What's happening with the Renters' Reform Bill?
With the end of the 2022-23 parliamentary session approaching, here's an overview of what's next for the Renters' Reform Bill.
There's ongoing debate around when the Renters' Reform Bill will be released, and the final form that it will take. Coming up to a year after the A Fairer Private Rented Sector white paper was published, Robert Bolwell, Senior Partner at Dutton Gregory, spoke about what's next for the bill in a recent Goodlord webinar - and shared what letting agents should expect in the coming year.
How long until the bill becomes an act?
Originally, it was expected within a year of the A Fairer Private Rented Sector white paper - in other words, in June or July 2023. However, as Robert outlines, it isn't as clear cut as that.
"We don't really know which date it's going to be," says Robert. "However, if we assume the end of 2023 - I would have severe doubts as to when we'll see this on the statute book before the election."
Robert then shares that the bill would normally take a year to go back and forth between parliament and the Houses of Commons and Lords. "If we do get this bill by September of this year, allowing 12 months, we could see legislation in September of 2024."
How could an election disrupt the bill?
As it stands, an election could take place by January 2025 - and that could put the future of the bill in jeopardy.
Robert explains that legislation normally comes into effect on one of two dates - either the 1 October or 1 April each year. If the bill became a parliamentary act in September 2024, it's unlikely to become legislation in October 2024. That act could become law in April 2025 - but a general election would cause disruption.
"Say we have a Labour government - a distinct possibility at the moment. If that legislation validation process is interrupted, the bill might completely fail." That being the case, the bill would depend on Labour and the government they form in 2025.
Robert gives his prediction in this situation. "If Michael Gove doesn't give us the bill until the end of 2023, I don't think it'll go through with this government in power. It might have to await the general election - and then all bets are off."
How could this affect the rent control debate?
If Labour were to come to power before the act is formalised, Labour may then choose to amend it - which could have implications for the future, Robert says.
Currently, landlords and their agents can increase rent using Section 13 of the Housing Act 1988. This allows landlords to increase rent once a year. The new bill would change that, so that rents can be increased once every two years on existing tenancies.
The white paper also rules out rent controls, but that could change under a Labour government.
"If this bill doesn't go through under the current government, and we have a change of colour in our ruling party after a general election, I don't know what the Labour government would do with a revamp or reformed bill in 2025."
How could periodic tenancies change your agency's business activities?
The bill has proposed abolishing fixed-term tenancies and replacing them with rolling, periodic tenancies. The tenancy would end when the tenant chose to move out, or if the landlord chose to regain possession of the property using a section 8 ground. However, this may affect your agency's business model.
If you charge your landlord commission at the start of a tenancy for a fixed term, this will no longer be possible once fixed-term tenancies are abolished. "That billing and cashflow model is going to have to change if this is something that your agency does."
How might the bill change for student tenancies?
The white paper initially outlined that the end of fixed-term tenancies would also apply to student accommodation. However, a cross bench committee has highlighted that many students sit in the private sector after their first year of university - and normally only stay during term time.
"The committee suggested that the whole area needs to be looked at again," says Robert. "That's whether we should retain a section 21 equivalent to make sure that we can get student accommodation back, for the PRS or purpose built accommodation, at the end of the academic year."