Renters’ Rights Bill: what does this new legislation mean for landlords?

With the Renters’ Rights Bill nearing the end of its passage through the House of Lords, our property litigation team outlines the key points that landlords should be aware of. 

The Renters' Rights Bill is moving to the Committee Stage in the House of Lords, which will be on the 22 and 24 April 2025. Following this, we anticipate amendments may be made to some of the existing provisions and there is some considerable scope for the Bill to change before it is passed into law. It is expected that the Bill will be passed into law as early as summer 2025 and possibly before parliament’s summer recess which should take place in late July 2025. 

The passing of the Act does not mean all the provisions of the Bill will come into force at the date of Royal Assent, as the current drafting of the Bill provides for a deferred commencement date for the majority of the Bill’s provisions. There is currently significant uncertainty as to how soon the government will set the commencement date following the passing of the Act.

The Bill seeks to abolish all ASTs, which means all existing ASTs and assured tenancies will become assured periodic tenancies on the commencement date (subject to some limited transitional arrangements in Schedule 6 to the Bill). Tenancies will no longer be granted for a fixed term and will instead be granted on a rolling basis. The rolling period will be for the same duration as the period for which rent is paid, which must either be monthly or a period of less than 28 days.

For existing tenancies, this means:

• Any provisions in a tenancy agreement providing for a fixed term will have no effect and will be unenforceable.
• The tenancies will instead be on a rolling basis, for the same duration as the period for which rent is paid (monthly or a period less than 28 days).
• Any ASTs which provide for rent to be paid on a quarterly, six-monthly or annual basis in advance will have no effect and will be unenforceable. Instead, the rent will be payable monthly on a pro-rata basis.
• Tenants seeking to terminate their tenancies will need to give their landlords’ at least two months’ notice in writing (which will still need to align with the end of a rent period), subject to any shorter period the parties might have agreed (whether in the tenancy agreement or in a separate document). 

The most controversial headline relating to existing ASTs and the Bill relates to the removal of section 21 notices as a means of obtaining possession, bringing to an end so-called “no fault evictions”. In order for a landlord to recover possession in the future, landlords will be required to prove in court that a ground for possession is made out before a possession order will be granted to regain their property. This means the existing section 8 route will remain available to landlords, but the process is being heavily altered through increases to the amount of notice required, new grounds that can be relied upon and changes to the existing grounds. 

The current drafting of the Bill provides for a transitional period for ASTs already in existence at the commencement date where notices have been served but possession proceedings have not been started before the commencement date.

What this means in practice for section 21 notices:

• Landlords should be able to serve section 21 notices until the commencement date.
• After the commencement date, landlords can bring possession proceedings based on notices served before the commencement date within either six months beginning with the date on which the notice was given or three months from the commencement date, whichever is soonest.
• After the commencement date no new section 21 notices can be served.

What this means in practice for section 8 notices:

• Landlords can continue to serve section 8 notices based on the existing grounds until the commencement date.
•  After the commencement date, landlords can bring possession proceedings based on notices served before the commencement date either within 12 months from the date the notice was given or three months beginning with the commencement date, whichever is soonest.
• Any section 8 notices served after the commencement date will need to rely on the new grounds.

For both types of notices, possession proceedings which are issued before the commencement date will continue under the current legislation. For landlords there will be a lot of uncertainty in the coming months and, if landlords do want to regain possession of their properties, they might wish to seek legal advice quickly while section 21 is still an option. This uncertainty has led to a rise in section 21 (and section 8) notices being served in recent months and landlords exiting the private rental market altogether.

We have already received increased instructions from our landlord clients seeking to issue both section 8 and section 21 notices, in the hope that they will be able to rely on these notices even after the Bill passes into law as a result of the current provisions allowing for a transitional period. Now more than ever it is crucial that landlords serve valid section 21 notices. Any delays caused by the service of invalid section 21 notices could mean landlords miss out on the benefits of the transitional period provided by the Bill, and will instead need to provide a reason for wanting to recover possession under the section 8 process. 

By contrast, the picture for tenants may seem to be a positive one, with increased security of tenure and stability, greater regulation in respect of rent increases and an obligation on landlords not to unreasonably refuse permission for the tenant to keep a pet in the property. Rent in advance appears set to be capped at one month in advance and landlords will be required to register with a national database. Failure to adhere to the requirement to be registered will prevent a landlord from recovering possession. Whilst on the surface it would appear the provisions of the Bill will protect tenants, there are fears of unintended consequences.

It should be remembered that the Bill is not yet law and there may be further changes before it receives Royal Assent. In any event, the Bill represents the biggest change to the private rented sector in over 30 years. Our property litigation team are specialists in this area and are already helping landlords across the country plan for these momentous changes. But it is vital that both landlords and tenants should stay up to date with developments as far as possible and seek legal advice where there is any uncertainty, of which it is anticipated there will be much.