What the Renters’ Rights Bill Means for Landlords

The UK government introduced the Renters' Rights Bill, on 11th September 2024, which will mean a major overhaul of the private rental sector. This new law will bring significant changes for landlords and letting agents alike. It aims to increase tenant protections, but it also means that landlords will need to adapt their practices. Our belief here at Spotlight Homes is that forewarned is forearmed. Let's explore the key provisions and understand how they might impact you.

Abolition of Section 21 No-Fault Evictions (actually it’s a no fault possession… the media continue to get this wrong, it’s so frustrating!! )

One of the most talked about changes is the abolition of Section 21. This means that as landlords you can no longer gain possession of your property from your tenants without a valid reason! 

While this provides greater security for tenants, it also means landlords will need to rely on specific legal grounds, we look forward to finding out exactly what these 'valid reasons' are...

What does this mean for you?

• Review your tenancy agreements: Ensure they clearly outline the terms and conditions that could lead to possession and possibly an eventual eviction.
• Keep detailed records: Document any issues or breaches of the tenancy agreement.
• Stay on top of rent payments: Late or missed payments may be able to be used as a 'valid reason' for requesting possession..

At Spotlight Homes, we already have systems in place to manage tenant relations and ensure compliance with tenancy agreements.

Bidding Wars Are Out!

Under the new bill, landlords and agents will be required to publish a fixed asking rent and will no longer be able to accept bids above that price.  

While this aims to create a fairer rental market, particularly in areas facing housing shortages, some experts worry it could push landlords towards short-term lets (like Airbnb) as a more profitable alternative.

What does this mean for you?

• Set a fair rent: Advertise a competitive but reasonable rent from the start.
• Consider market conditions: Be aware of rental prices in your area and adjust your expectations accordingly.

At Spotlight we have never accepted a ‘bidding process’ on rentals as a ‘fair and reasonable’ option. The ability to offer a high rent does not a good tenant make! We will continue to rely on our stringent vetting process and our many years of experience to get the best possible tenants to match with your properties.

Rent Increases: Once a year

The bill also introduces limits on rent increases, which will be restricted to once per year, which we do already! These increases must reflect the market rate. Mid-tenancy rent hikes will no longer be allowed, which will require landlords to be more strategic in setting rents at the start of the tenancy.  

What does this mean for you?

• Set your initial rent carefully: Ensure it's competitive and reflects the market value.
• Review your rent annually: Consider adjusting the rent each year to keep up with market trends.
• Let us guide you: Once there is more clarity on this we should be able to get processes in place to ensure that you are getting the best yield and keep your tenants happy too.

Whether there’s a requirement in the future for an RPI Clause or similar we wait to find out and then will let you know.

Pets in Rental Properties 

The pets provision is another area of interest. Especially for us and Wookiee, as our Head of Pup-Lick relations he is particularly invested in this matter.

Under the new bill, tenants will have the right to request a pet in their rental property, and landlords will be required to consider these requests reasonably. If a landlord refuses, it must be on reasonable grounds, such as the property not being suitable for pets. 

However, landlords are permitted to ask for pet insurance to cover potential damages. This strikes a balance between protecting tenants’ rights and providing some financial security for landlords. 

What does this mean for you?

• Be prepared for pet requests: Review your tenancy agreements and consider adding clauses related to pet ownership and insurance.
• Assess property suitability: If you're not comfortable with pets, ensure your tenancy agreement clearly states this.

We will be prepared for an increase in your tenants requests for pets. We are looking at ways to update tenancy agreements to include clauses on pet ownership and consider requiring insurance as standard by working alongside ARLA Propertymark and the RSPCA together. We do this in the hope that we can help advise you on the best way to protect your property as well as protecting animals from being in unsuitable accommodation.

Enforcement and Penalties

Local councils will be given greater enforcement powers to ensure compliance with the new rules. Landlords who breach the regulations could face fines of up to £7,000. As most of the local authorities are also landlords themselves they also have some work to do to catch up.

What does this mean for you?

• Stay compliant: Ensure your properties meet the Decent Homes Standard and that you follow the new rules regarding rental bidding and rent increases.

At Spotlight Homes, we're committed to helping landlords navigate these changes and ensure compliance with the new regulations. We are in direct contact with our local authorities over Hampshire, Dorset and Wiltshire to ensure that we pass on information on what may or may not be changing in the local area as quickly as possible to our clients.

Conclusion

The Renters' Rights Bill introduces significant reforms to the private rental sector. By understanding these changes and taking proactive steps, landlords can adapt to the new landscape and continue to operate successfully. 

Obviously this is not everything you need to know, these are just a few of the major changes that we have been told about that are coming our way. 

To navigate these changes effectively, landlords, and us as letting agents, need to stay informed, review current practices, and prepare for a more regulated rental market. This might involve revisiting tenancy agreements, adjusting rent-setting strategies, and ensuring properties meet the new legal standards.

Thankfully we have the backing of the the leading membership body for property agents, ARLA Propertymark which means as a Spotlight client you can rest assured that we will be with you every step of the way. 

If you are not yet a Spotlight Homes client and need support in adapting to the new rules, or advice on who to talk to about legal matters that you are concerned about, please get in touch with our friendly and experienced team of property professionals on 02380 181920 or by emailing lyndhurst@spotlighthomes.co.uk