Renters (Reform) Bill – Where are we now?

Released On 26th May 2024

The much-publicised and criticised Renters (Reform) Bill has recently had its second reading in the House of Lords, progressing further in its path to becoming law.

The headline-grabbing Bill has promised from the outset to abolish the frequently-used Section 21 Notice/Proceedings method which enables landlords of AST tenants to recover possession of their property without providing a reason. In his latest blog update, property litigator Will Bartley takes a look at how it is developing and when we might get to see some clarity on implementation.

What is it and why is it controversial?

Critics of the Section 21 procedure have highlighted the dramatic upheaval it causes to good tenants, who have paid their rent on time and looked after the property during their occupation. This includes the Housing charity Shelter, who have lobbied consistently for the procedure’s abolition - https://england.shelter.org.uk/support_us/campaigns/renters_reform_bill

However, landlords and associated groups such as the NRLA state that a balance needs to be struck in protecting the rights of landlords. This is to ensure that there is not a mass selling-up of properties, resulting in fewer homes available for rental stock and the consequential likely rent increases that would follow. It is argued that landlords have made such claims in a bid to stop further rights to tenants being included in the Bill, leveraging their position in the market to get a ‘fair’ outcome for themselves.

Critics of Landlords have accused them of ‘holding parliament hostage’ by making such threats: Landlords 'holding parliament hostage' over threat of selling up - as peers urged to 'rescue' Renters Reform Bill | Politics News | Sky News

The Bill has therefore changed in both content, promises and delivery date since being originally announced.

When will Section 21 be abolished?

This is the golden question, that nobody seems to know the answer to. There still appears to be uncertainty as to when and how the Section 21 process will be abolished, and whether or not it will be by way of a phased-out process, or with a fixed implementation date. There are still outstanding questions as to whether it will apply to retrospective tenancies that are already in existence, or just for new tenancies entered into after a certain date.

The Government have to date been non-committal on an implementation deadline, and have since relied on statements that the Court system is in need of reform before the Bill can take its intended effect. This may be a contributing factor as to the recent Court fee increases for possession claims – to try and increase income to help fund a better-staffed and better-equipped local County Court system for Possession claims.

Commenting during Bill’s debate in the House of Lords, Housing Minister Baroness Swinburne said work is being done to help process new Section 8 possessions on new contracts as soon as possible. Further, that she will “attempt to supply a visual chart setting out indicative timelines for the Section 21 phases and the total abolition as we discuss this over the coming weeks.”

It is almost guaranteed that Section 21 Notices and resulting Proceedings will be banned at some stage, however, I would not expect that to be in the immediate near future. Given the Government’s commitment to getting the Bill passed whilst still in power, there certainly will be some changes to the landlord and tenant world this year. However, given the commentary regarding Court reforms, increased funding, landlord uncertainty and threats of selling up, I would not expect the Section 21 ban to be passed any time soon, and will most likely form supplemental legislation at a later date.

A further factor to consider is the amendment to the Section 8 process, which will make it easier for landlords to recover possession of their property for certain grounds. Reasons typically relied on in Section 8 Notices are rent arrears and anti-social behaviour. However, as a set-off or ‘sweetener’ to landlords from the Government, new changes for moving back into the property themselves or selling the property altogether will be included in the new-look Section 8.

It therefore poses the question – will banning Section 21 make any difference to tenant security? Or will landlords look to exploit the new Section 8 rules and grounds to recover possession as and when they see fit? Only time will tell on that.

We will of course provide updated commentary as the Bill continues its progression and once deadlines are implemented and announced.

Specialist Landlord and Tenant advice

Here at Porter Dodson we have a dedicated Property Disputes team who specialise in this area of law. If you are a landlord who requires assistance in navigating either Section 21/ Section 8, please feel free to get in touch with our Property Litigation Department for a free initial consultation.