Private rented accommodation in the UK is constantly throwing up dreadful scenarios where people are thrown out of their homes, where landlords won’t even keep the accommodation suitable for human habitation and where children get ill. Various governments have of late tried to reform the system. Is the new Labour Government on track to make the necessary changes in law to protect renters’ rights?
Labour’s changes to tenancies and landlords’ rights
On 12 September 2024, the Labour government, through Deputy Prime Minister Angela Rayner, brought forward the government’s renters’ rights bill for first reading in the House of Commons. The draft bill has a few aims in mind. Firstly, it intends to alter the legalities of leasing residential properties. Secondly, the Labour government has in its sights the removal of “assured shorthold tenancies”,“fixed term assured tenancies” and section 21 “notices to evict” tenancies.
Fixed Term Assured Tenancies
The draft legislation will also apply to fixed term assured tenancies, where the tenant can reside in the property for over half a decade. At the conclusion of the term of lease, the landlord has the power to determine if a new lease will be granted.
Properties excluded from the proposed draft legislation
Certain types of property are excluded from this legislation, known as ‘excluded properties’, such as holiday lets or commercial premises. Thirdly, the bill seeks to place ‘obligations’ on landlords and agents in connection with leased residential properties, and short-term rentals and ‘supported accommodation’. An example of such a new obligation would be to make it unlawful for landlords and letting agents to treat a person less favourably based on their ‘income’ such as if they are in receipt of welfare benefits or have children. The bill also aspires to take away the ‘barriers’ potentially stopping ‘marginalised people’ leasing ‘affordable’ housing.
Assured Shorthold Tenancies
Assured shorthold tenancies, known by the abbreviated AST, make up the majority of new tenancies in the private sector, and have been in use since 15 January 1989. The term applies if the property is the main accommodation of the tenant, the rent is over £250 per year and under £100,000 per year. This type of tenancy gives the tenant exclusive possession of the property (meaning nobody has the right to enter without the tenant’s agreement). A Housing Association is obliged to give four weeks’ written notice to the tenant if the tenancy is to be terminated. Currently, under section 21 of the Housing Act 1988, a landlord can make an application to court for repossession of a property resided in by a tenant under an AST, when the arrangement comes to the end of its time period, or is ended by the landlord complying with the legal obligation to provide two month’s written notice, communicating to the tenant that they wish to repossess the property. If the judge in the case is happy that the tenancy has terminated, and there is no further tenancy in place (excluding an assured shorthold periodic tenancy), the tenant sadly is in the perilous position of losing the property.
Renters’ rights – déjà vu?
The readers may think they have seen this movie before. It can reasonably be argued that this policy announcement by the Labour government is just a re-heated Conservative policy from around five years ago. On 15 April 2019, the Conservative Party under then Prime Minister Theresa May and the late James Brokenshire put forward the idea of stopping ‘unfair evictions’. It was wheeled out as the “biggest change to the private rental sector for a generation”. The government sought to achieve its aim by stopping “private landlords from evicting tenants at short notice and without good reason”. The government put forward proposals to bring ‘peace of mind’ to those tenants leasing residential properties by the creation of what it termed “open-ended tenancies for all private renters”.
The government also promised that landlords would have “more effective ways of getting their property back when they genuinely need to do so”. The proposed changes promised stopping “private landlords from uprooting tenants from their homes with as little as eight weeks’ notice” after a fixed-term tenancy, which is described as one where an agreement is made whereby the tenant will rent a property belonging to a landlord for a set period of time. The tenant is legally accountable for paying the rent unless there is a right for them to terminate the arrangement earlier, such as if it’s a fixed term tenancy signed before the tenant moves into the property, or a replacement fixed term assured tenancy signed after the tenant moves into the property terminates.
However, these measures were never introduced, because Theresa May announced, outside Downing Street, that she would be resigning from the office of prime minister five weeks after said announcement. May vacated the role on 24 July 2019, when Boris Johnson took the helm and set its sights on implementing Michael Gove’s levelling up agenda. Part of this involved the Boris Johnson Conservative administration talking about reforms, which if implemented would have brought in a landlord register to make life tougher for ‘rogue landlords’, preventing them from permitting tenants to reside in ‘unacceptable conditions’. The proposals made it into the late Queen Elizabeth II’s speech on 19 December 2019.
But after all that, the reforms were not brought forward for two years. Those renting residential properties had no option but to wait until the Queen’s speech in May 2021, to hear the promise that the response to the government’s consultation process, which took place before the 2019 Queen’s speech, would be published, and that shortly after that a white paper, detailing a range of proposed changes to the sector in the latter part of 2021, would be available. However, those renting their homes, hoping for a quick turnaround in the publication of the white paper, were disappointed, as the Conservative government did not release the document into the public domain until mid-June of 2022.
Some of the proposed changes to renters’ rights
When the white paper eventually emerged, it was entitled “A fairer private rented sector”, and contained draft proposals intended to positively change the leased residential property landscape, such as the removal of “section 21 ‘no fault’ evictions”, the delivery of “a simpler, more secure tenancy structure”, and the reform of grounds for possession to make sure landlords have effective means to gain possession of their property where necessary.
The intention behind the proposal was to ensure that a tenancy will only terminate for two reasons: firstly, if the person leasing the property from the landlord gives a reasonable length of notice; secondly, the expiry of such an arrangement would be where the landlord had ‘valid grounds’ (such as anti-social behaviour, rent arrears, damaging the property) to repossess the property from the tenant.
Politics interfered with the legislative process
Following on from the publication of the white paper, the government, much like its predecessor, through yet another Queen’s speech in 2022, promised a piece of draft legislation in the form of a renters’ reform bill, and gave a timeframe for it to be brought into the legislative process between 2022 and 2023. However, this proved to be yet another false dawn for those leasing residential property, because on 7 July 2022, Boris Johnson resigned as prime minister and vacated the office on 6 September 2022. When Liz Truss succeeded Boris Johnson as prime minister, she announced, in October 2022, the end for landlords of residential properties being able to throw tenants out without a reason. However, Liz Truss’ tenure as prime minister only lasted until 25 October 2022, and the bill had still not progressed, to the frustration of tenants. Rishi Sunak then took over the reins from Liz Truss on 25 October 2022, and he too promised to end no-fault evictions for tenants. The renters (reform) bill made its way to the House of Commons, and had its first reading on 17 May 2023, and proceeded to a second reading on 23 May 2023.
It had taken over six months to put the bill to the House of Commons. There was talk of a new tenancy system being brought in. However, in late October 2023, the Conservative government permanently paused the legislative process because it wanted to make positive changes to the ‘court possession system’. There was much frustration at this decision, and the opposition politicians sought a definite time frame for the process, so that those leasing and renting residential properties could have clarity as to when the new laws would be introduced. Many Members of Parliament expressed concerns about the bill, changes were suggested, and there was a focus on balancing the protection for tenants and landlords.
In November 2023, the bill entered the public committee stage and underwent 264 changes. Three months later, in February 2024, the government was reportedly working with Conservative backbench MPs, aiming to pinpoint and resolve any outstanding issues. In March 2024, government correspondence found its way into the public domain, suggesting that those in office intended to make a raft of changes to the bill, and sought to lower the “burden on landlords”. However, on 22 May 2024, time ran out for the legislative process as Rishi Sunak called a general election, meaning the bill did not make it onto the UK statute book.
Future direction of travel
It will be intriguing to see what develops with this legislation, and what the Labour administration seeks to replace assured shorthold tenancies and fixed term assured tenancies with.
The renters’ rights bill is now, September 2024, making its way through the parliamentary process, and the second reading is due to take place on 9 October 2024. As the process develops, it will be interesting to see if Members of Parliament make any amendments to the bill, as there is a real danger that the bill awaits a similar fate to its predecessor draft legislation and will run out of road.
