From Section 21 being banned immediately, to new powers for tenants - the Labour Government has released the Renters’ Rights Bill. Here’s everything letting agents need to know.
The Labour Party has introduced the Renters’ Rights Bill into Parliament - a process known as ‘first reading’ which took place on 11 September 2024.
This bill is Labour's version of the previous government’s Renters (Reform) Bill, a significant piece of housing legislation that did not pass before Parliament was dissolved for the general election.
The Renters’ Rights Bill includes similar elements to the Conservative Renters (Reform) Bill, such as the abolition of Section 21 no-fault evictions and the inclusion of pets in rental agreements. However, Labour has introduced new reforms, such as extending Awaab’s Law, which requires social landlords to address mould and damp issues within 14 days, to the private rental sector, as well as giving tenants more power to end rental bidding wars.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, commented: “Having met with the Housing Minister, it is clear that these reforms aim to overhaul private renting in England. These have been long-held commitments from Labour, and the new government is using its mandate for reform.”
Detailed scrutiny and discussion of the bill is expected after Parliament returns from recess on 7 October.
Here’s what the bill includes and what letting agents need to know:
- When will the Renters’ Rights Bill become law?
- Abolishing Section 21 ‘no-fault’ evictions
- Strengthening tenants’ rights and protections
- Pets in lets
- Applying a Decent Homes Standard
- Applying ‘Awaab’s Law’
- Digital private rented sector database and property ombudsman
- Illegal for landlords to discriminate against tenants who receive benefits
When will the Renters’ Rights Bill become law?
The Renters’ Rights Bill is in the early stages. The first reading took place on 11 September, but the bill will need to progress through both the House of Commons and the House of Lords before it can become law.
However, the Renters’ Rights Bill is likely to pass through significantly quicker than the Renters (Reform) Bill, due to it being a Labour manifesto commitment and the party’s large parliamentary majority. Housing Minister, Matthew Pennycook stated, “We hope [the bill] will make very quick progress through the House of Commons and that we have that new tenancy system in place within the first half or around summer next year."
Download our key takeaways for the Renters' Rights Bill
Abolishing Section 21 ‘no-fault’ evictions
The abolition of Section 21 no-fault evictions has been a hot topic for years. Labour’s Renters’ Rights Bill aims to finally eliminate this option, increasing tenant security and stability.
The abolition will apply to both new and existing tenancies, providing immediate protection to private renters. There is some concern from letting agents, as it will mean great changes to managing evictions within the private rental sector.
However, one concern is whether the courts will have the resources to handle the expected increase in cases. So far, there has yet to be any mention of reforms to the judicial system to address this issue.
Guy Guttins, CEO of Foxtons, commented on the ban saying “It remains to be seen as to whether the court system is adequately prepared to deal with the ban on Section 21 evictions, or how the government intends to police changes to asking rent requirements.”
This week, Housing Minister Matthew Pennycook, stated the government hopes “a ban on evicting tenants in England without a reason will be in place by next summer”.
Strengthening tenants’ rights and protections
The bill aims to empower tenants by allowing them to challenge rent increases and end rental bidding wars. Landlords and letting agents will be legally required to publish an asking rent and will be banned from accepting offers above this price.
While this is intended to protect tenants, landlords have warned that rent caps in high-demand areas could push the private rental sector towards an “Airbnb Lite” model.
Deputy Prime Minister Angela Rayner stated that this element of the bill is to benefit tenants: “Most landlords act in a responsible way but a small number of unscrupulous ones are tarnishing the reputation of the whole sector by making the most of the housing crisis and forcing tenants into bidding wars.”
Landlords will also be limited to raising rents once a year, and only to the market rate.
Pets in lets
The Renters’ Rights Bill will give tenants the right to request a pet both before and during a tenancy.
The Renters’ Rights Bill will ensure that landlords must consider and cannot unreasonably refuse a tenant’s request for a pet.
However, similar to the Renters (Reform) Bill, landlords and letting agents can also be able to request insurance to cover potential damage from pets if needed.
Applying a Decent Homes Standard
The bill introduces a Decent Homes Standard to ensure that all private rental homes are safe and hazard-free, addressing the high number of substandard homes in the sector.
If the bill passes, it’ll be the first time there will be a standard for the private rental sector. According to the government “21% of all privately rented homes are considered non-decent, and more than 500,000 contain the most serious of hazards”.
Landlords who fail to address these hazards can be fined up to £7,000 by local councils and may face prosecution for non-compliance.
Download our key takeaways for the Renters' Rights Bill
Awaab’s Law
Awaab’s Law has already been introduced into the social housing sector as part of the Social Housing (Regulation) Act. Now through the Renters’ Rights Bill, the law will extend to the private rental sector.
Awaab’s Law will mean that landlords must follow strict timescales to inspect and repair hazards, such as damp and mould.
The government has claimed that the introduction of this law will “ensure that all renters in England are empowered to challenge dangerous conditions”.
Digital private rented sector database and property ombudsman
A new digital database will provide tenants with crucial information to make informed decisions when entering new tenancies. It will also help landlords and agents stay compliant, and councils will be able to focus enforcement efforts where they are most needed.
The bill also introduces a new Property Ombudsman, offering a fair and impartial resolution service to settle disputes without the need for court involvement. This mirrors similar proposals in the Renters (Reform) Bill.
Illegal for landlords to discriminate against tenants who receive benefits
The bill will outlaw blanket bans on tenants with children or those on benefits, ensuring fair access to housing. This is now an integral part of the legislation after being added to the Renters (Reform) Bill during its committee stage, and is a key priority for Labour “to ensure fair access to housing for all”.
This article is intended as a guide only and does not constitute legal advice. Visit gov.uk for more information.
