Updates to the Renters’ Rights Bill: what do they mean for tenants and landlords?

The Renters’ Rights Bill is in the committee stage in the House of Lords and predicted to be enacted this year. As it nears approval, several key updates to the Renters’ Rights Bill have been proposed. What do they mean for landlords and tenants? Our property litigation specialists explain.

After announcing their intention to introduce a new Renters’ Rights Bill during the King’s Speech last year, the government have proposed several updates to the Renters’ Rights Bill to provide greater stability and fairness for tenants, offering protections against unfair practices and promoting a more balanced rental system.

Some of the significant amendments include caps on advance rent payments, changes to guarantor liability, revisions to fixed terms and the expansion of Rent Repayment Orders.

What do landlords and tenants need to know about the key updates to the Renters’ Rights Bill?

Caps on Advanced Rent

The Renters’ Rights Bill proposes limiting the amount of advanced rent landlords can request. Under the new provisions, advanced rent payments will likely be capped at no more than one month’s rent. This change seeks to ease financial pressure on tenants who may otherwise be asked to pay large sums up front. However, there are concerns that this could reduce housing availability for vulnerable groups, such as self-employed tenants or those without a UK-based guarantor. This may also offer less security for landlords.

Guarantor liability changes

Many tenants rely on a guarantor, usually a family member or friend, especially if they have limited financial history or a low credit score. The proposed amends to the draft Bill introduces a significant change in that guarantors may no longer be held responsible for unpaid rent if the sole tenant passes away. Landlords may need to consider alternative options, such as taking out insurance to cover this risk.

The future of fixed term tenancies

The Renters’ Rights Bill addresses the issue of fixed-term tenancies. Under the current proposal, fixed-term tenancies will be largely abolished, but tenancies exceeding seven years (previously subject to the Bill) would be exempt. The Government is now expected to extend the length of tenancies that are exempt to twenty-one years. This adjustment aims to prevent landlords from circumventing the law by offering long exempt tenancies with break clauses.

Expanded Rent Repayment Orders

In situations where landlords violate housing laws or fail to provide a safe and habitable living environment, the rent repayment order provision in the Renters Rights Bill gives tenants a means to reclaim rent. This is being extended to allow tenants to seek Rent Repayment Orders against a superior landlord even if the rent is not directly received from them. This extension broadens the scope of accountability, meaning that more landlords will likely be held responsible for failing to meet legal requirements and so landlords need to be clear on their obligations to best protect them.

In conclusion

Updates to the Renters Rights Bill suggest that it is seeking to balance the power dynamic between landlords and tenants. With provisions on advanced rent caps, guarantor liability, fixed-term leases, and rent repayment orders, the bill aims to offer tenants greater protection and financial security. Naturally, this may cause some concern for landlords. However, there are also lots of positive reforms for landlords, such as new grounds for recovering possession.

If you’re a landlord concerned about these upcoming changes, our experienced team is here to help you navigate the new regulations and ensure you’re properly prepared. Please don’t hesitate to get in touch with one of our expert property litigation solicitors.

Our property litigation experts are highly rated and deal with property disputes for a wide range of landlords and tenants.