Identifying Opportunities in the Renters’ Rights Bill

The Renters’ Rights Bill represents the most significant reform to the private rented sector in decades. With widespread media coverage highlighting concerns over landlords leaving the market and potential court delays, it’s easy to feel overwhelmed by the changes. However, while there are undoubtedly challenges, letting agents also have opportunities to strengthen their role as trusted advisors and service providers.

This article breaks down the key proposed changes and explores how agents can turn them to their advantage.

Key Proposed Changes Under the Renters’ Rights Bill

The bill introduces several major reforms, including:

• Abolition of Section 21 (‘no-fault’ evictions)

  – Landlords will need to use Section 8 to regain possession, requiring specific legal grounds.

• Changes to Section 8 grounds 

  new mandatory grounds are to be introduced while discretionary grounds will be amended. In most cases the minimum notice will be 4 months and the mandatory rent arrears ground will increase to a minimum of 3 months arrears

• Tenancies to become periodic

  – All Assured Shorthold Tenancies (ASTs) will convert to rolling contracts, giving tenants greater flexibility to leave with two months’ notice.

• New rent increase rules

  – All rent increases will need to be implemented via a Section 13 notice giving at least 2 months’ notice and will be limited to once a year.

• Ban on rental bidding wars

  – Agents and landlords will be required to advertise a set rent price and it will be illegal to accept offers above it.

• Ban on Rent in Advance 

  landlords and agents will be prohibited from requiring or accepting more than one months’ rent in advance at the start of the tenancy or thereafter.

• Landlord Ombudsman service & PRS Database

  – All landlords will be legally required to register themselves and their properties on the database and join a new PRS Landlord Ombudsman Service. This includes those who use a managing agent.

These changes will have a significant impact on letting agents, but there are strategies to mitigate the challenges and create added value for clients.  We recognise that adapting to these changes will require additional effort from agents and landlords. As the details become clearer once the bill passes into law, we will provide further guidance and support to help agents manage the transition effectively.

1. Adapting to the End of Section 21

Challenge: Landlords can no longer issue a Section 21 notice, meaning all evictions will now rely on Section 8 grounds, which require more paperwork and legal scrutiny. Since court reform is unlikely to occur before the Renters’ Rights Bill is enacted, current delays are expected to increase.

Opportunity: Agents who are well-versed in the new rules will be in high demand. Offering guidance on Section 8 grounds, ensuring notices are correctly served, and keeping landlords compliant will set you apart. The Letting Partnership (TLP) will continue to follow the progress of the bill and will be sharing useful and practical guidance as details become clearer.

Avoiding court action is key, so greater emphasis should be placed on selecting premium-quality tenants for your properties. Additionally, fostering trust and clear communication with tenants is crucial for managing challenging situations and minimising the risk of disputes.

2. Helping Landlords Navigate Periodic Tenancies

Challenge: The shift to rolling contracts removes the security of fixed terms, potentially leading to unpredictable tenant turnover and more void periods. Additionally, agents will no longer be able to charge for tenancy renewals, impacting revenue, and will face added administration from updating all contracts to reflect the new rules.

Opportunity: Agents can take on a more proactive role in tenant management, helping landlords avoid long void periods by ensuring strong tenant relationships. While renewal fees will be lost, agents can introduce new services such as structured tenancy management and compliance support to create additional revenue streams. Proactively managing tenancy transitions and keeping contracts up to date will also help agents differentiate themselves in a more competitive market. With no fixed-term renewals, there is an increased need for effective notice handling and marketing strategies to minimise downtime between tenancies. Letting agents who offer structured tenancy management services will provide real value.

3. Navigating Rent in Advance Restrictions

Challenge: The restriction on rent in advance to just one month will limit options for prospective tenants who previously relied on upfront payments to secure a tenancy, raising landlords’ concerns about affordability and financial stability.

Opportunity: Agents can step in as problem-solvers by helping landlords feel more secure through thorough referencing, rent guarantee schemes, and proactive arrears management. This shift allows agents to strengthen relationships with landlords by demonstrating their value in mitigating financial risks, ultimately increasing demand for their services. Clients of TLP can opt in to our Arrears Chasing service which can reduce risk further.

4. Managing Rent Increases Strategically

Challenge: Rent increases can now only be carried out through a formal Section 13 notice, limited to once per year and requiring two months’ notice. Tenants also have greater rights to challenge increases.

Opportunity: Letting agents can assist landlords by ensuring that rent reviews align with market trends and comply with legal requirements. Implementing a structured annual review process and leveraging rental data will help landlords optimise their rental income while maintaining good tenant relationships. Agencies may also consider charging a fee for rent review management to replace lost renewal fees.

5. Positioning as Compliance Experts

Challenge: Compliance with changing and expanding regulations is becoming more complex, and many landlords and agents will struggle.

Opportunity: Agents who make the effort to keep abreast of the changes and provide clear, structured compliance support will attract more business. Consider offering compliance check-ups, registration services, and legal workshops to strengthen your agency’s reputation as a reliable partner.

TLP can help remove this compliance headache by offering a low-cost solution to keeping deposit records compliant. In addition, agents who outsource their client accounting to us can be assured that their accounts are reconciled daily and all money is processed in accordance with current regulations, reducing their administrative burden and ensuring compliance with ease. Contact us to learn more.

Looking Ahead: Why Agents Are More Important Than Ever

While the Renters’ Rights Bill introduces significant changes, it also reinforces the value of letting agents. With landlords facing new challenges, many will seek professional support to navigate the evolving landscape. Agencies that stay ahead of these changes, offer compliance expertise, and implement efficient tenancy management processes will thrive.

By embracing these reforms, agents can position themselves as indispensable partners to landlords, providing peace of mind and ensuring long-term stability in the sector.

 

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