During the King’s Speech in July, the new Labour Government set out its plans for various reforms within the private rented sector.

Whilst nothing has been set in stone so far, and is unlikely to be in the immediate future pending parliamentary debate and ultimately Royal Assent, both historically known to take some time, what we can talk about are the proposed Labour Party landlord policies that are set to impact private landlords, including the latest on the new ‘Renters’ Rights Bill’.

What is the Renters’ Rights Bill?

One of the biggest UK rental market changes under the Labour Government is set to be the Renters’ Rights Bill.

The Bill has been proposed with a view to provide “greater rights and protections to people renting their homes, including ending no fault evictions, and reforming grounds for possession”. However, it has to date been subject to a great deal of media speculation.

So is there anything so far that has actually been confirmed? Let’s explore exactly what was included in the briefing notes to the King’s Speech, as well as what has been confirmed to date by Housing Minister Matthew Pennycook.

Abolition of Section 21 ‘no-fault evictions’

One of the most resounding elements of the pre-election Labour Party manifesto had to be its promise that it would abolish Section 21 evictions ‘immediately’, and this is set to be one of the changes brought about by the Renters’ Rights Bill.

Of course, an immediate move of that nature would be pretty much impossible, given the fact that it would require a change in the law via the usual parliamentary route, and that the draft Bill is yet to materialise.

Even if that were to happen following the summer recess of parliament in early September, there is little likelihood, according to industry commentators, that it would see Royal Assent before at least late spring 2025.

However, it is still worth exploring how doing away with Section 21 evictions would impact private sector landlords.

What is a Section 21 no-fault eviction?

Section 21 of the Housing Act 1988 allows private landlords to recover possession of their rental property by serving at least two months’ written notice to the tenant, advising that they wish to end the tenancy.

The eviction is known as ‘no fault’ because landlords don’t need to provide a reason as to why they want the tenants to leave.

Landlords are not permitted to serve a Section 21 notice during a fixed term tenancy unless there is a break clause. There are also certain conditions that must be met by the landlord when serving a Section 21 notice.

How will things change under the Renters’ Rights Bill?

The briefing notes to the King’s Speech in July stated they will “abolish Section 21 ‘no fault evictions’, removing the threat of arbitrary evictions and increasing tenant security and stability. New clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to”.

It is therefore probable that at least some of the new Grounds for Possession that were set out in the Conservative Party’s Renters Reform Bill will appear in the Renters’ Rights Bill.

For example, the Renters Reform Bill introduced a new Ground 1A which would allow landlords to recover possession if they wished to sell their property. However, the Bill said that landlords would be allowed to evict tenants on this basis after the first three months of the tenancy, whereas Labour Party landlord policies would likely see that rising to 12 months, if their proposed amendment to the Renters Reform Bill is anything to go by.

Why are landlords concerned about the abolition of Section 21 evictions?

Being unable to terminate a tenancy agreement with two months’ notice without need to give a reason will represent one of the biggest UK rental market changes in many years.

Even with the expanded Section 8 Grounds for Possession set out in the Renters Reform Bill, and the promised enhancements to the county court system, many landlords have expressed their concern that they may be stuck with unsuitable tenants.

Without Section 21, landlords would need to go down the Section 8 route in order to evict tenants. This can be very restrictive, as it only allows landlords to commence eviction proceedings under certain grounds. And wishing to sell the property is currently not one of them.

The Conservative Party’s Renters Reform Bill added flexibility to Section 8 by increasing the Grounds for Possession, including allowing them to evict tenants if they wanted to sell the property.

We do not yet know, however, whether the new Labour Party landlord policies will include any or all of the proposed new Section 8 grounds in the Renters’ Rights Bill.

Allowing tenants to challenge rent increases

The Renters’ Rights Bill will “empower tenants to challenge rent increases designed to force them out by the backdoor”.

There is nothing specific contained in this statement, and nothing concrete appears to have transpired to date.

Looking back at the Renters Reform Bill, it was set to remove landlords’ rights to include rent review clauses in tenancy agreements, instead forcing them to use the statutory process in Section 13 of the Housing Act 1988. Tenants are already able to use this process to challenge any rent increase that is above market rent.

When The Rt Hon Mrs Kemi Badenoch, Conservative MP for North West Essex and Shadow Secretary of State for Housing, Communities and Local Government, asked Housing Minister Matthew Pennycook whether there were to be any Labour Party landlord policies around restrictions on rent increases or other rent controls in the private rented sector, Matthew Pennycook replied, “The Government does not support the introduction of rent controls. We have made clear that we intend to use the Renters’ Rights Bill to provide tenants with greater protections against unreasonable within-tenancy rent increases.”

Again, there is no clarity over whether the new Bill will provide tenants with greater protection against unreasonable rent increases over and above the current Section 13 process.

Bringing an end to rental bidding wars

The King’s Speech briefing notes included mention of the introduction of “new laws to end the practice of rental bidding wars by landlords and letting agents”.

During its parliamentary debate period, the Labour Party requested that the Renters Reform Bill be amended to forbid landlords and letting agents from “inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises”.

This amendment would not prevent a tenant bidding over the asking price, however, providing the letting agent or landlord didn’t advise them to do it.

It is not yet clear whether Labour Party landlord policies will include such a rule, but industry commentators have said that having seen it in place in other countries, it doesn’t tend to work.

Pet-friendly rentals

The Renters Reform Bill was set to allow tenants the right to request a pet, and not to have that request unreasonably refused by their landlord.

The King’s Speech briefing notes covered something very similar, stating “Tenants will have the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed”.

Bringing a Decent Homes Standard and Awaab’s Law to the private rented sector

The Decent Homes Standard currently applies to all UK social housing. The Conservative Government proposed extending the Standard to the private rented sector via the Renters Reform Bill.

In the King’s Speech following the Labour Party being appointed as the current government, there was an announcement that the new Renters’ Rights Bill would concur with this proposal and would “apply a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard free – tackling the blight of poor-quality homes”.

The speech also promised that the Labour Party Bill would “apply ‘Awaab’s Law‘ to the sector, setting clear legal expectations about the timeframes within which landlords in the private rented sector must make homes safe where they contain serious hazards”.

The Decent Homes Standard sets out a number of requirements for social housing to be classed as ‘decent’. The home must:

• Meet the current statutory minimum standard for housing
• Be in a reasonable state of repair
• Have reasonably modern facilities and services
• Provide a reasonable degree of thermal comfort

Awaab’s Law obliges social housing landlords to observe strict time limits to address dangerous hazards such as damp and mould, and has formed part of the Social Housing (Regulation) Act since July 2023.

The law came about following the tragic death of two-year-old Awaab Ishak who died because of a respiratory condition caused by exposure to extensive mould in the social housing where he lived. Despite the family reporting the mould to the landlord, no action was taken to eliminate it in the three years between when it was notified, and Awaab’s passing.

Awaab’s law aims to prevent future tragedies and protect the health and safety of social housing tenants. It is likely that its extension to protect private tenants will be incorporated into Labour’s Renters’ Rights Bill.

Anti-discrimination rules

In line with the Renters Reform Bill, the Renters’ Rights Bill will make it “illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property – so no family is discriminated against and denied a home when they need it”.

Energy Performance Certificates (EPCs)

Ed Miliband, Energy Security and Net Zero Secretary, has confirmed that landlords have until 2030 to bring their rental properties up to an EPC rating of C or above, or they will be banned from renting them out.

He believes the move will help support the three million+ renters in the country facing fuel poverty. This new government impact on landlords will likely be significant, as many will face considerable challenges in making the necessary upgrades, especially when trying to insulate older properties.

The National Residential Landlords Association (NRLA) is asking the government for more information on how properties will be assessed, together with details of any exemptions and spending caps, as well as whether funding or alternative support will be made available to landlords to help them meet the improvement requirements.

Other UK rental market changes in question

There are various other points in question that are not yet confirmed:

Hardship tests for evictions

One of the most talked about potential Labour Party landlord policies in the media at the moment has to be whether a new ‘hardship test’ will be brought in for Section 8 evictions.

The tests would have to be carried out before landlords could evict tenants on any of the approved grounds under Section 8, and would have the power to ban evictions going ahead where tenants would be considered worse off if they were evicted.

There is no direct source available to verify for this claim, and it wasn’t included in Labour’s manifesto or in the King’s Speech. What’s more, making the Section 8 grounds subject to a hardship test would effectively turn mandatory grounds into discretionary grounds. This would contradict the King’s Speech briefing notes which stated that “clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to”.

However, now Housing Minister Matthew Pennycook, when debating the Conservative Party’s Renters Reform Bill, is known to have proposed a series of amendments that would have introduced such a test to three of the Section 8 grounds.

So, as yet, it remains to be seen what will come of what could spell one of the biggest UK rental market changes.

Fixed term and shorthold tenancies

Whilst the abolition of fixed term and shorthold tenancies were included in the Renters Reform Bill, there has been no reference to them so far as forming part of the new Labour Party bill.

AST trap

Another item missing from the new bill that was included in the Conservative Party’s version is the abolition of the ‘AST trap’ for leases with ground rent over £250. Neither is this mentioned in the Leasehold and Commonhold Reform Bill. It may, however, be added at a later date.

Rent Repayment Orders

Currently, tenants and local authorities can apply to the First-tier Tribunal for a Rent Repayment Order (RRO) if the immediate landlord commits at least one of seven offences. If the application succeeds, the tribunal will order the landlord to repay a specified amount of rent, which will need to be repaid, even if the offence was down to the landlord’s letting agent.

The Renters Reform Bill proposed strengthening sanctions against criminal landlords, together with superior landlords in rent-to-rent and similar subletting arrangements. Labour supported these rules, so it’s not clear as to why they are missing from the new Labour Party landlord policies released to date.

Summing up – how will the new government impact on landlords?

The proposed changes under the new Labour Government, particularly the abolition of Section 21, the extension of home standards, and EPC upgrades, indicate significant challenges ahead for private landlords.

With more regulations on tenant rights, rent increases, and property standards, navigating the rental market may become increasingly complex. Landlords must therefore stay informed and prepare to adapt to these potential shifts.

In light of these developments, ensuring your property is managed effectively is more important than ever.

With City Borough Housing’s guaranteed rent scheme, you can secure your rental income and take advantage of inclusive professional property management services, including tenant sourcing and maintenance, supporting you as the legislative landscape evolves.

Contact our team to explore how our services can help you manage these changes seamlessly, and to request your free rental valuation to discover how much you could secure for your property every month.