As we hurtle our way towards a decision on the Renters’ Rights Bill, we’re digging into more of the key changes it proposes and what it means for landlords across the UK.
Landlords have had a tricky road to travel in recent years. We were first introduced to the Renters’ Reform Bill set out by the Conservative’s, which didn’t get the chance to pass through government. Now, we’re navigating Labour’s answer to the Renters’ Reform Bill – the Renters’ Rights Bill – which sets out to overhaul the private renting sector.
The new Bill has recently had a second reading in The House of Lords and is at committee stage. There are amendments to be made and agreed before it goes back to The Lords for the third reading. Our best guesses at the moment are that the legislation will come into effect before the end of 2025.
What does the Renters’ Rights Bill mean for you as a landlord?
Back in November 2024, we explored the removal of fixed-term tenancies, abolition of Section 21 evictions and rent repayment orders. So now, we’re digging into the nitty gritty of rent reviews, pets and the central Landlord database, to give you a fuller picture of what the Bill might mean for you.
Rent Reviews limited to once every 12 months
For many of you, this won’t represent a distinct change from the current processes that are in place. Under the Renters’ Rights Bill, the only mechanism for rent increases will be the use of a Section 13 notice providing tenants with 2 months’ notice.
Rent increases must be in line with market rents and if a tenant disputes the increase, it will be important for the agent – or landlord for non-managed properties – to be able to evidence market rents to support the increase.
Pets cannot be refused without objective justification
The new Renters’ Rights Bill proposes that all tenants will have the right to request a pet, and a landlord will not be able to unreasonably refuse permission. Whatever rent is being advertised cannot be increased just because an applicant has a pet. So, what’s the answer?
We’re being advised that it may be possible to advertise your property at two prices; one without pets and a slightly higher price to include pets (the higher figure must be considered reasonable). And if you wanted extra measures in place should a tenant want a pet, you will be able to insist on pet damage insurance. It’s been indicated that you’d be able to take out the insurance policy and pass the cost on to the tenant.
Creation of a central Landlord database
If the new Bill is passed, you and your rental property will have to be registered on a central Private Rented Sector Database and a Landlord Redress Scheme. Both of these will be required before your property is marketed to let and you’ll be required to belong to the schemes before, during and after (for a period to be specified) the tenancy.
Preparing for the changes
These changes will naturally present teething issues, but we believe both responsible landlords and tenants could benefit from a fairer and more transparent rental system under the new legislation.
You might be thinking it’ll be easier to just sell your investment property. If you think this could be the right option for you, it’s worth considering not only the rental yield but also the mid to long term likely capital growth in value of the property. According to the Land Registry House Prices Index, property values in Staffordshire have risen by more than 75% over the 20 years up to the end of 2024.
It’s important to also seek expert financial advice in order to understand any capital gains tax burden you may incur if you were to sell. And remember, if you sell your investment property and decide to purchase again in the future, you’d incur Stamp Duty Land Tax at a higher level.
Your next move
Want to know the value of your property before you make any decisions? Contact our expert team on 01782 615530.
If you decide to keep your buy-to-let investment, we’d advise maintaining a well-managed and high-quality property to significantly reduce the risk of tenants leaving quickly. This includes high standards of maintenance, prompt responses to issues and transparent communication. See how we look after landlords and tenants here. As always, we’ll keep up to speed with the proposed changes and update you as the legislation develops. If you have any questions at all about the Renters’ Rights Bill and what it means for you, contact John at the office or email john@follwells.co.uk
