The highly anticipated Renters’ Rights Act finally became law on Monday, confirming a slew of changes are on their way for London tenants and landlords.
Tenants can look forward to new protections like bans on Section 21 no-fault evictions, bidding wars, and landlords asking for large sums up-front.
With a third of all London households privately renting, more than one million tenants in the capital alone, and a rental market worth £617 billion, any changes are likely to have a huge impact on housing in the region.
“Make no mistake, the Renters’ Rights Act is a victory of a lifetime of England’s 11 million renters,” said Mairi MacRae, Director of Policy and Campaigns at Shelter.
“Once implemented, this legislation will finally rebalance the scales in private renting. Tenants will be unshackled from the unfair no fault evictions that plagued them for decades, while parents and people who need housing benefit will be more able to get a foot in the door.”
What is in the Renters Rights Bill?
The law will remove fixed-term assured tenancies, meaning most tenancies will now automatically become “periodic” or rolling contracts, with tenants able to give two months notice if they want to leave.
Landlords, on the other hand, will only be able to evict a tenant for reasons like rent arrears or antisocial behaviour, or if they want to move back into their property or sell it. In the latter cases they will only be able to do so after the first year of the tenancy, and will have to give four months notice.
The law is great news for would-be pet owners, as it stops landlords from being able to put blanket bans on pets in their rental.
Instead, it gives tenants a right to request permission to keep a pet and commits landlords to assessing each request for a pet fairly within 28 days as well as to providing a valid reason for refusal.
The landlord, in return, may require tenants to get pet insurance.
Other new regulations coming into force that should benefit tenants are the new Ombudsman to provide a free way to resolve disputes, higher standards for rental homes in general, and tougher rules on rent hikes. Rents can only rise once a year in line with local market rates and landlords must give two months notice of a rise.
What should London tenants know about the new law?
Tom Darling, Director at the Renters’ Reform Coalition, says tenants should get to know their new rights and stay alert to landlords breaking the rules. He is keen to point out the role of the new Ombudsman and the power renters will have to make sure new regulations are followed.
“Renters can play a role in enforcing the new law, and can even claim back rent payments for certain offences, so they should keep an eye out for landlords breaking the rules — things like conducting bidding wars, asking for more than five weeks’ deposit or rent ‘up front’, discriminating against renters on benefits or with children, not being on the new landlord register, evicting tenants to sell a property but then re-letting it – all of these will be breaches of the act.”
Matt Hutchinson, director of flatshare site SpareRoom, agrees. “Tenant awareness is overwhelmingly low. In a survey of 7,074 flatsharers in England earlier this month, 36 per cent had never heard of the Renters’ Rights Bill, and a further seven per cent weren’t sure. Another 36 per cent had heard of it but didn’t know much about it or how it might affect them.
“Renters will soon have a host of new protections, but they need to know about them if they are to exercise them. Challenging unreasonable rent increases, for example, will require tenants to be proactive.”
Darling says tenants should also be cautious about making sudden moves before new regulation have come into force. “Because we don’t yet know when the Renters’ Rights Act will come into force, renters shouldn’t make any major decisions based on it.
“When the law does come into effect, it will apply to all tenancies, so if a tenant signs a rental contract now, they will still benefit from changes in the law on implementation day (meaning some renters could potentially give notice to leave sooner depending on how long their contract is).”
Will the Renters Reform Bill push rents up?
“We’ve not seen supply drop in the flatshare market yet,” Hutchinson says, “but there’s a real risk landlords will react by leaving the rental sector or reducing their portfolios. We already have a rental supply crisis in London and diminishing supply could force up rents still further.
“Earlier this month, we surveyed 961 UK landlords and 27 per cent claimed to be in the process of leaving the rental market while five per cent said they were moving into short-term holiday lets. This is a potentially huge problem for the already under-supplied rental market.”
Ben Twomey, chief executive of Generation Rent, says “the glaring gap in the legislation is that it does not address the soaring cost of renting”.
“Recent ONS stats showed Londoners spend on average over 42 per cent of their income on rent.
“Our concern is that, once Section 21 evictions are abolished, some landlords will start using sudden rent hikes as Section 21 evictions in all but name.”
He said tenants should make sure they challenge rent hikes through the First Tier Tribunal system — a free service that will make a decision on what is a ‘fair rent’ for the home.
Will there be a short-term surge in evictions?
There is also concern that in the time before the rules come into force, landlords could be quick to evict tenants now or change rents. Experts urged the government to act quickly in giving a timeline for their plans and putting the rules in place.
“The Government must now give clarity to renters and landlords by announcing an implementation date quickly, bringing in renters’ new rights as soon as possible,” said .
Once the law has come into force, some have said landlords could exaggerate rent “market values” to price tenants out, or claim they plan to sell in order to evict a tenant and then quietly re-let the property soon after.
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