Latest developments in Renters’ Rights Bill:

What landlords need to know

Ref: Charters Estate Agent, Southampton

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On the brink of becoming law, the Government has rejected the majority of amendments put forward by the House of Lords, which would have mitigated the severity of some of the amendments. Property professionals, landlords and tenants are poised to navigate this once-in-a-generation overhaul of housing legislation.

1. The Bill is still going ahead and will soon become law

The Bill is well on its way to Royal Assent, and it is highly anticipated to become law following the Labour Party Conference.

The Bill is structured so that most reforms will come into force immediately such as abolition of S21, introduction of new possession grounds, end of fixed term tenancies and rent-in-advance restrictions – whilst the landlord database and potentially the Ombudsman requirement will follow later, after a transition period to allow the sector to adjust and infrastructure to be put in place.

It is expected that the final Bill will become the Renters’ Rights Act this Autumn, meaning landlords have only a matter of weeks to make their final preparations ahead of the significant changes.

2. No requirement for separate pet deposit

One of the suggested changes would have let landlords request a separate pet deposit of up to three weeks’ rent, on top of the usual deposit cap, but that idea was turned down. The Government said the current five-week limit already covers potential damage, and adding more would make things harder for tenants financially.

3. No requirement for pet insurance

Requiring tenants take out pet insurance was also rejected, with Government noting that the insurance industry is not yet ready to offer suitable products at scale. Whilst pet owners can take pet insurance out if they wish, it won’t be something landlords can enforce.

4. No change to the 12-month re-letting restriction after a failed sale

Another change that didn’t make it through was a plan to shorten the timeframe a landlord has to wait before re-letting a property after asking a tenant to leave in order to sell. The House of Lords suggested reducing it from 12 months to six, but this was also rejected. The Government asserted the full year is important to stop landlords from abusing the grounds of repossession.

5. No extension of student possession grounds to smaller properties

Allowing landlords to use the student housing ground for possession for smaller properties, like one- or two-bedroom flats and not just HMO’s, was also rejected. The Government said that the current rules already strike a fair balance and help protect students who don’t fit the typical mould, like postgrads and students with dependents.

Whilst the finer details are still to be solidified, the industry is anticipating the imminent passing of the Bill, and is eager to establish the final version of the legislation in order to prepare.

Houses in Multiple Occupation (HMOs)

The Renters’ Rights Bill does apply to HMOs, as they are typically let on ASTs. This means:

• No more fixed-term ASTs: all existing tenancies will convert to rolling, periodic agreements.

• Section 21 notices abolished: possession must now be sought using defined statutory grounds.

Landlords will need to review all current HMO tenancies and ensure any possession notices are served on the correct grounds. In addition, a new discretionary ground, Ground 4A, has been introduced for student HMOs, allowing evictions ahead of a new academic year, subject to strict conditions.

One- and two-bedroom properties used by students

Smaller student lets are treated similarly to HMOs under most aspects of the Bill. However, some provisions, such as Ground 4A, do not currently apply as these properties fall outside the definition of an HMO.

Landlords owning or managing such properties should assume the majority of reforms will still apply but keeping an eye on possible changes, as ministers are considering extending certain protections.

Key new grounds for possession in HMOs (incl. student HMOs)

To regain possession under the new regime, landlords must rely on statutory grounds. Some are mandatory (the court must grant possession if proven), while others are discretionary (the court may grant possession).

Relevant examples include:

• Mandatory grounds: landlord or close family requiring occupation, intention to sell, serious rent arrears (3+ months), or serious antisocial/criminal behaviour. Notice periods will apply.

• Ground 4A (discretionary, student HMOs only): allows landlords to regain possession ahead of a new academic year, provided:

• The property is an HMO with 3+ bedrooms.

• In joint tenancies, all tenants are full-time students.

• Four months’ notice is given.

• The notice expires between 1 June and 30 September.