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Renters (Reform) Bill: A Tour Bus Guide – Stop 5: Rent Increases

Renters (Reform) Bill: A Tour Bus Guide – Stop 5: Rent Increases

The Renters (Reform) Bill has been published.  What does it say? What does it mean, for landlords and for tenants?

In this series, members of the 42BR Housing Team stop off at different landmarks, considering the implications of the new law along the way.

Up, up and away: rent increases in the Renters (Reform) Bill

Robert Winspear

The Renters (Reform) Bill will change the rules regarding a landlord’s ability to increase the rent payable under a residential tenancy.

The Bill’s stated aim is to "provide stronger protections against backdoor eviction by ensuring tenants are able to appeal excessively above-market rents which are purely designed to force them out. As now, landlords will still be able to increase rents to market price for their properties and an independent tribunal will make a judgement on this, if needed. To avoid fettering the freedom of the judiciary, the tribunal will continue to be able to determine the actual market rent of a property”

As current drafted, the Bill would mean that in future, except for “low-cost tenancies” (e.g. social tenancies provided by local authorities) rent can only be increased once every 12 months, and at least two months’ notice must be given to the tenant. Those amendments are a slight improvement on the old provisions of the Housing Act 1988.

The Bill also sets out that any ‘rent increase’ clause in a tenancy is of no effect. This last change is promising, as this should put an end to the practice of tenants being locked into automatic rent increases that may not reflect changes in the market price.

Comment 

These changes are consistent with the Government’s general aim of providing more protection to tenants, to allow them to remain in their existing accommodation. However, critics might argue the changes do not go far enough.

For example, the scheme provides no protection to tenants from the effects of the overall market. If the market rent for the property increases beyond what the tenant(s) can afford, they will be at risk of eviction.

Indeed, with the abolition of ‘no fault’ evictions, I wonder whether annual market-rate rent increases, with a view to ultimately obtaining a possession order for rent arrears, will happen more frequently.

Furthermore, the Bill has not changed the status quo in terms of challenging rent increases. The burden remains on the tenant to apply to the First-tier Tribunal, and then attempt to obtain evidence of what the market rate for the property ought to be. That is not straightforward.

I suspect many tenants faced with an unaffordable rent increase will choose to move out, instead of making a potentially complicated, stressful and time-consuming application to the Tribunal.

To read the Renters (Reform) Bill, click here.

 

A Tour Bus Guide to the Renters (Reform) Bill 

Stop 1: Deposits, gas safety certificates and more

Stop 2: Grounds for Possession

Stop 3: Pets 

Stop 4: Homelessness

Stop 5: Rent increases

Robert Winspear

Call 2019

Robert Winspear

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