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What to expect from the Reform to the UK’s private rented sector?

February 3, 2023

Widespread reforms were announced in June 2022, as part of the Government White Paper: A Fairer Private Rented Sector (https://www.gov.uk/government/publications/a-fairer-private-rented-sector/a-fairer-private-rented-sector) and 2023 could be the year landlords get more details and clarity on what it will be.

The White Paper defines the Government’s commitment to “deliver a fairer, more secure, and higher quality Private Rental Sector” and is anticipated to be the “biggest shake-up of the rented sector for 30 years”.

Some improvements were driven into the rental sector during the past few years. As an example, the Minimum Energy Efficiency Standards for England and Wales (https://www.gov.uk/government/collections/energy-performance-certificates) were changed in December 2020 and defined that from 1st April 2023 this rule will apply to all existing tenancies – if your property doesn’t have a valid EPC (Energy Performance Certificate) rating of “E” or above by it cannot be legally let.

This minimum will raise to “C” from December 2025 for new tenancies and all tenancies from 2028, so landlords should make energy improvements to their properties very soon.

It is expected that in 2023 the Government will continue changes to create a Private Rented Sector that meets the needs of the diverse tenants and landlords.

The part of the Government White Paper A Fairer Private Rented Sector is the Renters Reform Bill, that consist of some major changes which are aimed to “raise the bar on quality and making this new deal a reality for Renters”:

  • all private landlords should adhere to legally binding rules on decency defined by a Decent Homes Standard that will help to halve the number of non-decent rented homes by 2030 and increase the assurance that the properties are free from health and safety hazards and do not fall into disrepair. Local councils will be given the tools to enforce the standard;
  • landlords will lose the “no fault” eviction as “Section 21” is to be abolished. This new regime will allow landlords to regain possession of their property only in “reasonable circumstances” which will be defined in law, supporting tenants to save with fewer unwanted moves – for example, when landlords wish to sell their property and want themselves and their close family members to move into a rental property;
  • the government will only allow rent increases once per year, end the use of rent review clauses and improve tenants’ ability to challenge excessive rent increases through the First Tier Tribunal to support people to manage their costs and remain in their homes;
  • a new single Ombudsman will be introduced that all private landlords must join and which will provide fair, impartial, and binding resolution to many issues and be quicker and cheaper than the court system;
  • the new Property Portal will be provided to make sure that tenants, landlords and local councils have the information they need. There also will be a Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible;
  • some of improvements will to make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits. However, there will be no prohibition on landlords imposing affordability criteria nor on selecting tenants based on the results of credit checks;
  • the Bill will give tenants the right to request a pet in their property, which the landlord must consider and cannot unreasonably refuse.

The new rules will initially be applied to existing tenancies and there are no dates for when these changes will come into force, but further announcements from the government are expected.

Kateryna Knyazyeva
Paralegal – Commercial Department

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