The UK Tenants' Rights Act 2024: what you need to know

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

On September 11, 2024, the United Kingdom’s Renters’ 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 into law, will bring a number of significant changes relevant to the housing and private rental sectors. Some important conclusions from the bill are:

Abolition of fixed-term rental contracts

Assured fixed-term shorthold leases (“ASTs”), which have long been a staple of the rental market, will be abolished. ASTs are replaced by periodic leases that continue indefinitely unless validly terminated. Tenants can terminate a periodic rental agreement with a notice period of two months, via any written method. Landlords can only cancel on certain prescribed grounds (see below).

Abolition of no-fault evictions

Section 21 of the Housing Act 1988 currently allows landlords to evict tenants on two months’ notice (after their contractual term expires) without having to provide any other grounds, i.e. a no-fault eviction. The bill would abolish no-fault evictions and instead require landlords to prove cause for eviction before the property can be reclaimed.

Overdue lands

The bill allows termination of periodic rental agreements if tenants are in arrears, but landlords must give four weeks’ written notice of termination (currently two weeks), and tenants must be in arrears of at least three months or thirteen weeks (currently two months or eight). to soften). In fact, tenants can be expected to accrue at least four months’ arrears before a landlord can terminate the lease.

Rent increases

The bill places new rules for rent increases; Landlords may only increase rent once a year, which must be at market level. Tenants can challenge any increase in court, and the new rent will not be payable until the date of determination. It remains to be seen how long it will take the Tribunal to make such decisions.

Other changes

The bill will introduce other changes not summarized herein Warnsuch as the introduction of a new ombudsman and the extension of the “Awaab Law” to the private sector (a law requiring landlords to resolve serious health risks within a certain time frame).

Certain parts of the bill remain unclear, particularly its application to PBSA. Explanations suggest that as PBSA tenancies are not insured, the PBSA sector will be exempt “as long as providers are registered to government approved codes”. Yet many PBSA providers are not so registered and currently grant ASTs to their student residents. There is therefore uncertainty as to whether or not PBSA leases will generally be exempt. This point may be clarified as the bill is passed by the government.

Implementing the Bill is a priority for the new Labor Government, and we can expect it to become law in the near future. For the time being, however, the bill remains subject to amendments by the House of Commons and the House of Lords. We will monitor developments as the bill is developed by the government and provide a detailed overview Commentary will be published once the bill becomes law.