Renters Right Act explained – six key changes to rentals

The act will introduce six key changes to the way renting works in the UK, affecting both renters and landlords.

The new law also introduces tougher enforcement powers for councils, with fines of up to £40,000 for landlords who break the rules, ensuring that rogue operators can no longer evade accountability.

These changes are:

1. Prevention of rent ‘bidding wars’
2. Changes to up-front rent requirements
3. Abolition of ‘no-fault’ evictions
4. An end to fixed-term tenancies
5. More rights for people’s pets
6. An increase in necessary notice periods

The changes will affect all tenants and all renters throughout the country (Image: Newsquest)

1 – Bidding Wars

The new act will discourage bidding wars on rental properties by making it illegal for landlords to request, encourage, or accept offers above the set price.

Renters outbidding one another for the same property drives rental prices up – this change is intended to do the opposite.

2 – Up front rent

The Renters Rights Act will prevent landlords from asking for more than one month of rent upfront.

Up until April 30, Landlords could ask for five weeks’ rent upfront on properties up to an annual rental value of up £50,000, and six weeks for properties with an annual rental value of more than £50,000

3 – Abolition of ‘no-fault’ evictions

Until May 1, landlords could present tenants with section 21 ‘no-fault eviction’ notices.

This gave landlords the right to evict tenants even if those tenants had not fallen behind on rent or caused damage to the property.

4 – An end to fixed-term tenancies

Renters will no longer have to sign up for fixed-term rental contracts, meaning all tenancies will be organised as rolling, one-month contracts.

The previous industry standard was a six-month contract, in which tenants had to pay rent for a property for at least six months, with some contracts rising to one year.

Tenants will now be allowed to leave a property whenever they like without continuing to be liable for rent payments due to unfulfilled contract obligations.

5 – Pets Rights

Landlords can no longer give blanket refusals to tenants having pets.

If a tenant wants a pet, they can make a request to their landlord. If the landlord cannot provide a good reason for saying no, they must say yes.

6 – Notice period

Landlords who wish to sell a property must give tenants four months’ notice in order to give them time to find alternative accommodation.

However, this only applies to tenants who have lived in a property for more than a year. Tenants who have lived in a property for less than a year cannot be evicted by a landlord at all if the landlord’s reason for eviction is the desire to sell.

Under the new rules fixed-term contracts have become a thing of the past (Image: Newsquest)

Reactions

Reactions have been mixed to the changes, with praise levelled at the perceived increase in fairness the new rules will bring with them, but criticism of the potential confusions and complications.

“The act started under the conservative government, actually,” said Sarah Morris, a business development consultant who does a lot of work in the property market.

“It’s been a bit of a nightmare for agents to keep track of all the changes.”

Sarah believes there will be a period of confusion for both tenants and landlords before people get used to the new rules.

“I think the biggest issue will be for the smaller landlords, because despite the changes being quite widespread, a lot of people don’t seem to know about them.

“Getting the message out is important, and if people don’t understand what is changing, they need to get support.”

There are large fines for people who break the new rules, which will start coming into effect around the end of May, according to Sarah. Starting at £7,000, fines can reach up to £40,000 for repeat offenders.

Some landlords are already selling up in an effort to avoid the new strictures. I asked Sarah if any landlords had been putting last-minute eviction notices in before the new rules ban no-fault evictions.

“Yes, absolutely,” said Sarah. “I know that there were people who were doing that to get ahead of the act.

“You no longer have a fixed-term contract, so all six-month tenancy agreements will have to become ‘assured period agreements’.”

‘Assured period agreement’ is the technical term for the new type of rolling contract that landlords must offer tenants, described above in section four.

“For new tenants just getting into the rental market, they might face more stringent checks from landlords, as they know it will be harder to evict them if anything goes wrong.

“I know some people now require guarantors for all contracts, even in circumstances where they wouldn’t previously have needed them.

“Properties will be held to higher standards than previously, so tenants might see their landlords around and their properties more often for repairs or inspections.”

All landlords must sign up to the new ombudsman database, which makes it easier for tenants to lodge complaints. Failure to do so will result in fines starting from £7,000.

“Ultimately, the plan is to make it a fairer market for everyone; there’s just going to be a bit of an adjustment period.”

Bolton West MP Phil Brickell also commented: “This is fantastic news for renters.

“Around 6,190 renters across Bolton West will have stronger protection due to these reforms brought about by this Labour government.

(Image: Office of Phil Brickell MP)

“Having spoken to people across Blackrod, Bolton, Horwich and Westhoughton these reforms are long overdue.

“These reforms give more stability to renters and prevent Landlords from being able to evict people just so that they can increase their rental income by renting to someone else.”

“Too many renters in Bolton West have been living with the constant fear of losing their home through no fault of their own.

“These historic reforms will make a real difference to people locally – giving renters the security they deserve, protecting them from unfair practices, and helping families put down roots in their communities.

“I’m proud that this Labour government is delivering the biggest upgrade to renters’ rights in a generation.”

Please see the Government website for more information, which provides more details on all the points listed here.