In July 2024, Labour swept to power ending 14 years of Conservative rule.
Whilst Labour had promised sweeping change throughout various sectors, one area which is no stranger to debate is that of residential landlord and tenant law.
Since that time, the new Government has introduced the ‘Renters’ Rights Bill’ promising significant change to the private rental sector.
But what exactly is Labour proposing to change? What does 2025 hold for residential landlords?
Whilst only time will tell precisely which of the many proposed changes actually find their way onto the statute books (the Bill is still working its way through the legislative process at the time of writing), landlords would do well to take note of the following proposals which have found their way into the new Bill.
In the below article, Matthew Taylor, an Associate Solicitors in the Dispute Resolution team covers some of the proposals in the Renters’ Rights Bill.
Abolition of no-fault evictions and fixed term tenancies
The most eye-catching proposal –namely the abolition of no-fault evictions– is nothing new.
Landlords will already be well aware that the former Conservative Government had brought forward a Renters’ Reform Bill which, amongst other things, proposed to abolish no-fault evictions (or ‘Section 21 evictions’ as they are more commonly known).
Labour’s Bill makes it clear they intend to continue with such proposals, with no-fault evictions set to become a thing of the past. Instead, landlords will now have to rely on the various legal grounds used in ‘Section 8 evictions’ (typically known as the ‘fault-based route).
Tying in with this, we also have the abolition of fixed term tenancies. Instead, all tenancies will be now periodic, rolling, tenancies.
If a tenant therefore wishes to terminate this new, assured, rolling, periodic tenancy, then they will have to give at least 2 months’ notice. If landlords wish to terminate however, then –as stated– this will now have to be done under Section 8.
The amended grounds for eviction, and new requirements
The abolition of Section 21 inevitably focuses attention on the only eviction route which will now be left – namely that of Section 8.
As expected, the Bill has quite a lot to say about Section 8, and how this will be impacted. It does this by introducing completely new eviction Grounds, abolishing some of the existing Grounds, as well as amending the rest of them – including the length of the notice periods which a landlord is required to give.
Whilst the Grounds are detailed and warrant careful consideration in their own right, in essence the new Bill proposes to introduce new Grounds allowing landlords to evict tenants where they wish to sell their property, or where they/a family member wish to move into the property themselves. Caution should be exercised however, as both Grounds are subject to various conditions being met – namely that landlords cannot rely on such Grounds during the first 12 months of the tenancy, as well as a 4-month notice period being required.
Significant fining powers are also given to local authorities should any landlord try to rely on any of the new Grounds, when the reality is they are simply using it as an excuse to get rid of the current tenant, before then moving a new tenant in afterwards.
Existing eviction Grounds are also being amended as well, with the main amendments concerning instances where tenants have fallen into rent arrears. Whilst the current threshold for most rent arrears is that they must be at least 2 months’ worth in amount, the Bill proposes to increase this to 3 months’ worth. Likewise, landlords will then be required to give a 4-week notice to tenants, in place of the current 2-week notice period.
A new requirement also being introduced across the board for all eviction Grounds concerns instances where a tenant has paid a deposit. Previously, it was the case that a landlord had to protect a deposit within 30 days of receipt if they wished to serve a Section 21 notice, as well as having ensured they also provided the tenant with all the relevant information regarding the deposit scheme itself. Such requirements did not apply to Section 8 notices however – until now that is.
Now, if the Bill comes into force in its current form, a landlord will not be able to serve a notice relying on a Section 8 Ground if they have failed to protect the deposit within 30 days, or where they have failed to provide the requisite information. The only way around these sanctions will be to either repay the deposit (if not protected within 30 days) or –if the deposit was protected in time, but no information was provided to the tenant about the scheme– then until such time as the information has been provided.
Other notable mentions
The Bill also introduces a raft of other proposals, the key ones of which include:
- The abolition of rent review clauses – rent review clauses are also set to be abolished, with any rental increase now having to be achieved via the existing, statutory route instead. As such, rental increases will generally be limited to once every year, with them being subject to greater risk of challenge by tenants, as opposed to a rental increase which was brought into effect under a rent review clause in the tenancy. Notably, the size of a rent payment can even be challenged by a tenant in the first 6 months of the tenancy commencing – notwithstanding they fact they had just signed a tenancy agreement agreeing to that very rental figure!
- No more rental bidding – landlords will no longer be allowed to engage in rental bidding, which saw potential tenants competing against each other by putting forward their own offers concerning how much rent they would be willing to pay each month. Now, landlords must set down a fixed, specific sum for the rent, and stick to it when they market the property for let.
- No discrimination against those with children, or those who are on benefits – in short, the Bill prohibits any form of discrimination at any point prior to a tenancy being granted (therefore including any advertising, dealing with enquiries from potential tenants, etc), as well as any term which is ultimately included in a tenancy agreement (such as one saying no children are to reside at the property).
- A new ‘landlord database’ – we also see the Bill carry over the Conservatives’ proposals to set up a landlord database, with every landlord being required to be a member of this if they want to let property. Crucially, if a landlord is not a member of this database, then they cannot serve Section 8 notices at all, nor are they allowed to market the property to let. Membership is therefore a pre-condition to being able to evict a tenant.
- Similarly, landlords will be required to become members of a redress scheme – again, landlords will be required to be members of this, otherwise they will be prevented from renting out property, or even marketing it to let. This is clearly designed to funnel potential claims by tenants away from the Courts, and instead to a scheme which will act as an adjudicator. This doesn’t seem too dissimilar from the earlier proposal by the Conservatives to introduce a Property Ombudsman.
- Extension of the ‘Decent Homes Standard’ to all private rental properties – another proposal which originally featured in Conservative proposals was that of extending the ‘Decent Homes Standard’ to all private rentals. This too has found its way into Labour’s new Bill.
At present, the Standard applies only to social housing, and was something which came to greater prominence following the sad death of two year-old Awaab Ishak from Rochdale, who died as a result of respiratory difficulties brought about by extensive mould in the social property which he and his family were living in.
This statutory Standard is now being extended to all private rentals.
Ultimately however, this is unlikely to change much. On the contrary, private landlords are already subject to the requirements of the Homes (Fitness for Habitation) Act, which was introduced in 2018, and which supplemented the existing repair duties which landlords were already subject to.
- Pets – this also carries over proposals by the Conservatives, and states that landlords will be under a duty to not ‘unreasonably withhold’ consent if a tenant wishes to have a pet in the property. Landlords will however at least be allowed to require the tenant to obtain pet insurance as a condition, so that any damage is –in theory– covered. Likewise, if the landlord’s own title is a Leasehold (meaning there is a Superior Landlord above them), then –if the superior landlord refuses consent– then the landlord generally does not have to agree to the tenant’s request.
In short then, the Bill proposes a good deal of changes – most of which, as with the Conservatives’ proposals, seem to tip the balance ever further in favour of tenants rather than landlords.
So when will all these changes come into force?
It’s here that we have another worrying difference between Labour and the Conservatives.
Initially, the Conservatives proposed having a staggered introduction. Now however, the Act indicates that it will apply across the board, with immediate effect from the moment it is passed.
The added problem with this of course is that we won’t know when the Act is passed, until it’s passed. At the moment, the Bill is currently at the ‘Committee Stage’ in the House of Lords, with there being scope for further discussions/amendments. It is expected however that it will finally become law in the Spring or Summer of 2025.
One way or another then, it is clear that 2025 will see the beginning of a new chapter in the world of landlord and tenant law.
What should landlords be thinking about?
The obvious point to take from all of this is that all residential landlords should be giving careful consideration as to what they want to do with their properties.
In that respect, whilst many landlords may feel daunted by the proposed changes, the real question which landlords should ask themselves is whether they believe the changes will actually have a significant effect on them. That in itself usually requires landlords asking themselves why it is that they want to evict tenants in the first place.
If, as many landlords find, they usually instruct a lawyer because they have a difficult tenant who is constantly falling into arrears or causing issues at the property, then the reality is that the proposed changes will probably not have a huge impact; Section 8 will still remain available as a means to evict such tenants, albeit subject to a slightly higher arrears threshold (though one which is unlikely to make much of a difference in the grand scheme of things).
Likewise, if landlords have previously sought to evict an otherwise ‘good tenant’ under Section 21 simply because they wish to sell the property, well that too is not being removed by the new Bill. On the contrary, that right in being enshrined in law, albeit again subject to certain reasonable requirements.
In this writer’s experience, many landlords have often resorted to Section 21 notices simply because it is perceived as being the ‘easier’ way to evict a tenant who is causing problems. The reality however is typically the opposite, with many landlords having overlooked the strict, technical, arbitrary requirements which accompany Section 21, and which many landlords end up falling afoul of. When it has come down to it, the vast majority of tenants have either fallen into arrears, or are making a nuisance of themselves in some form. Such behaviour has always been better suited to Section 8, given that is what that eviction route is designed for, as opposed to the rigour of Section 21.
In this sense, it could be said that the Bill’s significance on the eviction scene is unlikely to have much of an impact. It will, of course however, be up to each individual landlord to consider their own circumstances, and start thinking about what they want to do – preferably sooner rather than later.
If you would like advice regarding any of the above, please contact our Dispute Resolution Team on 01204 377600 or disputeresolution@afglaw.co.uk