Renters Rights Bill – March 2025

Renters Rights Bill – Here’s our handy summary of the latest updates

Earlier this month, the Renters’ Rights Bill recently passed its second reading in the House of Lords. This significant milestone brings us closer to substantial changes in the private rented sector (PRS), with key elements expected to become law by spring 2025. Here’s a concise overview of the main discussions and what they could mean for landlords and tenants.

Concerns about housing shortages

Peers have expressed differing views on the Bill’s potential impact on landlord involvement in the PRS. Some are against increased regulations in case landlords are driven away, worsening housing shortages. Others believe these concerns might be overstated.

The government is aiming to make renting more secure for tenants but issues such as removing problematic tenants and navigating lengthy legal processes could deter landlords from remaining in the market.  More landlords selling could lead to a shortage of properties and therefore to higher rents – as has been the case over the last year or so.   There is strong demand in the areas Pace covers for rental properties.   There doesn’t seem to be any serious talk within the current bill of introducing rent caps.    Rent increases will need to be implemented using the Section 13 procedure and the tenant will have the right to apply to the tribunal to see if the rent increase is fair – but this is our current procedure that we’ve adhered to for several years, with very few ever going to tribunal.

Decent Homes Standard

The Bill seeks to apply the Decent Homes Standard to the PRS, aiming to improve housing quality.  In reality, this simply means ensuring that a property must be in a good state of repair with no serious issues:  Roofs should not leak, plumbing should be functional, staircases are safe, electrics are not faulty…  most landlords will already ensure their properties are meeting these standards and should not face additional expense.

Pets in Rental Properties

The Bill includes provisions to grant tenants the right to keep pets, acknowledging the positive impact on mental health. However, landlords do have the right to assess each pet request individually and can refuse if there is a genuine reason to do so.  This could be concerns over keeping a large pet in a small flat, potential disruptive noise from the pet or when another tenant has pet allergies.  It has also been mooted there’s a notable lack of comprehensive pet damage insurance in the UK, which raises concerns about potential property damage and associated costs for landlords.

Court System Challenges

A significant point of discussion is the capacity of the court system to handle an expected increase in possession cases, especially with the proposed abolition of Section 21 ‘no-fault’ evictions. Peers have highlighted that the current system already experiences delays and additional cases could exacerbate these issues. The government has indicated a collaboration with the Ministry of Justice to address these concerns, but the effectiveness of these measures remains to be seen. It should still be possible to regain possession of a rental property if a landlord wishes to sell it vacant.

Ban on Rental Bidding and Upfront Rent Payments

The Bill aims to prohibit landlords and agents from encouraging rental bids above the advertised price to create a fairer rental market. However, there’s apprehension that this could inadvertently lead to higher initial asking rents, as landlords might adjust prices to mitigate potential losses.

Ban on Upfront Rent Payments

A proposed ban on requesting rent upfront is intended to make renting more accessible. However, this could pose challenges for certain groups, such as self-employed individuals, international renters and those with poor credit histories, who might rely on the option of paying rent in advance to secure a tenancy.  With a shortage of rental homes, we usually see a choice of tenants for most properties, so it is the tenants who are likely to lose out here.  It may be that insurers also bring new products to market to help fill this gap.

Enforcement by Local Councils

The proposed legislation grants local councils increased powers to enforce new rental rules. Despite this, concerns have been raised about whether councils possess adequate resources to effectively implement and monitor these regulations. The success of these enforcement measures will largely depend on the allocation of sufficient funding and resources to local authorities.

Next Steps

The Bill now moves to the committee stage, where detailed line-by-line examination and discussion of amendments will take place. This phase is crucial, as it will shape the final form of the legislation.

We will continue to monitor developments closely and provide updates as more specific detail is announced.  As always, we will update our procedures and you as information becomes available, ensuring we operate within the new legal framework whilst protecting your interests as best we can.

However, if you are looking to sell a property, remember that our sales team are experienced in selling investment properties and we have active investment buyers waiting to purchase.

Please do contact the Pace office to discuss your options.