Update for charities: The Renters (Reform) Bill’s second reading in Parliament

The Renters (Reform) Bill received its second reading in Parliament on 23 October 2023, following its first reading on 17 May 2023. The changes proposed by the Bill are intended to fix the current perception of imbalance in favour of landlords, whilst still maintaining a buoyant private renting sector required to boost the economy.

Some of the main proposed changes are:

• The abolition of "no fault" evictions under section 21 of the Housing Act 1988.

• Limiting how often rent can be increased (current proposition is no more than annually).

• Assured Shorthold Tenancies to be replaced by periodic tenancies.

• An online "Property Portal" and Private Rented Sector Ombudsman to help deal with simple contentious issues.

Largely, the Bill is welcomed, but there remained some concerns expressed during the reading.

• Most controversially, the Bill has been indefinitely delayed creating overwhelming uncertainty. Now, proposed changes will only be actioned when a fit-for-purpose court system is in place. There is no indication as to how the court system will be overhauled.

• The Bill proposes modification of section 8, to lower the threshold to prove antisocial behaviour. What constitutes "anti-social behaviour" under the Bill is yet to be confirmed. The concern is that, in practice, many cases will still end up being decided in court.

• The proposed Ombudsman creates an unnecessary and confusing second option to the public.

Charities may be concerned about the changes to the current law impacting on their ability to sell a property left to it in a will. The Bill currently permits a landlord to gain possession provided that it intends to sell the property, and that repossession does not occur within the first six months of the tenancy.  This is key in relation to properties left as gifts in wills, as notice will still be able to be served on tenants so that the property can be sold vacant, where desirable.

Charities may also be concerned where it is gifted a property which requires significant remedial work. Under the Bill, a landlord is entitled to regain possession where it intends to demolish or reconstruct all or a substantial part of the property and those works cannot reasonably be carried out with the tenant in occupation. This is important where the property needs to be brought to a certain condition before later being sold.

The delay in getting the Bill through Parliament leaves many uncertain, as tenants and landlords alike will be unclear on the best way to navigate these changes with an inscrutable timeline. The Foot Anstey team will continue to monitor the progress of the Bill and update further in due course.