The incoming changes are aimed at improving the rental market, and it is crucial for landlords to understand what is coming and how to adapt – although there is currently no official date on when these rental laws will be updated.
We look at what landlords need to know based on the latest available information from the Government, and could still change up until the bill becomes law.
1. Impact on Prime Landlords and Higher Rent Properties
It’s important to emphasise that the rental reforms are likely to have less impact on prime landlords with higher rent properties because the bill is currently expected to only impact Housing Act Tenancies, which means that all tenancies with rents over £100K per annum will be excluded. This distinction is crucial as one element that would classify a tenancy as an NHA is if the rent is over £100,000 per annum. In such cases, where the rent is considerable due to the larger property size, the reforms may not significantly alter their operations. These landlords might still maintain their ability to serve a notice to quit (NHAs are currently ended by serving a Notice to Quit, and this is expected to remain) for possession, even after the reforms.
2. Changes to Ending Assured Shorthold Tenancies (ASTs)
The rental reforms propose to eliminate the use of Section 21 notices for ASTs. For Non Housing Act Tenancies, landlords will still need to serve a "notice to quit" as they currently do. The process of ending tenancies is not expected to change for NHAs. AST tenancies will no longer be able to be ended through section 21 notices but it is expected that there will be an avenue for landlords to gain possession should they need to use the property themselves or sell the property
3. Uncertainty Regarding Tenancies Outside the Housing Act
Apart from the uncertainty surrounding tenancies outside the scope of the Housing Act, there is also general uncertainty about the reforms' implications on ASTs. NHAs are not expected to change. As details have not been confirmed, landlords are in a state of anticipation regarding the potential implications of the reforms on their specific tenancies, and the timeline for clarity remains uncertain.
4. Housing Courts and Easier Tenancy Terminations
A significant aspect of the rental reforms is the introduction of specific housing courts to streamline the process of gaining possession of properties. This move aims to address the long-standing challenge of obtaining court dates, making it easier for landlords to regain possession of their properties when necessary. Contrary to some media portrayals, the reforms aim to facilitate the ending of tenancies rather than complicating the process where there has been a breach of contract. Exact details as to how this will operate are yet to be confirmed.
5. Stronger Rules for Dealing with Contract Violations
While the focus on no-fault evictions has drawn considerable attention, the reforms also aim to implement stronger rules for landlords to deal with tenants who breach their contracts. By ensuring that contracts are respected, the reforms aim to maintain the quality of rental properties and uphold the rights and responsibilities of both landlords and tenants.
While the media has primarily focused on the concerns surrounding no-fault evictions, the broader context of the rental reforms is to improve the overall quality of the rental market. The establishment of housing courts, particularly, is a step toward a more efficient and transparent system.
Head of Lettings