At a time when private landlords are exiting the property rental market, reducing affordable housing options for those in need of it, because of lowered profitability resulting from high interest rates and additional regulation, in May 2023, the Government laid before Parliament the Renters’ Reform Bill.
Intended to be introduced into legislation before the next General Election, the Government is no more specific on timing. The primary purpose of the Bill, when law, is to provide tenants with greater security by ending “no fault” evictions.
For those familiar, the “no fault” eviction relates to s21 Housing Act 1988 which presently provides the only method for a landlord to take possession of their property at the end of the tenancy period, on giving two months’ notice. No contravention of the assured shorthold tenancy terms needs to have been committed by the tenant.
Hence, there is no “fault”, merely the expiry of the period of the tenancy which the landlord and tenant were aware of, and had agreed to, at the outset of the tenancy. Such benefit is the “assurance” to the landlord that an “assured” shorthold tenancy will return possession of the property to the landlord at the end of the tenancy period and was introduced as the quid pro quo to legislation which restricted uncontrolled rent rises by landlords.
The Bill proposes to remove s21 repossessions but to increase the categories of “fault” evictions, seventeen grounds for which are currently contained within s8 Housing Act 1988, with a mind-boggling thirty-three grounds. On first reading, many are duplicated but distinguished by giving the Courts mandatory grounds and discretionary grounds for granting an order for possession. In addition, the Court currently has discretion to adjourn proceedings for a period as it thinks fit in relation to the s8 grounds.
Additionally, as a result of the Bill, no further assured shorthold tenancies will be created. New tenancies, and those existing, will take effect as periodic tenancies.
Overall, the effect is to keep Landlords exposed to the higher costs and added complexity of regulation for longer given the potentially indeterminate period the new Bill and, in its discretion, the Court, think fit.
If you would benefit from advice on the proposed regime, on how to secure possession before the Bill becomes law or amendments to your standard form rental agreements, contact BGW Solicitors.