Rental sector shake-up
The Renters (Reform) Bill has finally been introduced into Parliament, almost five years after it was first promised. It will only apply across England, because various reforms have already been introduced in Scotland and Wales. There is a common denominator, however, in that the changes generally favour tenants over landlords.
Scotland’s new tenancy regime arrived in 2017. This did away with fixed-term tenancies and also ended no-fault evictions. These changes have made it more difficult for overseas tenants to find accommodation because they cannot overcome the lack of a UK credit track record by paying rent in advance.
More recently, Scotland has introduced a cap on rent increases and a freeze on evictions.
The rent cap has somewhat perversely led to Scotland seeing the UK’s highest rent increases, with landlords putting up rents significantly between tenancies.
Wales has recently put in place various changes for landlords. Fixed-term tenancies and no-fault evictions have been retained, but, from this June, the notice period for a no-fault eviction is extended from two to six months.
The Welsh government is also consulting on possible rent controls, with a range of ideas – including a rent freeze or a price ceiling – being considered.
Similarly to Scotland, the Renters (Reform) Bill, if enacted, will do away with fixed-term tenancies and end no-fault evictions.
The grounds for a section 8 eviction will be expanded to include repeated rent arrears, the landlord intending to sell the property, the landlord or a close family member wanting to live in the property, or where the property is to be redeveloped.
Even though the Renters (Reform) Bill is unlikely to be enacted during the lifetime of the current Parliament, it gives a good indication of what the future holds for English landlords; the Labour party has indicated it will go even further in moving the balance of power towards tenants. This shift could lead landlords to make securing a tenancy harder:
As is now happening in Scotland, landlords and tenants may give a non-binding indication of the period that each expects the tenancy to run which should help to manage the expectations of each from the outset.