Allison Thompson of Leaders Romans Group (LRG) discusses the key changes & impact on the Labour government recently introduced Renters’ Rights Bill.
The Renters’ Rights Bill, introduced by the Labour government, brings substantial changes to the private rental sector. It builds on, but also diverges from, the previous Conservative-led Renters’ (Reform) Bill, which saw its progress through Parliament stalled by the general election, while focusing on bolstering tenant rights and adding more stringent landlord obligations.
Key Differences Between the Conservative & Labour Bills
Periodic tenancies & abolition of assured shorthold tenancies
The Labour Renters’ Rights Bill intends to mandate that all assured tenancies become periodic. This means there would no longer be fixed-term assured tenancies; instead, tenancies would continue indefinitely until either party serves notice. This approach enhances tenant security, as they are no longer bound by time limits or face sudden eviction at the end of a fixed term. In addition, assured shorthold tenancies would be abolished, moving all agreements to a periodic assured tenancy model.
Abolition of Section 21 “no-fault” evictions
The abolition of Section 21, often referred to as “no-fault” evictions, is a shared element between the Conservative and Labour proposals. However, Labour’s proposed Renters’ Rights Bill takes a more immediate approach. In contrast, the Conservative Renters (Reform) Bill aimed for a phased removal of Section 21, contingent upon court reforms.
Rent controls & anti-bidding measures
Labour’s version includes provisions that limit in-tenancy rent increases to just once per year, and these increases must align with market rates. Additionally, Labour would introduce a ban on rental bidding wars, preventing landlords from accepting offers above the advertised rent. This adds more robust protection compared to the Conservative version, which permitted annual increases but lacked specific limitations against sharp hikes designed to push out tenants.
Decent homes standard & Awaab’s law
Both the Conservative and Labour bills introduced the Decent Homes Standard for the private rental sector. However, Labour’s proposal incorporates “Awaab’s Law,” which mandates stricter timelines for addressing health hazards, such as damp and mould. Landlords would now be required to inspect reported issues within 14 days, notify tenants of planned actions within a week, and carry out repairs within 28 days unless more time is needed. The Conservative version did not include these specific timelines, making Labour’s approach more tenant-focused in ensuring timely property maintenance.
Landlord database & ombudsman scheme
Labour’s Renters’ Rights Bill would also introduce a mandatory private landlord database and the requirement for landlords to join an ombudsman scheme. The database aims to enhance transparency by tracking landlord compliance and penalties, while the ombudsman would provide an accessible way for tenants to resolve disputes. This aligns the private rented sector more closely with the social housing model’s regulatory standards.
Impact on the Rental Market
These reforms would offer a significant boost to tenant security and affordability. The abolition of Section 21 means tenants no longer need to fear sudden evictions without a valid reason, and limits on rent increases would provide greater financial predictability. The introduction of Awaab’s Law would ensure that landlords must address unsafe living conditions quickly, greatly improving the quality of rental housing. However, there are potential downsides, as the increased regulatory burden on landlords could reduce the supply of rental properties, making it harder for tenants to find homes and potentially increasing rents for new tenancies.
While the bill introduces more stringent regulations, there are still clear eviction grounds, such as rent arrears and anti-social behaviour, providing landlords with predictable avenues to regain possession. Though rent increases are restricted, landlords can still adjust rents annually in line with market conditions. Meeting the Decent Homes Standard may also improve property desirability, potentially reducing vacancy periods and attracting quality tenants. However, the need to comply with these new regulations, such as joining a landlord database and adhering to strict maintenance timelines, may increase administrative burdens and financial pressure, leading some landlords to leave the market.
These changes bring challenges but also opportunities for landlords to elevate their service standards, align more closely with tenant needs, and contribute to a more transparent rental market.
While these reforms are intended to stabilise the rental sector, this might impact supply and could lead to higher rents for new tenancies in the medium to long term if rental stock decreases significantly.
In summary, the Labour Renters’ Rights Bill represents a significant shift towards stronger tenant protections and stricter regulatory requirements for landlords. While these changes could enhance living conditions for tenants and build a fairer rental system, they also place additional responsibilities on landlords, who would need to adapt to this new landscape. As always, staying informed and proactive in addressing compliance requirements will be key for landlords navigating these changes.
Allison Thompson is national lettings managing director at Leaders Romans Group (LRG)