bill’s implementation.
• Property Maintenance: The Decent Homes Standard will require landlords to invest in their properties to meet the required standards. This could involve significant costs for many landlords, especially those with older rental properties in their portfolio. Landlords should begin assessing their portfolios as soon as possible and planning for necessary upgrades before the legislation. However, the Pegasus Insight survey indicates a concerning trend: Some landlords are considering reducing their property maintenance budget. This approach could be counterproductive in the long run, potentially leading to more significant costs and legal issues.
• Managing Periodic Tenancies: Periodic tenancies require landlords to adapt their management practices. In this new framework, they must consider how to manage void periods, rent reviews, and lease renewals. The flexibility offered to tenants also presents challenges in managing property availability.
• Grounds for Possession: Landlords must be thoroughly familiar with the revised grounds for possession under Section 8 and ensure they have the proof to hand to support any possession claims.
• Pet Requests: Landlords must develop a clear policy on pet requests from tenants, specifying the circumstances under which they will grant or refuse permission. They should also consider the implications for insurance, maintenance, and deposits.
• Dispute Resolution: Landlords should familiarise themselves with the new dispute resolution processes. Mediation may become mandatory, and landlords should be prepared to engage in this process.
• Impact on Investment: The Pegasus Insight report indicates a significant decline in landlords’ appetite for expansion, with many considering selling their properties. This trend could impact the availability of rental properties and potentially drive up rents. The report’s findings highlight the need for government intervention to restore landlord confidence and encourage investment in the PRS.

Upfront Rent Payments and Guarantors (Students)

The Renters (Reform) Bill will also shake up the student rental market. Two key areas are under scrutiny: upfront rent payments and guarantors. The changes could end common year-long demands for student rent.

Many student landlords have relied on hefty upfront payments for years, often demanding a full year’s rent in advance. The Bill aims to stop this practice, potentially limiting the amount landlords can request upfront. This change could be a game-changer for student finances, but it will also require landlords to rethink their financial strategies. How will they manage cash flow? What alternative arrangements will they put in place? It is a shift that demands careful consideration.

Another significant proposal concerns guarantors. The Bill may introduce requirements for student tenants to have UK-based guarantors. While this might seem straightforward on paper, it poses a considerable challenge for international students who often lack access to UK-based individuals willing to act as guarantors.

Landlords will need to be flexible and explore alternative solutions, such as reputable guarantor services or potentially higher deposit requirements, all while staying firmly within the boundaries of the new legislation. It is a delicate balancing act between protecting their interests and ensuring fair access to accommodation for all students.

Case Studies: What This Could Mean for Landlords

Here we present some examples of what landlords could face in the wake of the new changes:

• Case Study 1: A landlord owns a portfolio of older properties. The Decent Homes Standard requires significant upgrades, including new kitchens and bathrooms. The landlord must assess the costs and plan the renovations while minimising disruption to tenants.
• Case Study 2: A tenant requests permission to keep a dog. Before deciding, the landlord must consider the implications for the property, other tenants, and their insurance policy.
• Case Study 3: A tenant falls into rent arrears. The landlord must follow the correct procedures under Section 8 to regain possession, ensuring they have the necessary evidence to support their claim.

Expert Commentary: Industry Leaders Weigh In

The Renters (Reform) Bill has ignited a lively debate within the property industry, with key figures and organisations raising concerns and cautious optimism. A recent gathering of industry leaders, including representatives from the British Property Federation, Propertymark, Goodlord, the NRLA, and crossbench peer Lord Best, highlighted the complex implications of the proposed legislation.

One of the most pressing concerns revolves around the potential for unintended consequences. William Reeve, CEO of Goodlord, cautioned against the prohibition of “bidding wars,” arguing that it could lead to landlords inflating asking rents in anticipation of negotiation, ultimately creating a less transparent and potentially more expensive market for tenants. He cited the example of a similar policy in New Zealand that was eventually abandoned.

Another major worry is the court system’s capacity to handle the anticipated increase in disputes. Nathan Emerson, CEO of Propertymark, echoed concerns about the existing pressures on the courts and questioned their ability to cope with the added demand from landlords and tenants. Ian Fletcher, Director of Policy at the British Property Federation, warned that this issue could “come back to bite” the sector.

The proposed changes to upfront rent payments also sparked debate. Ben Beadle, the NRLA’s chief executive, suggested that ending this practice could inadvertently disadvantage vulnerable renters who, while not meeting standard referencing criteria, rely on upfront payments to secure accommodation. He argued that this could remove a vital lifeline for those on the margins.

Student lets, a market segment with unique characteristics, was also highlighted as requiring further consideration. Lord Best indicated that the House of Lords is open to amendments addressing specific issues within the student rental market, particularly concerning fixed-term tenancies.

Despite these concerns, Lord Best believed the legislation would not trigger a mass exodus of landlords. He suggested that while some landlords might choose to leave the sector, the market would likely see a shift towards larger portfolio landlords. He and other attendees also emphasised the urgent need to address the supply and demand imbalance by building more rental homes.

This group of industry leaders also acknowledged some of the bill’s more positive aspects. Notably, the improvements to the Decent Homes Standard and the increased flexibility for tenants were welcomed. There was also hope that a thorough and dedicated Ombudsman would help to weed out the more unscrupulous landlords, improving the rental landscape for the betterment of everyone.

Reeve, from Goodlord, called for a more detailed property register, including elements like the Unique Property Reference Number (UPRN), to help boost transparency and streamline compliance for both landlords and tenants. He believes this would deliver better tracking of safety and legal information.

Conclusion

The Renters (Reform) Bill is poised to reshape the private rented sector in England. Landlords must proactively prepare for the key changes, including the abolition of Section 21, the introduction of periodic tenancies, strengthening grounds for possession, and meeting the Decent Homes Standard.

Detailed tenant referencing, thoughtful rent review practices, proactive property maintenance, and a clear understanding of the new regulations are essential for landlords to be successful in this evolving landscape. The changes also emphasise the need for government support to maintain landlord confidence and ensure continued investment in the PRS. Staying informed about the latest developments and seeking expert advice will be crucial for landlords to thrive in the post-reform era.