Following the recent Renters (Reform) Bill announcement regarding changes to housing laws, our Senior Associate Lorna White, who oversees our residential lettings service, reviews what the changes will mean for UK landlords...
The Renters (Reform) Bill will bring with it a series of changes which private landlords will of course want to digest, as the dust settles on what is being couched as one of the biggest housing reforms seen this lifetime.
Firstly, I think it’s important to note that we have watched Scotland take a similar approach to housing reform in previous years and it has been largely successful to date. This new ‘landmark’ Bill mirrors elements of our Scottish neighbours, leaving me optimistic there will be some significant advantages for private landlords off the back of the reform changes.
There is a lot to take in, so this summarises some of the key changes and possible implications private landlords will need to understand more about.
Shift to periodic tenancies
We see one of the most significant changes to come from the announcement being the change to periodic tenancies, whereby a tenancy agreement runs from month to month (or in some cases week to week). Whilst this will be a considerable shift for landlords, who have previously been used to a minimum six-month tenancy, the current state of the market is weighted heavily in their favour with the demand for property far outstripping supply – a trend we expect to continue for the foreseeable and certainly work in favour of landlords.
Greater flexibility for landlords
On the flip side, this change will also empower landlords to have greater flexibility around tenancy lengths, particularly when a landlord is considering a property sale, for example. In this instance, a flexible tenancy would certainly work in the landlord’s favour.
With Section 21 disappearing and with that the grounds on which landlords can evict tenants, the periodic tenancy approach could also be favourable to ending arrangements which might not be the right fit for landlords and tenants. There will still be several grounds on which tenancy eviction can take place.
Relationship building from the outset
I believe that the security provided by a landlord and a long-term tenancy will continue to be in high demand and will likely be the preferred route for many when selecting and committing to an agreement. What is going to be key and is an area where we can really support landlords, is having honest and open conversations from the outset for landlords to understand the needs of the tenant versus the suitability of the property and agreement, to gauge the best fit so that both parties are comfortable and satisfied, supporting the relationship from day one. This is a key part of the process we already have in place for our clients.
Paws for thought
The shift to allow pets in all homes will likely cause landlords some unease, however, they will still be able to enforce several parameters in this area, such as a vetting process for the pet and owner, criteria infestation treatment, proof of vaccinations, a pet passport etc. along with all the usual damage clauses.
Ombudsman support for landlords
We will also see a new ombudsman in place for landlords, to oversee dispute resolutions. This was approached similarly in Scotland where you must register as a landlord. Also, a central digital property portal is to be put in place, to ensure compliance throughout the industry and, in our opinion, is a welcome change which will benefit all parties.
Finally, a note on timescales
It’s our view that these changes will only come into effect from November 2024 at the earliest, and even then, only for new tenancies and six months later again for existing ones. There may also be a second reading of the Bill or indeed another introduced, which would fall after the next election and subsequently impact the outcome and timescales accordingly.
Overall, we see these reforms impacting generally favourably on private landlords, however, there remains much to be put into place before we start to see the impact of this most recent reform. As always, we can help with any concerns or questions you might have around these changes or indeed any wider letting support you might require.
You can read the Reform in full here.
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