With the new rules for landlords due to come into effect in 2025, I answer the top 7 questions I’ve received from landlords and property investors about key aspects of the Renters’ Rights Act.
This includes whether the Renters’ Rights Bill kill buy to lets, how it will affect HMO landlords and the student market, rent controls, and the timing of when the new renter reform rules will come into force.
I go through each question in a straightforward, practical and balanced way, drawing on my experience as a lawyer and a landlord.
You can watch the YouTube version of this blog post below.
Top 7 questions about the Renters’ Rights Bill at a glance
- 1. Will the Renters’ Rights Bill kill buy to lets?
- 2. What does the Renters’ Rights Bill mean for HMO landlords?
- 3. How will the Renters’ Rights Bill affect the student market?
- 4. Will the Labour government bring in rent controls?
- 5. Will landlords be able to increase rent once the Bill comes into force?
- 6. When will the Renters’ Rights Act come into effect?
- 7. When is the last day landlords can serve a Section 21 notice?
1. Will the Renters’ Rights Bill kill buy to lets?
In a word, no. It won’t in itself make the standard buy to let unviable. Why? It comes down to supply and demand.
People still need homes, and there’s not enough social housing. The population is growing and not everyone can afford to buy their own homes.
Sure, landlords will need to adapt, as there won’t fixed terms any more and we’ll need to get used to open-ended tenancies when the tenant can leave at any time. It will become more complicated to increase rent, and we’ll need to keep tabs on the market rent as tenants will have greater rights to appeal against rent increases.
We’ll need to be even more careful about tenant selection as it will be harder and cost more to evict problematic tenants when section 21 is abolished.
If you want to know more about the detail of this, take a look at my free training on YouTube: Renters’ Rights Bill Explained. If you just watch one, take a look at How to get ready for the Renters’ Rights Act.
We’ll also have to focus more on customer service, and make sure we look after our properties. But we should be doing that anyway.
But the more landlords who sell up, the less supply there will be, and demand will go up.
I’m certainly not selling up.
As with all investments, it comes down to whether you’re getting a return, net net, after tax. Are you making any money. Does the property cash flow, or are you keeping it in hope that you’ll make money if the value goes up. But we need to be careful here, as property prices are very unpredictable.
>> Related Post: How to choose good tenants
>> Watch on YouTube: Renters’ Rights Bill Explained
2. What does the Renters’ Rights Bill mean for HMO landlords?
The Renters’ Rights Act will make life more difficult for HMO landlords.
The Act will abolish fixed term tenancies, meaning there will be no minimum period of a tenancy. Tenants will be able to move out at any time if they give two months’ notice in writing to expire at the end of a rental period (this will usually be the day before the rent is due.
This will make planning more difficult for HMO landlords as there will be no set minimum term, and there will be a greater turnover of tenants, coming and going when they see fit.
However, one advantage for HMO landlords is that they will have valuable relevant market data for rent increases, as they will be able to quote how much they have let rooms in the same house on the open market.
3. How will the Renters’ Rights Bill affect the student market?
It’s difficult to overstate the impact that the Renters’ Rights Act will have on the student market.
I think it’ll be like Brexit – lots of promised improvements for students, but it will end up making everything worse.
Why? No more fixed term contracts, and students will be able to terminate whenever they like. The terms won’t align to the academic year. Landlords won’t be able to ask for rent on a termly basis and it looks like rent in advance will be abolished, which will increase the risk for those landlords who let to foreign students.
If one tenants drops out and serves notice, it will bring the whole tenancy to an end, whereas at the moment, they’ll have to find a replacement.
But it will make planning harder. I suspect landlords will stop the practice of signing up students a long time in advance, and do it closer to the start of the academic year, to reduce the risk.
There’s a new ground for eviction for HMO with all tenants in full time education, but that’s only of marginal interest as pretty much all tenants want move out when their exams end, without court action.
4. Will the Labour government bring in rent controls?
Both Angela Rayner and Matthew Pennycook have made it clear they won’t bring in rent controls.
The YouTube video contains clips of both of them saying this.
>> Related Post: The new rules about rent in the Renters’ Rights Bill
5. Will landlords be able to increase rent once the Bill comes into force?
Yes. However, it will be trickier to increase rent as landlords will only be able to do so if they serve Form 4, the notice needed under the Section 13 procedure.
The Renters’ Rights Act will outlaw rent review clauses, there will be no fixed term tenancies to renew, and landlords won’t be able to agree a rent increase with tenants without first serving a rent increase notice under the Section 13 procedure.
There’s also likely to be more appeals by tenants as they’ll have nothing to lose. Landlords will need to know what the market rent is.
With rents only forecast to go up 3% in 2025 anyway, according to Rightmove, maybe landlords won’t bother increasing in tenancy rent.
>> Related Post: The new rules about rent in the Renters’ Rights Bill
>> Related Post: How to increase rent with a Form 4 Notice (Section 13)
>> Watch on YouTube: How to increase rent with a Form 4 Notice (Section 13)
6. When will the Renters’ Rights Act come into effect?
Although it has made good progress, particularly in comparison to the Renters (Reform) Bill, the Renters’ Rights Bill still has a long way to go before it becomes law.
The Report Stage and Third Reading of the Bill will take place in the House of Commons on 14 January 2025. After that, it will need to go through the House of Lords before receiving Royal Assent, probably in the late spring. This is when the Bill becomes an Act of Parliament. However, although it is a significant step, most of its provisions will come into force at a later date.
The Bill includes a lot of references to regulations, which are secondary legislation, and these will need to be published.
The government has promised to allow the private rented sector time to get ready for the changes for the Commencement Date of the new assured tenancy system in Part 1, Chapter 1 of the Act.
Putting all this together, I cannot see how the Commencement Date will be before October 2025.
>> Related Post: Renters’ Rights Bill Timetable: What happens when?
7. When is the last day landlords can serve a Section 21 notice?
Landlords will be able to serve a Section 21 notice until the last working day before the Commencement Date when Part 1, Chapter 1 comes into force.
However, if the tenants don’t move out by the time the notice expires, they’ll have to bring proceedings for an order for possession within 3 months of the Commencement Date.
The rules are complex, but you can find a longer explanation with a timeline in the related post below.
>> Related Post: When is the last day for valid Section 21 notices?
Not getting posession of my property is my biggest concern.
Its been said that if a landlord or family member want to move into their property, they can but I expect this would happen if there are ‘qualifying’ reasons. I did read somewhere that this would apply if the property was y
one’s home prior to letting. Is there any other reason this option would be deemed applicable?
Another possibility of getting posession is said to be, if a landlord wants to sell. Again landlords would need to give reasons for wanting to sell.
Any idea what a ‘qualifying’ reason would be?
I fear all this is to give us false hope into thinking these options are available when they will not be, unless the property is being repossessed by mortgage lenders.
The government have not kept their promises on several things so will want rent controls later on.
The whole thing is a disaster. I have 3 properties and am seriously considering to bite the bullet and leave at a tune of 120k CGT while there is still a chance.
Readers comments would be much appreciated.
Hello. I’m not sure who’s given you this information, but it’s not accurate. Check out the Bill yourself – pages 155 and 156: https://publications.parliament.uk/pa/bills/cbill/59-01/0127/240127.pdf
There are no ‘qualifying reasons” for family moving in, and it won’t need to have been the home before letting (that is the current rule and the RRB will change this, making the ground easier to for landlords to comply with).
There won’t be qualifying reasons to sell either. The Bill just says that the landlord must intend to sell. Proof might be instructing solicitors, estate agents and a witness statement.
Hope that helps.
Suzanne, thank you for this uplifting information. I asked these questions on line in various places and those views were what I received. I feel better hearing from you that I did not get the right information. It’s v.good to know one can sell if necessary.
I’m pleased you feel better. There is so much inaccurate information and clickbait scare-mongering online. I research my content thoroughly and check the primary sources myself. I take what I read from most blogs, newspapers and forums with a pinch of salt.
You’ll be able to sell if necessary. It will be a bit more hassle than it is now with section 21, but it will be possible.
Best wishes, Suzanne
Rent in advance – I assume that rent paid a couple of days before the due date, because it is more convenient for the tenant, will still be allowed?
Rent in advance – I assume that we will be required to return any rent that was paid, an additional month in advance, from a few years ago when the tenancy began when the new rules come into being?
Rent Increases – Do you have a proposed legal mechanism for negotiating rent increases to avoid all increases going to first tier tribunal. I imagine where the new rent is below market value issuing a section 13 notice to full market value with an ‘understanding’ that the tenant can counter offer to a figure that is acceptable to the landlord. In the event that the notice is referred to first tier tribunal the landlord at least has a backstop that will mitigate the delay in receiving the increased rent.
Rent increases – If I issue an ‘intention to increase rent’ with one months notice in the days prior to the new rules coming into play will the notice period and required method of notification be invalidated by the new rules forcing me to start the process again?
Great questions.
1. Yes.
2. I don’t think there is a need to return rent paid in advance before the Commencement Date
3. Rent increases will only go to the FTT if the tenant appeals. I have good relationships with my tenants and only propose rent increases that are reasonable, and I will be surprised if they appeal. I think that’s the way forward. But yes if you issue a notice and then agree with the tenant to a lower rent, that would work, and you can document that. I know lots of agents are talking about that route.
4. I think you’ll be able issue a s13 or sign an addendum increasing the rent before the commencement date to come into effect afterwards, and they’ll be under the old rules. As soon as the commencement date comes, you’ll need to use the new s13 for new rent increases.
Disclaimer – this isn’t legal advice!
Thank you for confirming current understanding. On point 3 specifically I totally agree with maintaining good tenant relationships, hence a desire to keep them well under the current market value.
I have 3 questions
Question 1) With reguards to Section 8 ground 1A. A landlord can seek possession in order to sell the property but has a restriction placed on them they they would be unable to rent out for 12 month after giving notice.
So what happens if the sale of the property is agreed and then fall though, and the landlord is unable to find a suitable buyer?
In that situation would it be the case that the landlord have to keep the property vacate for 12 months and pay the mortgage.
Question 2) student HMO let on a joint tenancey. Under the current bill, a student tenant could end the tenancy giving two months notice, so if the tenancy ran from july to july and exams are in April, we be faced with a situation where the tenant moved out end of April and new student tenants not move into sept.
That would lead to 4 month void period if a landlord wants to keep renting to students, because other wise if the landlord re-lets the property to non students, it will effectly remove the property from being made avilable to new tenants as its now let to non students with no defined end period
3) for joint hmo tenancy, if one tenant gives notice it would end the tenancy for all tenants.
However, if the remaining tenants wanted to, would a new tenancy agreement need to be entered into?
If a new tenancy would be created the i would assume that new tenancy could be let out at an increased rental amount than the old tenancy as the orginal tenancy was ended
I really do feel as if the government has thought out the impact on the student rentals market.
Here are quick answers to your questions:
1. Yes, they would have to wait for 12 months before reletting.
2. Your summary is correct.
3. Yes, technically they would need a new tenancy agreement as the notice to quit would end the old one. If the landlord puts up the rent too much, the other tenants might just leave. (Market forces).
Hi, I have a vacant property I want to sell in Spring next year. But I’m now worried if I do a 6 month tenancy that when the bill comes into affect the tenants will have 12 months from that date before I can sell it? So I now face keeping the property empty and going to waste with a mortgage and associated bills to pay. If I’m upfront with the tenants and they’re happy with 6 months tenancy can I do this and then give them 4 months notice after 2 months? Or will they be able to change their minds and stay for another 12 months? Or, does the 12 months rule not apply to existing tenancies?
I’ve always been a good landlord, not increased rent, kept rent below market level, kept a high standard of property, allowed pets, protected deposits – this bill feels like a punishment for decent landlords.
My understanding is that the earliest a Ground 1A notice will be able to expire will be 12 months from the start of the tenancy. An option might be to enter into an AST with a six month fixed term notice, and serve a Section 21 notice 4 months into the tenancy to expire at the end of 6 months. So long as the Act doesn’t come into force before the 4 months is up, you will be ok (assuming the notice is otherwise valid.
Here is a blog post that goes through it: https://theindependentlandlord.com/section-21-transition/