With Parliament in Recess for the summer, the Renters’ Rights Bill is now set to be passed into law in early September.
That means letting agents and landlords have only weeks left if they want to get their house in order before the legislation hits the statute books and we enter the implementation period.
With much of the discussion focused on the abolition of Section 21 and the ending fixed-term tenancies, some agents and their landlords may not be across all the details contained in what is now a mammoth piece of legislation.
Goodlord’s Old Sherlock outlines some of the key changes that have attracted less attention but will still have a major impact on the PRS:
Not all the changes will happen at once
Once the bill passes into law in early September, we will enter what’s called the ‘implementation’ period. This will be a period of time given to the market to make any changes necessary to adhere to the new rules, before they are officially enforced. This is predicted to be in early 2026.
However, it’s likely that some elements of the Bill will be implemented sooner than others, with the Government intending to abolish Section 21 and move to a system of Assured Periodic Tenancies (APTs) within two months of Royal Assent. This means agents and landlords need to be prepared for a staggered timeline of changes and take steps to ensure that a rapid rollout of certain rules doesn’t catch them off guard.
Rental bidding ban
The bill will mean that bidding over the rental asking price will no longer be allowed. The Government has clarified that although most landlords don’t encourage bidding wars, this provision aims to “crack down on the minority of unscrupulous landlords who make the most of the housing crisis by forcing tenants to bid for their properties.”
There are fears that this ban could lead to the practice of ‘gazundering’ – encouraging landlords to overprice properties with a view to negotiating prices down. This could create distortion around the true value of rental properties across the market; sowing confusion for all stakeholders.
Agents must ensure their practices and those of their landlords meet the new legal requirements and don’t unwittingly fall foul of the rules.
Pets in lets provision still in limbo
When it comes to pets in lets, it’s clear that this legislation will make it harder for landlords to outright ban pets in their properties. What’s less clear is what will be expected of tenants when it comes to any potential pet damage.
Initially, the bill made a provision that tenants bringing pets into a property would need to take out pet damage insurance. However, the Government has since tabled a new amendment which removes requirements for tenants to have mandatory pet insurance. The government’s view is that ordinary deposits more than cover any damages caused by pets.
But a different “pet damage deposit” amendment – which would empower landlords to add provision for pet damage into rental deposits – has also been proposed (although not by the Government). This means the exact details on “pets in lets” will remain uncertain until September. Landlords should prepare for all eventualities.
Digital PRS database could bring major fines
The bill will also bring in a new digital PRS database designed to provide tenants with visibility on who landlords are and any historical banning orders they’ve received.
Once it comes into effect, every landlord will be required by law to register themselves and their rental properties in the database. Non-compliant landlords may be saddled with financial penalties of £7,000 for the first civil penalty, with costs spiralling to £40,000 for repeated breaches. Agents who advertise or let a property belonging to an unregistered landlord can face similar civil penalties of up to £7,000, escalating to £40,000 and possible criminal prosecution for serious violations.
As soon as the database is live, it’s essential that agents ensure their landlords are properly and compliantly registered and that regular audits are conducted to make sure information is up to date.
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