The Renters Rights Bill will abolish many regulations which we have been accustomed to and governed by during much, if not all, our time as landlords and agents. In this, our bi-annual update, we will focus primarily on its implications. We include a more detailed summary of the main areas for you to be aware of and, crucially, what we can do to help guide you through. Whilst the changes may seem overwhelming, BCM Wilson Hill are here to support you during this transition, focusing on compliance, and mitigating challenges. As the Bill passes into law over the next few months, our aim is to provide you with a clear picture of the changes and the actions that may need to be taken in advance or once the law is passed. The Bill will next enter the committee stage in the House of Lords in April where over 50 pages of amendments will be considered.
Many of you will have come across an array of dramatic headlines over the past few months, most notably on the abolishing of Section 21 notices. As we have noted in past updates, arguably, the current system is not functioning well and ultimately there will still be mechanisms for regaining possession under Section 8 notices. In our view, the key point which the Government has sadly missed, is prioritising and ensuring we have a court system that is fit for purpose and can cope with the demands.
In other news, we are closely watching the situation with MEES (Minimum Energy Efficiency Standards). With the drive towards net zero, the Government has set ambitious targets for new rentals to be a C rating or above by 2028, with all existing tenancies required to hit the same target by 2030. The proposal is for a £15,000 spending cap per property (currently, the cap is £3,500), with exemption certificates then lasting for 10 years (currently 5). Whilst for many, the target of a C rating is not achievable, the spending cap proposal is the main concern. Our hope is that this will be reduced, as there will be many rental properties, especially in other areas of the country, which will become economically unviable. Propertymark have recently commissioned a survey of members with alternative suggestions as to the appropriate levels and will be lobbying Government on this.
In preparation for the changes, we have engaged with our EPC assessor, who is going to be able to produce a detailed assessment for a property, which will show the most cost-effective improvements to undertake, and which ones will make the most difference. If you would like more information on this and to discuss how it might help, please do contact us.
Market Insight
On a cheerier note, the market in general still seems to be in good shape. Spring is in the air and there remains plenty of people searching for a country home to rent. With the changes expected to legislation, this is likely to also further reduce supply in the private rented sector, which will ultimately lead to greater demand for houses. As a result, we see no sign of the market softening and there is a good argument to suggest we could see it heading in the opposite direction. Take a look at our current listings.
As ever, if you would like any further advice on any aspect of your rental property, please do contact us and we would be delighted to assist you.
Summary: Renters Rights Bill
The main current proposals are as follows:
Assured Shorthold Tenancies (ASTs) will be abolished
- Properties will be let under rolling Assured Tenancies whereby tenants can give two months’ notice at any time
- With 4 million tenancies under the private rented sector, it has not yet been confirmed whether new tenancy agreements will need to be drawn up, or whether existing contracts can remain with some clauses null and void
Our expert knowledge within a team of highly experienced and qualified staff will ensure any changes are actioned smoothly and are compliant. We will be up to date with all aspects of the Renters Rights Bill in advance of the new regulations.
The end of Section 21 notices, and a reform of Section 8 notices
- No fault evictions will be banned, with landlords only able to rely on grounds of a Section 8 notices for eviction
- Grounds include rent arrears, selling the property, a landlord or family worker moving into the property, or the property is required for an agricultural worker
- Many of the grounds will be unavailable within the first 12 months, with minimum notice periods rising to 4 months’ notice
- The court system will be reformed, and accelerated possession orders will be scrapped
We understand the importance of finding the best tenants for your property, using only our staff for viewings and our in-house referencing system. We will be well versed on the grounds available to you as a landlord, ensuring notices are correctly served and are compliant. We understand that clear communication with tenants is crucial for managing tricky situations and avoiding disputes.
Rent increases
- Rent can only be increased once per year using a Section 13 notice and are capped at market value
- If a tenant disputes an increase they can go to a tribunal
Landlords must optimise rental income whilst maintaining good tenant relations. We carry out annual rent reviews on all our managed properties ensuring increases are carried out timely and are in line with market trends. We also offer property and rental reviews to all new and existing clients.
A ban on bidding wars and rent in advance
- Landlords will only be able to agree rent at the advertised value or less, effectively banning bidding wars. All costs in addition to the rent must be listed in advertising e.g., water charges
- A maximum of one month’s rent in advance can be accepted: lump sums of rent will be banned. This will disadvantage tenants who may fail referencing checks, for example because of short-term self-employment, and have no choice but to offer rent in advance
Our in-house, thorough referencing procedures aim to highlight any risks prior to agreeing tenancies. The proactive and problem-solving accounts teams here at BCM Wilson Hill are well informed of the forthcoming changes and will continue to work with landlords to solve any unforeseen issues which may arise.
A new landlord database and ombudsman scheme
- All landlords and properties will need to be registered on a national database. The database will include all property information, such as energy performance certificates and gas safe certificates, and must be kept up to date
- In addition, there is also talk of a new ombudsman scheme on which all landlords will need to register
Compliance is our priority, and we will ensure all our managed properties are registered on the databases. We will also offer this service to existing and new clients who can trust us to oversee the compliance of their properties.
Should you like to discuss this further, please do not hesitate to contact us.
