The landscape of lettings law and eviction processes in England has undergone significant transformation in recent years, and further changes are on the horizon. From stricter compliance requirements to the phasing out of Section 21 notices under the proposed Renters (Reform) Bill, landlords face increasing challenges in managing their properties while staying compliant.
Read on to find out more about these changes and the changes to come.
In this blog:
- Anticipating a Growth of Selective Licensing
- Evicting Tenants
- Why it’s harder than ever
- The Eviction Process
- Renter’s Rights Bill
- Evictions after the Bill passes
- Tenancy Agreements
- Further Protection from Discrimination for Tenants
- New Regulatory Measures for the Private Rented Sector
- Status of the Bill
- What does this mean for our Clients?
Anticipating a Growth of Selective Licensing
Late last year, General Approval for Selective Licensing Schemes came into force.
Introduced in 2006, Part 3 of the Housing Act (2004) gave Local Authorities the ability to adopt Selective Licensing Schemes within a defined area, such as their district or an area within their district. The aim of the scheme is to enable Local Authorities to take greater actions to address problems in the private rented sector.
Landlords with properties within a scheme area must:
- Apply for and fund the licence
- Comply with the conditions set out in the license.
Previously, Local authorities had to obtain confirmation from the Secretary of State for Housing and Communities before implementing a selective licensing scheme of any size. This step in implementing a selective licensing scheme has now been removed. This is likely to lead to wider adoption of Selective LIcensing schemes across England.
Jennings & Barrett have been managing Selective Licensing properties since London Borough of Bexley’s adoption of Licensing in 2018. Find out about our Selective Licensing services here.
Evicting Tenants is Harder Than Ever – But Will Get More Complicated
Since 2020, evicting tenants has become more complex and resource-intensive, requiring increasing amounts of evidence, higher levels of scrutiny from courts, and more challenges from tenants. The halting of evictions during the COVID-19 pandemic created a backlog for courts, which is still affecting the speed of evictions in process at the moment as delays occur with:
- Receiving court dates for hearings;
- Receiving the necessary paperwork to hire bailiffs following evictions
The process for, and the grounds under which the, eviction of tenants can occur, are changing. Find out more about these changes under our explanation of the Renter’s Rights Bill.
The Eviction Process:
1. Due diligence and compliance ahead of notice provision to tenants:
Currently, tenants can be evicted by a Section 21 Notice (for no-fault evictions) and a Section 8 Notice (for fault-based evictions). To issue either, Landlords must provide evidence of:
- Valid EPC and Gas Safety Certificates – which can be complicated in cases where tenants have failed to provide the access required for these certification checks to occur;
- How to rent guide being provided – we provide these to tenants upon their move-in to properties.
- Deposit protection compliance – this must be completed, and the evidence provided to tenants, within 30 days of the deposit being paid.
Once serving the notice, either a certification of notice form must be completed, detailing all the defendant (your tenant(s)), the documents served (which must also be attached when the form is submitted), details of how they were served.
A Section 21 notice has a notice period of two months. A Section 8 notice has a between 2 weeks’ and 2 months, depending on the fault that has occurred.
2. Application to courts for an order of possession
Where tenants fail to leave the property following the notice period, we must then apply for an order of possession through the local court. The process differs according to whether you wish to claim back unpaid rent.
Claiming back unpaid rent via Standard Possession Order
This application costs £355 and can be completed online. It will likely be followed by a court hearing, and judges can rule against a Landlord if they fail to be satisfied by any of the above listed evidence.
It is most likely that a court hearing will be required to get the order granted. The current delay in court proceedings can mean that the value of receiving the unpaid rent is discounted by a longer period of that tenant remaining in your property.
Accelerated Possession Order for Faster Results but no Claim Back of Rent
There are many cases where it might be a more appropriate choice to cut your losses to achieve a faster possession order. This can enable you to get your tenant out faster and avoid even longer periods without a paying tenant.
To apply for this form of possession order, the N5B must be completed and sent via post to the nearest applicable court. An accelerated possession order will cost £275 per application.
There will is usually no court hearing for Accelerated Possession Orders. Instead, the court will provide your tenant with a copy of the application and they will have 14 days to object to the case.
The new Renter’s Rights Bill will remove the ability to evict tenants with Section 21 Notices.
Renter’s Rights Bill
In addition to the above complications to evictions, the new Renter’s Rights Bill will be enforcing the following changes to mandatory grounds of possession:
- An end to the Section 21 eviction process;
- Giving all tenants a 12-month protected period from the beginning of a tenancy, during which they cannot be evicted if you wish to repossess or sell your property;
- An increase from two months’ notice to four months’ notice, for evicting tenants after these 12 months if you wish to repossess or sell your property;
- Rent arrears amount to at least 3 months’ (previously 2), both at the time of the notice being served and at the time of the possession hearing.
Under discretionary grounds for possession, eviction can be achieved between 2 – 4 weeks for:
- Rent arrears of any amount
- Persistent delayed rent payments
- Breach of tenancy
- Deterioration of property or furniture caused by the tenant.
Anti-social behaviour can be proceeded on immediately, and severe anti-social behaviour can be treated under mandatory repossession grounds.
In addition to the end of the above changes to evictions, other changes under the bill will be:
Rental Payments:
- No more than one months’ rent will be payable in advance;
- “Bidding” on rental properties – where some agencies may encourage perspective tenants to offer above-market rent to secure a property – will be prevented.
- In the case of tenant death occurring during the tenancy, guarantors will only be responsible for paying rent to the end of the month. However, there are questions about how liability for rent would work in these cases if the tenancy is not surrendered by either the guarantor or the deceased’s estate. If the Estate does not surrender the tenancy following the death of a tenant and does not continue to make rent payments, an Order of Possession would need to be gained from the courts to restore access to the property.
Tenancy Agreements:
- An end to fixed-term assured tenancies – all tenancies will become periodic, with a tenant’s notice period becoming 2 months;
- Section 13 notices will become mandatory for rent increases;
- No more than one months’ rent will be payable in advance;
- Tenants must provide a “notice to quit the premises” when they wish to end the tenancy agreement;
- In the case of tenant death occurring during the tenancy, guarantors will only be responsible for paying rent to the end of the month. However, there are questions about how liability for rent would work in these cases if the tenancy is not surrendered by either the guarantor or the deceased’s estate. If the Estate does not surrender the tenancy following the death of a tenant and does not continue to make rent payments, an Order of Possession would need to be gained from the courts to restore access to the property.
Further Protection from Discrimination for Tenants:
A number of anti-discrimination measures for Tenants have been announced so far, aiming to make it easier for tenants with children, pets or on housing benefits to find homes within the private rental sector.
- Terms within mortgages and superior agreements preventing the letting of property to private renters with children or in receipt of benefits “will be of no effect”.
- Following the date of legislation coming into force, terms within a new insurance contract prevent the letting of property to private renters with children or in receipt of benefits “will be of no effect”.
- Tenants will become able to challenge “no pet” clauses and agreements. However, landlords can require tenants to have insurance covering pet damage or to require tenants to pay the cost of the insurance if the landlord purchases it on their behalf.
It should be noted that overcrowding prevention standards and standards on children and genders sharing bedrooms cannot be breached, and so there is no indication within the bill that Landlords will have to accept families that are too large for the property they’re applying for.
New Regulatory Measures for the Private Rented Sector:
- The creation of a Private Rented Sector Database, paid for by Landlords.
- The creation of a new Private Rented Sector Landlord Ombudsman Service. All private landlords in England with assured or regulated tenancies must join the service.
- Tenants can use the service for free to complain about actions they disagree with. Failure to join will result in charges.
- Tenants will also be able to seek redress for harm or inconvenience caused during the pre-letting period or at the end of the tenancy.
- It is highly likely that the new database and ombudsman service will lead to an increase in the resources required for tenancy management.
- Introduction of a new Decent Homes Standard and extention of Awaab’s Law, preventing unscrupulous landlords from keeping tenants in unsafe homes.
- Councils will have increased power to collect and retain revenue for enforcement work from financial penalties against Landlords.
Status of the bill and timelines
At the time of publishing, The Right to Rent bill has completed three of the five stages of its descent through the House of Commons. Once the full five stages are complete, it will need to go through additional scrutiny – another five stages – in the House of Lords before, finally, going through consideration of amendments and receiving Royal Assent. It’s usually two months between an act between a bill receiving Royal Assent and becoming law. However, this can vary.
Changes will likely occur within the bill before it becomes law, though it is still advisable to be aware of what the bill intends to achieve.
The bill was originally introduced by the Conservative Government in May 2023 as The Renters (Reform) Bill. It was then shelved ahead of the 2024 general election. In September 2024, the Labour Government introduced the bill to Parliament again, fulfilling their manifesto commitments.
What does this mean for Landlords using our Fully Managed services?
With over 115 years in providing property services, our experience has led us to believe that, in general:
- Current regulation of many elements of the property sector are inappropriately or insufficiently regulated, creating distrust;
- Regulation of properties in the Private Rental Sector is generally a positive development for both tenants and those Landlords who perform a service via their safe, comfortable and compliant homes;
- We are aware of some tenants who use existing measures, such as stricter arrears clauses in law or free-to-access ombudsman schemes to create nuisance. This erodes conditions and trust for other tenants. There should be measures to protect Landlords and Agents from those actors who prove to continuously raise unfounded ombudsman cases to deter this behaviour.
- Changes to the law on Rental Bidding will create more transparency for tenants looking for new homes, but might lead to a rise in rent prices from the start of the marketing process across the market.
- This will, ultimately, create additional workload and costs for Landlords and Agents alike.
- The housing crisis disproportionately affects tenants and this legislation does not offer effective solutions to the crisis. The complications that this bill creates may also backfire on those tenants that they’re trying to help – for example, housing benefit recipients will always be two months’ in arrears. In many cases, this will likely prevent housing benefit applicants from being the most appropriate tenant for a property.
- Landlords can find loyal and trustworthy rent-paying tenants better, avoiding costly void periods and damage, when they offer comfortable homes at appropriate rents – This bill will not change that.
As Lettings Management Agents, we will always aim to decrease the amount of administration and processes that add to the workload of our clients. As with our Selective Licensing services, where we can take responsibility for certain elements of compliance from our Clients, we are happy to provide this service. The bill is, as yet, unclear on what elements of the new regulatory matters we can provide for Landlords using our services.
It is highly likely that the new bill will complicated the procedures for marketing available properties, vetting appropriate tenants, and evicting tenants. We expect that many elements of Lettings Management will become more taxing. However, our job will always be to find the most appropriate tenant for our Landlords, and this will remain as our role, even after the bill is enacted.
We continue to monitor legislative changes and the property market, enacting change where it is necessary for compliance, and working with our Landlords to ensure that tenants are able to rent comfortable homes and Landlords can benefit from the services they provide.