The Renters’ Rights Bill has passed its third reading in the House of Commons on 14th January 2025 and is now heading to the House of Lords for further scrutiny. While some changes have been made to the Bill during its Committee Stage, the core elements remain largely unchanged. The Bill is expected to become law in the spring, significantly altering the landscape for landlords and tenants alike.
However, the UK Government has not reconsidered the controversial removal of fixed-term tenancies. Additionally, the Bill will not address minimum Energy Performance Certificate (EPC) standards, which will be consulted on separately by the Department for Energy Security in the coming months. This article highlights the key amendments and their potential impacts on Kent landlords and property investors.
Limiting Rent in Advance: What Kent Landlords Need to Know
The government is proposing restrictions on rent in advance, which remains a common practice within the industry. Housing Minister Matthew Pennycook, MP, confirmed that landlords would still be able to request one month’s rent in advance, along with a security deposit of up to five or six weeks’ rent. This change aims to balance landlords’ needs for financial security with tenants’ affordability.
Key details include:
- Rent may be taken in advance only once, with the amount limited to:
- One month’s rent for monthly payers, or
- Four weeks’ rent for weekly, fortnightly, or four-weekly payers.
- After the initial rental period, rent cannot be collected earlier than the first day of each rental period.
- Terms that require more rent in advance will be replaced with regular rental payment schedules.
This change could affect tenants who are financially vulnerable, including those on fixed incomes, the self-employed, and overseas students, as it reduces the ability to pay rent upfront. While this may protect tenants, it could limit housing options for those who may struggle with referencing or affordability checks. For landlords, the shift requires a careful approach to assessing tenants’ financial capacity.
Eviction Grounds for Student Tenancies: A Closer Look
The newly introduced ‘student ground (4a)’ for eviction has been amended to include additional restrictions. Previously, this ground could only be used under certain conditions, including the property being an HMO (House in Multiple Occupation) and the tenants being students. The new amendment adds a condition that the tenancy must be agreed within six months of the start date, a significant shift from the previous arrangement where tenancies could be agreed up to a year in advance.
For landlords offering student accommodation, this amendment could reduce security and flexibility, as it limits the ability to secure tenants well ahead of time. This change may also result in fewer options for students, especially in university towns, as landlords may be reluctant to offer tenancies with such a short timeframe.
Guarantors: Liability After the Death of a Tenant
A key amendment in the Bill prevents landlords from holding guarantors liable for rent payments after the tenant they are supporting has passed away. This change aims to protect bereaved family members from facing unexpected financial hardship at a time of grief. However, the deceased tenant’s estate will remain liable for any unpaid rent, meaning landlords may still seek payment from the tenant’s estate.
Landlord Fees to Fund the Ombudsman
The Renters’ Rights Bill also outlines the creation of a private rented sector Ombudsman, funded by fees paid by landlords. The government has specified that landlords must provide detailed information about themselves and the properties they manage, including contact details, enforcement actions, and eviction notices served. While the introduction of an Ombudsman is intended to improve the sector, the fees to fund the scheme are expected to be higher than initially anticipated, adding an additional cost burden for landlords.
Exempt Tenancies: Changes to Fixed-Term Tenancies
Under the new provisions, fixed-term tenancies must be for at least 21 years to be exempt from the assured tenancy regime, a significant increase from the previous minimum period of seven years. Tenancies already in existence that last seven years or more will still be exempt. This change aims to further regulate tenancy types and ensure greater consistency in the rental market.
Conclusion: What Does This Mean for Kent Landlords and Property Investors?
The Renters’ Rights Bill represents a significant shift in the regulatory landscape for landlords, particularly those managing student accommodation and multiple tenants. While some changes, such as the restrictions on rent in advance and the introduction of a private sector Ombudsman, aim to protect tenants, landlords will need to adapt to a more complex environment with added financial and administrative burdens.
Kent landlords and property investors should carefully review these changes and consider their impact on both current and future tenancies. Navigating the evolving legislative landscape may require adjustments in how properties are managed, tenant assessments are conducted, and rents are collected.
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