Renters’ Rights Bill 2025: Letting Agents Guide
3 Minutes
Everything you need to know about the Renters’ Rights Bill
The Renters’ Rights Bill is set to become law in Spring 2025, marking the most significant reform to the private rented sector (PRS) since the Housing Act 1988. This transformative legislation introduces key changes like the Section 21 abolition of “no-fault” evictions and a shift to periodic tenancies, impacting landlords, tenants, and letting agents alike.
At RA Flatt Residential Lettings, we recognise that letting agents will be at the forefront of these changes. While challenges are expected, this reform also offers opportunities to enhance your operations and strengthen relationships with your landlords and tenants.
What is the Renters’ Rights Bill?
Introduced to Parliament on 11 September 2024, the Renters’ Rights Bill aims to address affordability, quality, and security issues within the PRS. It builds upon the earlier Renters Reform Bill, abandoned in late 2024, and introduces several new provisions while strengthening enforcement measures.
The Government’s rationale for the Bill stems from concerns that the PRS provides “the least affordable, poorest quality and most insecure housing of all tenures,” despite most landlords offering good services.
Key Proposals:
- Abolition of fixed-term assured shorthold tenancies (ASTs): All tenancies will automatically become periodic.
- Limits on rent increases: Rent can only be raised once per year using Section 13 notices.
- Section 21 eviction abolition: Landlords can no longer regain possession without specific grounds.
- Enhanced Section 8 possession grounds: More robust mandatory and discretionary grounds will replace Section 21 notices.
- Ban on rental bidding wars: Landlords and agents cannot accept offers above the advertised rent.
- Introduction of a landlord ombudsman: A service to mediate disputes between landlords and tenants.
- Digital private rented sector database: A resource to increase transparency on landlord compliance.
- Decent Homes Standard: A requirement for all rental properties to meet specific quality standards.
- Anti-discrimination measures: A ban on rejecting tenants based on benefits or family status.
When Will the Renters’ Rights Bill Become Law?
The Renters’ Rights Bill passed its third reading in the House of Commons on 14 January 2025 and is now under consideration in the House of Lords. The second reading is scheduled for 4 February 2025.
Given the Government’s majority, rapid progress is expected, with the Bill likely to become law by Spring 2025.
Key Changes Explained
Tenancy Reform
All existing fixed-term ASTs will automatically convert to periodic tenancies when the Bill becomes law. For instance, a three-year tenancy signed in February 2025 will become periodic in April 2025, once the legislation is enacted.
The Government believes this change will empower tenants to challenge poor practices without fear of retaliatory eviction. However, 58.5% of tenants surveyed by Goodlord’s State of the Lettings Industry report expressed a preference for fixed-term agreements.
Rent Increases
Under the new system, rent increases will be restricted to once annually via Section 13 notices. Current methods, such as rent review clauses or mutual agreements, will no longer be valid.
Letting agents must advise landlords on the compliant use of Section 13 notices to avoid disputes.
Section 21 Abolition
The Section 21 abolition eliminates “no-fault” evictions. This is a significant shift for letting agents and landlords who valued the flexibility of these notices.
Landlords must now use Section 8 notices, citing valid grounds for possession, such as rent arrears or breaches of tenancy agreements.
Section 8 Possession Grounds
The Bill introduces additional mandatory and discretionary grounds for eviction to balance the loss of Section 21. Letting agents should familiarise themselves with these changes to guide landlords effectively and avoid rejected applications.
Further Reforms at a Glance
- Rental Bidding Ban: Offers above the advertised rent are prohibited.
- Awaab’s Law: Strict timeframes for addressing issues like damp and mould apply to private rentals.
- Pets in Lets: Tenants can request pets, and landlords cannot unreasonably refuse, though they may require insurance.
- PRS Database: Provides transparency on landlord compliance, including banning orders and past enforcement actions.
- Anti-Discrimination Measures: Ensures fair access to housing for tenants on benefits or with children.
How to Prepare for the Renters’ Rights Bill
Educate Landlords
One of the most important steps is keeping landlords informed about their evolving responsibilities. The Renters’ Rights Bill introduces significant changes, including the abolition of fixed-term tenancies and new compliance requirements. Proactively educating your landlords will ensure they are well-prepared and avoid costly misunderstandings. Providing regular updates through newsletters, webinars, or personal consultations can make a big difference in maintaining trust and clarity.
Update Tenancy Agreements
The shift to periodic tenancies will require letting agents to update all tenancy agreements to reflect the new legal framework. This includes ensuring that current fixed-term agreements seamlessly transition into periodic arrangements once the legislation becomes law. Taking the time to review and amend agreements now will minimise disruption and keep your agency compliant.
Streamline Rent Increase Processes
Under the new system, rent increases will only be allowed once per year using Section 13 notices. Letting agents will need to adopt efficient tools and processes to manage these notices accurately and in compliance with the law. By streamlining rent increase processes, you can protect your landlords from potential disputes while maintaining a professional service for tenants.
Stay Compliant
The introduction of a private rented sector (PRS) database and stricter enforcement measures will require letting agents to ensure full compliance with all regulations. Working with a trusted PRS compliance partner can help you navigate requirements like database submissions and maintain high operational standards. Staying ahead of these changes will reduce the risk of penalties and improve transparency for all stakeholders.
Embrace Technology
Automation is essential for adapting to the complexities of the Renters’ Rights Bill. Using digital tools can save time, reduce errors, and streamline key processes such as updating tenancy agreements, managing rent increases, and tracking compliance requirements. Leveraging technology will also enhance your ability to deliver a seamless and professional experience for landlords and tenants alike.
