The Renters' Rights Bill 2024 proposes to introduce important changes to the UK rental market affecting both the build-to-rent and purpose-built student accommodation ("PBSA") sectors alike.
On 11 September 2024, the United Kingdom's Renters' Rights Bill received its first reading in the House of Commons. The Bill follows on from the Renters (Reform) Bill 2023, introduced under the previous UK Government, and will, if successfully passed into law, mean a number of significant changes relevant to the built-to-rent and private-rented sectors. Some key takeaways of the Bill include:
Abolition of Fixed-Term Tenancies
Fixed-term assured shorthold tenancies ("ASTs"), which have long been a staple of the rental market, will be abolished. ASTs will be replaced by periodic tenancies which will continue indefinitely unless validly terminated. Tenants will be able to terminate a periodic tenancy by giving two months' notice, via any written method. Landlords will be able to terminate only on certain prescribed grounds (see below).
Abolition of No-Fault Evictions
Section 21 of the Housing Act 1988 currently allows landlords to evict tenants on two months' notice (after their contractual term ends) without needing to specify any other ground—i.e., a no-fault eviction. The Bill will abolish no-fault evictions and instead will require landlords to prove a ground for eviction before the property can be reclaimed.
Arrears Grounds
The Bill will allow termination of periodic tenancies where tenants fall into arrears, but landlords will need to give four weeks' written notice (currently two weeks), and tenants must have arrears of at least three months or 13 weeks (currently two months or eight weeks). In effect, tenants can be expected to accrue at least four months' arrears before a landlord can bring a tenancy to an end.
Rent Increases
The Bill places new regulations on rent increases; landlords will be able to increase rent only once a year, which must be at market level. Tenants can challenge any increase at the Tribunal, and the new rent will not be payable until the date of determination. It remains to be seen how long the Tribunal will take to make such determinations.
Other Changes
The Bill will introduce other changes which are not summarised in this Alert, such as introducing a new ombudsman and extending "Awaab's law" to the private sector (a law requiring landlords to fix serious health hazards within a set time frame).
Certain parts of the Bill remain unclear, in particular its application to PBSA. Explanatory notes suggest that, as PBSA tenancies are not assured, the PBSA sector will be exempt "as long as providers are registered for government-approved codes". Yet many providers of PBSA are not so registered and do currently grant ASTs to their student occupiers. There is accordingly uncertainty on whether PBSA tenancies will generally be exempt or not. This point may be clarified as the Bill moves through government.
The introduction of the Bill is a priority for the new Labour Government, and we can expect to see it become law in the near future. For now, however, the Bill remains subject to amendment from the House of Commons and the House of Lords. We will keep developments under review as the Bill works through the Government, and a detailed Commentary will be published once the Bill becomes an Act.
