Brooke Taylor, specialist property expert at Pure Property Finance, said the Renters’ Rights Bill is the biggest shake-up the private rented sector in England has seen in decades.
Taylor said: “The bill represents one of the most significant changes to the private rented sector in England that has happened in decades.
“The new bill will include the abolition of fixed-term shorthold tenancies, meaning that anyone who rents out a property now has to have buy-to-let insurance even for shorter terms.
“There will also be an elimination of ‘no-fault’ eviction under the Housing Act 1998, and landlords will only be able to regain possession of their property under defined, fair grounds.”
Taylor added: “There will also be a database of private rented sector landlords, as well as their properties, and a new ombudsman for the private rented sector.
“Tenants will also have stronger protections backing them, such as the ability to challenge above-market rent increases, a ban on rental bidding wars and a requirement to consider pets.
“There will also be more specific notice periods for tenants too, such as a 4-month notice period for when landlords are reclaiming a property to sell or to move into, and a 12-month protected period at the start of a tenancy.”
Taylor stated that all landlords, no matter the size of their portfolio, need to understand these changes.
She said: “The bill brings both opportunities and challenges. For professional landlords who already operate with sound governance, good property standards and tenant-focused management, the bill presents an opportunity to differentiate that they’re committed to high-quality and compliant homes.
“However, for a lot of landlords, the challenge may raise costs, risks and complexity, something for landlords to factor into business plans and financing.”
Taylor set out five key changes for landlords under the new bill.
Taylor said landlords will have less certainty about when they can get their property back, as fixed-term tenancies are being replaced with rolling periodic agreements.
Taylor added the new rules will block landlords from putting automatic rent increases in agreements, and bidding wars will be banned.
Additionally, Taylor said that with a new landlord database, an ombudsman, and higher property standards coming in, the overall cost of being a landlord will go up.
Taylor noted that these changes could push smaller or lower-margin landlords out of the market.
She said property valuations are also likely to be affected, as the bill makes it harder to exit, restricts income growth, and increases compliance costs.
