The Tenants’ Rights Bill 2024 proposes to introduce significant changes to the UK rental market, affecting both the build-to-rent and purpose-built student accommodation (“PBSA”) sectors.

On 11 September 2024, the UK Tenants’ Rights Bill was read for the first time in the House of Commons. The Bill follows on from the Renters (Reform) Bill 2023, introduced under the previous UK Government and, if successfully passed, will bring about a number of significant changes to the build to rent and rental sectors private. Here are some key points of the bill:

Abolition of fixed-term rentals

Short-term assured fixed-term tenancies (“AST”), which have long been a vital part of the rental market, will be abolished. ASTs will be replaced by periodic rentals which will continue indefinitely unless validly terminated. Tenants may terminate a periodic rental with two months’ notice, by any written method. Owners will only be able to terminate their contract for certain prescribed reasons (see below).

Abolition of no-fault evictions

Section 21 of the Housing Act 1988 currently allows landlords to evict tenants with two months’ notice (after the end of their contract term) without the need to specify another reason, i.e. say a no-fault expulsion. The bill will abolish no-fault evictions and instead require landlords to prove cause for eviction before the property can be reclaimed.

Reasons for arrears

The bill will allow periodic tenancies to be terminated when tenants are in arrears, but landlords will have to give four weeks’ written notice (currently two weeks), and tenants will have to be in arrears of at least three months or 13 weeks (currently two months or eight weeks). weeks). Indeed, tenants can be expected to accumulate at least four months of arrears before a landlord can end a tenancy.

Rent increases

The bill imposes new regulations on rent increases; landlords will only be able to increase the rent once a year, which must be at market level. Tenants can contest any increase with the Tribunal, and the new rent will not be payable until the determination date. It remains to be seen how long it will take the Tribunal to make such decisions.

Other changes

The Bill will introduce other changes which are not summarized in this document. Alertsuch as the introduction of a new ombudsman and the extension of the “Awaab law” to the private sector (a law requiring owners to remedy serious health risks within a defined period).

Some parts of the bill remain unclear, including its application to the LNPP. The explanatory notes suggest that, as PBSA tenancies are not guaranteed, the PBSA sector will be exempt “as long as providers are registered with government-approved codes”. Yet many PBSA providers are not registered and currently grant ASTs to their student occupiers. There is therefore uncertainty as to whether rentals under the PBSA will generally be exempt or not. This point could be clarified as the bill progresses through government.

Introducing this Bill is a priority for the new Labor Government, and we can expect it to become law in the near future. However, for now, the Bill remains subject to amendment by the House of Commons and the House of Lords. We will keep an eye on developments as the bill is adopted by the government and a detailed study Comment will be published once the bill becomes law.