Rental Reform Bill 2024
Following the successful Third Reading in the House of Commons on April 24, 2024, the Rental Reform Bill is now poised to proceed to the House of Lords. As we analyze its progress and anticipate what comes next, let’s examine how this bill has evolved and what this will mean to the property market in the future.
Which amendments are noteworthy?
A significant modification pertains to when tenants can give notice after acquiring an assured tenancy. The amendment stipulates that tenants cannot serve a two-month eviction notice prior to four months into the lease, effectively establishing a duration of six months in which they are prohibited from serving any such notices unless certain circumstances arise – for instance if there is severe property damage that the landlord neglects to address.
At first glance, this may appear to be a major change from the original bill that would have allowed tenants to give notice at any time during their tenancy. However, in today’s market where more and more renters are seeking longer fixed-term contracts as protection against rising rental costs negotiated upon renewal or when entering into new agreements, it is actually a much smaller revision. In contrast, current law means that tenants who sign lengthy fixed-term leases will pay the same rent for an extended period of time.
It remains to be seen whether the new law will actually result in lower living costs for tenants. The proposed bill allows landlords to raise rent once a year, which is already permitted under current laws for statutory periodic tenancies. However, there are some slight improvements in procedural rules regarding this matter in the new legislation.
No fault (Section 21) notices being abolished
Despite being promised by the Government a long time ago and highly campaigned for by housing groups, it seems that abolishing no-fault (Section 21) notices will have to wait until after an assessment of the court system’s capacity to handle possession cases is conducted once the bill officially passes.
Implementing this measure is wise as it will prevent a court system that’s already struggling and inefficient from handling more possession claims. Nevertheless, the lack of an exact timeline for the ban poses certain challenges. Additionally, the Department for Levelling Up, Housing and Communities (DLUHC) has reiterated its promise to provide six months’ notice before enforcing Section 21 notices prohibition.
What comes next?
We now possess an updated bill that has undergone the necessary steps in the House of Commons. The next course is for it to be reassessed by the House of Lords, following a repetition of activities carried out in the Commons such as first reading, second readings, etc. During this phase, any modifications introduced at previous stages will be assessed and discussed upon. Afterward, both Houses shall scrutinize and discuss amendments proposed by one another until concurrence on language tweaks is reached – referred to as ‘ping-pong’. Following consent from all parties involved with regard to text adjustments, Royal Assent will affirm passage into law.
The implementation of the bill will not be immediate. It will follow a commencement date, and certain parts of it may be introduced gradually instead of being applied to all tenancies at once. Additionally, as section 21 is abolished in its entirety, assessments of the court system’s capacity to handle these changes must first take place before any permanent bans occur.
It remains uncertain when we can anticipate the implementation of the new law. The government is dedicated to its passage before parliament disbands ahead of a forthcoming general election, for which no definitive date has been set. For updates on significant developments regarding this legislation, you may monitor its progress here and rely on us to keep you informed accordingly.
