A Clearer View

A new Renters’ Rights Bill

Rental reform was originally proposed five prime ministers ago, by Theresa May in 2019.

The last government’s Renters (Reform) Bill made significant progress through Parliament but was ultimately abandoned in a May ‘wash-up’ of parliamentary Bills prior to the general election. It had been delayed following considerable infighting between ministers and backbench MPs on both sides of the House.

The new Labour government announced in July’s King's Speech that it intended to pursue rental reform, in the shape of a new Renters’ Rights Bill. The new Bill was published on 11 September and takes rental reform a step further than that proposed by the previous government.

We have provided a summary below; there may however be further changes before it becomes law.

Tenancy and possession:

• Abolition of ‘no fault’ Section 21 notices
• Removal of fixed-term tenancies, creating periodic assured tenancies from the outset with no minimum term
• Tenants will be able to serve two months’ notice to quit from the start of the tenancy
• A 12-month protected tenancy period for tenants
• Increased notice periods for landlords with stricter possession grounds
• Changes to Section 8 Grounds for Possession
• A ban from discriminating against benefit claimants or tenants with children
• Right for tenants to request consent for a pet

Rents:

• Ban on asking for or accepting offers over the advertised rent of a property
• Rents payable monthly or every 28 days and no advance rent payments
• New procedure for increasing rent annually by serving a Section 13 notice with two months’ notice of the increase
• An expansion of rent repayment orders (RRO)

Standards and enforcement:

• Private Rented Sector Database which a landlord will be legally obliged to register both themselves and their properties
• The Decent Homes Standard applied to the private rented sector
• Apply ‘Awaab’s law’ to set timeframes for landlords to address hazards
• Local authority enforcement strengthened and civil penalties expanded

Resolving disputes:

• Private Rented Sector Landlords Ombudsman service

The government is keen to progress this Bill through Parliament with the second reading scheduled for 9 October 2024, and the general thought is that the Bill will be introduced in early 2025, but at the latest by summer 2025. We will continue to keep you updated as this Bill progresses.

In the meantime, we are available to answer any questions you may have - please contact your local Carter Jonas office.

Energy Performance Certificates

In another move which picks up where the Conservative government left off (with a dramatic U-turn last September), the Labour government has confirmed that landlords in England and Wales will be required to attain an Energy Performance Certificate (EPC) of C by 2030. The formal requirement is yet to appear but was confirmed in a parliamentary answer on 1 August.

Since 2008, there has been a legal requirement for landlords to have an EPC to sell or let a property.

In 2018, the Minimum Energy Efficiency Standard (MEES) required that for all new tenancies, rental properties must have an EPC rating of at least E, and in April 2020, that requirement extended to all existing tenancies.

As a consequence, landlords will be familiar with EPCs but should start considering necessary upgrades to their properties ahead of 2030.

Anti-Money Laundering rules

It is worth noting that HMRC recently announced fines of over £1.6 million in relation to various breaches of Anti-Money Laundering (AML) regulations.

Thresholds around supervision continue to create uncertainty and recent research by Propertymark found that 96% of respondents would welcome more prescriptive guidance on how to meet their obligations.

Relating mostly to the role of lettings agents, the government’s guidance for money laundering supervision is essential reading for landlords who manage their own properties.

The guidance describes the necessary approach to AML and the circumstances through which money laundering can come about: buying a property using the proceeds of crime, letting it or selling it on, and giving the criminal an apparently legitimate source of funds. The guidance warns that criminals may hide behind complex company structures involving multiple countries and bank accounts to disguise the real purpose of a transaction and also provides some insight into ‘ghost lettings’.