Renters Rights Bill - A guide

The Renters Rights Bill (RRB) is one of the most significant changes to hit the private rental sector. The new rules will require landlords with rental properties to make changes, and it is just another change for the private rented sector, which is already struggling with increased costs and legislation.

In this blog, we examine the key areas of the Renters Rights Bill and how it will affect landlords in 2025.

The Renters Rights Bill (RRB) sees some of the most significant changes to the private rented sector for a generation.

Previous governments have tried to pass the Renters Reform Bill, but it did not make it into law. The current Renters Rights Bill consists of around 95% of the previous Bill but with some tweaks and changes.

It seeks to reform the rental market, provide safeguards for tenants, and increase renters’ rights. The aim of the Bill is to stamp out unscrupulous landlords and practices in the rental market and make it a fairer playing field for all.

It includes changes around fixed-term tenancies, restrictions on rent increases, rent review clauses, avoiding rental bidding wars, and changes to possession grounds. Responsible landlords should be able to manage the changes and work with tenants to make the relationship a good one.

Experienced private landlords will understand the term fixed-term tenancies used currently. However, the Renters Rights Bill will prohibit landlords from issuing fixed-term tenancies.

Tenancies will all become periodic, meaning tenants can remain in a property until they decide to leave. To end the contract, the tenants must serve two months’ notice.

When the Renters Rights Bill comes into force, any fixed-term contracts will automatically become periodic tenancies and landlords will be required to serve notice as per above.

The Bill will make it harder for landlords to evict tenants. As part of the Renters Rights Bill, Section 21 evictions will be abolished. However, the Bill provides for Section 8 possession grounds. This means that a landlord can still regain possession of the property on certain possession grounds (see below).

Ground 1 can be used when a landlord or a family wants to move back into the property. Currently, Ground 1 will require a landlord to give notice to the tenant before they move back into the property. However, the amended version of Ground 1 removes the pre-notice requirement. This offers landlords more flexibility if there are unanticipated circumstances for the landlord.

Ground 1A can be used if a landlord wishes to sell the property.

Ground 1 and Ground 1A include a ‘prohibition period’. If the landlord re-lets the property within 12 months of the notice expiring, the tenants and local authority can claim/fine them.

Ground 4A is a new ground for possession that is designed for students.

Ground 6A gives the landlord the right to recover possession in other circumstances, such as:

• The landlord has had their HMO licence refused or revoked.

• The landlord receives a banning order or prohibition order.

• The landlord is served an improvement notice, and the property is overcrowded.

• The property is an HMO, but the property houses more people than the HMO licence permits.

Rent increase clauses are banned under the Renters Rights Bill. Landlords will only be able to raise the rent once a year and will be restricted to raising the rent only by the market rate. Rent increase clauses in current contracts will be of no effect once the Renters Rights Bill comes into force. Tenants will be able to challenge unreasonable rent increases.

A new rule has been proposed to cap advance rent payments at one month’s rent. This is to avoid landlords purposely disadvantaging potential renters on lower incomes. However, landlords can still request a security deposit of up to 5 or 6 weeks’ rent along with one month’s rent in advance.

In the future, all properties will have to be marketed with a precise rent. Landlords will not be allowed to accept any bids from prospective tenants above that rental rate. This may lead some landlords to advertise the property at a higher rental rate, allowing the scope to accept the highest bid.

This could put landlords in a difficult position if multiple bids at the capped or advertised rent are received. The landlord could be more open to a discrimination claim based on who they decide to rent the property out to.

Landlords will no longer be able to refuse a tenant based on information they have about the prospective tenants, i.e. they may have pets or children or tenants receiving benefits.

Landlords will be required to join a landlord register and provide information about themselves and the properties they rent out. This should provide transparency around the quantity and quality of rental stock in a geographic area. It will assist local authorities in clamping down on rogue landlords.

Rent Repayment Orders (RROs) currently allow tenants to claim back up to 12 months’ rent from a landlord if they have committed a housing offence, such as failure to apply for a housing licence or unlawful eviction.

The offences for RROs are being expanded to include Ground 1 and 1A evictions when the landlord re-lets the property within the prohibition period. The RROs also include the failure of the landlord to join the landlord register.

The time that a tenant has to make a claim will be increased from 12 months to 24 months from the last rent payment. The amount tenants can claim will also be increased from 12 to 24 months’ rent.

The Renters Rights Bill introduces a new process for tenants to request to be allowed pets in a property. A landlord must respond to the request and cannot unreasonably refuse pets. The term ’pets’ does have specific definitions.

There have been suggestions that The Bill will come into force in Summer 2025. The Government will aim to give as much notice as possible.

If everything goes according to the Government’s plan, progress may be as follows:

February 2025 – Second reading in the House of Lords.

Mid-February to late April – The House of Lords committee will examine the details and debate any amendments.

May – Royal Assent

Summer/Autumn 2025 - New legislation becomes law. The Secretary of State will clarify the date for roll-out.

With changes from the Renters Rights Bill, Stamp Duty Land Tax (SDLT) changes, amendments to energy efficiency rules, and licensing rules, landlords may want to take stock and consider how the combination of changes will affect them and their rental profits.

With changes happening for UK landlords and the buy-to-let market regularly, having property tax specialists who genuinely understand the property sector is crucial. There are many ways to minimise your tax bill and maximise the return on your property investment. This is where specialist property accountants and tax advisors can assist you.

Here at dns, we support and advise thousands of landlords with all their accountancy, tax and landlord needs through our expert property accountants.

Whether you’re a buy-to-let landlord, individual landlord, corporate landlord, property dealer, estate management, non-resident investor, or a second property owner looking for a property accountant, we have packages and accounting services to suit your every landlord and property need. We provide expert advice from our buy-to-let accountant as part of our accounting services.

For more help and advice, contact us today at 07424 025730, email [email protected] or book a free consultation.