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The rules are changing for landlords: it’s time to help them get ready, says Nicola Goldie, Head of Strategic Partnerships and Growth at Aldermore.
The Renters’ Rights Bill has cleared Parliament and is set to become law within a week or so, marking the biggest reform of the private rented sector (PRS) in a generation.
Housing minister Matthew Pennycook said in the House of Commons on 22 October that the Bill “will improve the lives of England’s 11 million private renters”.
Landlords may be less enthusiastic, but this ends years of uncertainty. Your clients have long known reform was coming. Now they finally have clarity and a clear signal that it’s time to act.
Remember, it’s not all stick and no carrot. The Bill will mean new responsibilities for landlords, but its purpose is to make renting fairer and more stable for everyone, including them. It aims to strengthen tenants’ rights and raise standards by providing landlords with a more consistent framework too.
Help your clients see this as a long-term boost to the PRS, not just red tape. And be there to help them prepare and plan with confidence.
With Royal Assent expected imminently, the Bill will soon become an Act.
Implementation timescales haven’t been confirmed and may vary between measures, with some elements coming in quickly, while others follow later. The key message for your clients is that change is coming and now’s the time to prepare.
The end of Section 21 “no-fault” evictions is the headline measure of the Bill, and arguably most challenging for landlords.
They will no longer be able to remove tenants without a valid reason. Instead, they’ll rely on updated Section 8 possession grounds, such as rent arrears or selling a property. That’s fine in theory, but landlords have valid concerns about long delays in regaining possession without reform of the already overburdened court system.
More protection for tenants will mean less flexibility for landlords, and potentially greater rental arrears while waiting for the courts.
Fixed-term agreements will be replaced with rolling, open-ended tenancies. Tenants will be able to leave with two months’ notice, while landlords must use the Section 8 process to end a tenancy.
This is a problem for student landlords who routinely use fixed rental periods. A limited exemption has been included for purpose-built student accommodation, and another for student HMOs, giving them restricted and specific grounds for possession at the end of an academic year, but smaller student properties such as one-bed flats don’t have the same right.
Landlords will only be able to raise rents once a year and will need to serve a formal Section 13 notice giving at least two months’ notice. Tenants can also challenge increases at tribunal if they think they’re above the market rate.
You can add value by helping landlords stress-test affordability, especially if they have fixed rates renewing next year and face higher repayments.
The Decent Homes Standard will apply to private rentals, requiring homes to be safe, warm and free from serious hazards such as damp or mould. Landlords will have a legal duty to meet the standard, with penalties for non-compliance.
Awaab’s Law adds strict legal timelines for investigating and repairing serious issues once reported.
Encourage clients to plan any necessary upgrades early and explore funding options.
Every landlord will have to register on a new national database and join a new Ombudsman scheme. If they don’t, they could face enforcement action or fines, and local authorities will get stronger powers to enforce the rules.
The Bill also introduces fairness measures: landlords have to consider reasonable requests for pets, can’t discriminate against tenants with children or benefits, and must advertise a fixed price rather than accept bids.
As trusted advisers, brokers are well placed to help landlords stay up to date as more details are confirmed. Signpost them to reliable sources, such as the Government’s guide to the Bill and the National Residential Landlords Association’s Renters’ Rights Bill Hub.
Even without exact timescales, there are practical steps landlords can take now, according to the NRLA, including:
• Reviewing their portfolios
• Inspecting properties and addressing any hazards
• Updating processes around referencing, advertising and complaints
• Checking that any agents they use are ready for the changes.
Encouraging these conversations early will help clients stay compliant and confident.
You’re a mortgage adviser, and that’s where you can really add value.
Look at funding solutions to help landlords prepare for higher compliance and maintenance costs. Review their portfolios and explore options, including refinancing, raising capital through a further advance, or using Aldermore’s multi-property mortgage to leverage equity across their properties to fund improvement costs.
Beyond the Renters’ Rights Bill, other reforms are on the horizon, including tighter energy-efficiency standards and a new EPC framework.
Make sure your clients know about these and encourage them to factor them into their plans. For example, if they are making property improvements to meet the Decent Homes Standard, it could save time and money to make energy-efficient improvements at the same time.
Aldermore knows the challenges that new rules bring, from funding property improvements to changing investment and borrowing strategies, and that’s on top of the extra admin.
Our specialist products and flexible approach to underwriting can help landlords upgrade or restructure their portfolios. And our commitment to brokers means we’ll continue to share insights and updates to help you guide your clients through this change.
The Renters’ Rights Bill is a massive shift for the PRS, but hopefully the start of a new era of stability. With clear rules in place and strong tenant demand, the fundamentals of buy-to-let remain strong.