What impact will the Renters Right Bill have for tenants and landlords?

As a letting agent and tenant I have watched this with interest as I will feel the impact on both sides.  Sadly, despite what the government promises, I personally do not see that it will make renting easier for tenants.  Why will it do this?

Ex-pats relocating back to the UK with no job or credit history will not be able to pay the rent in advance.  As an agent I have never suggested rent in advance unless a tenant doesn't meet the referencing criteria due to poor credit history or no credit file.

What happens for tenants that have adverse credit and no guarantor.  Landlords will no longer want to take the risk on tenants who fall into this category when landlords will only be able to pursue tenants once they are 3-months in arrears.  If a landlord has a mortgage on their Buy To Let property, plus their own mortgage they simply can't afford to take that risk.  

What has the impact been so far?  The Renters Rights Bill and the Energy Performance Rating changes has for a couple of my multiple property landlords been the final nail in the coffin that has lead them to decide to sell up.  If all letting agents are experiencing this exodus of landlords there will be fewer properties for tenants.  My landlord gave me the devasting news that he is selling up next year as he has retired.  He doesn't need the burden of the the changes coming in.

What other changes are coming in?  Landlords will need to register with the ICO, Landlord Ombudsman and Private Rented Sector Database.   The Assured Shorthold Tenancies will no longer exist and will be replaced with an Assured Periodic tenancy.  So a monthly rolling contract from the beginning.  Two months notice from a tenant and 4 months notice from a landlord.  The Section 21 non fault notice for possession will be scrapped and the Section 8 Notice for possession will be updated with new grounds for possession.  If a landlord decides to sell and gives notice to their tenant and cannot sell their property, they will not be able to re-let it for 12 months after possession was given.

Are there any consequences if you don't follow the new rules.  Yes - typically a £7,000 fine for the first breach and £40,000 for any subsequent breach.  Being fully compliant is imperative.  There are fines already in place for any breaches, but this has now been increased.  Local councils will have the authority to spot check that you are compliant.  If you are not the money from the fines will go into their coffers and so there is an incentive for them to check.

What happens if a landlord cites not knowing about the changes.  This is not a reason to be non compliant and a Judge will view this as a poor excuse.  Self-managing landlords need to invest their time to be up to date with changes and compliance.  Cutting corners can result in costing £1,000s and not worth the risk.

There are a number of other changes coming in and I will update my blog further with this information.  The Renters Rights Bill is back at the House of Lords on the 22nd April 2025 for the committee stage.  The peers will go through the bill clause by clause and discuss the proposed amendments. Then there is the Report Stage and then the Third Reading in the House of Lords.  So a little way to go yet.