The Renters’ Rights Bill: are we nearly there yet?

The House of Lords committee stage of the Renters’ Rights Bill (Bill) concluded on 15 May. Of the 300-plus amendments proposed, all of those put forward by the opposition and backbench peers were rejected and just a small number of Government-proposed amendments were approved.

However, in taking a moment to look beyond the (limited) amendments to the draft Bill, there are interesting themes that can be drawn from the discussions tabled by their Lordships during the committee stage debates.

Fixed-term tenancies

The Government is showing great resistance to the notion of having any form of fixed term tenancies. This is despite their Lordships putting forward multiple examples where a lack of fixed term will be counterproductive for both landlords and tenants.

While the new legislation will undoubtedly offer tenants increased flexibility, it will be disappointing if this is at the cost of the stability that a fixed term tenancy can offer to those living in rented accommodation. If the legislation is enacted as it stands, it will not be possible for a landlord to grant anything other than a periodic tenancy rolling from one month to the next until either the landlord or tenant terminates it. The security that comes with knowing you have long term housing for a certain period close to a child’s school, near to work, or in a community to build links within, should not be underestimated. The stability of a fixed term also gives certainty and confidence to landlords invested in the private rental sector. Instead, tenants now risk termination of a tenancy if a landlord wishes to sell the property or move into the property. In other words, there are circumstances where tenants will have less security.

When introduced to Parliament in September 2024, the Bill only applied to leases up to seven years, which meant fixed term tenancies could still be granted where the term would be over seven years. However, come January this year the Government perceived that unscrupulous landlords might seek to circumvent the legislation by, say, granting an eight-year lease with a four-year mutual break right. Accordingly, the revised bill extended the ban to prohibit new fixed term leases of less than 21 years. I suggest that a simpler way to have legislated against this point would have been to make the legislation applicable to any lease of more than seven years which contained a landlord’s break (but otherwise inapplicable to fixed terms over 7 years).

The explanation put forward time and again by the Government during the Lords committee stage is that to have provisions permitting tenancies of a fixed term might be “confusing”. Those with a keen sense of humour will spot the irony given the draft legislation essentially performs surgery on the Housing Act 1988, making the legislation remarkably confusing to navigate.

Rent reviews

While a landlord will be able to propose annual rent increases in line with the fair market rent, this will need to be done by following a prescribed statutory process. As the Bill is currently drafted, it is hard to conceive a situation where the already strained Courts are not buried in applications relevant to rent reviews. There is no disincentive on a tenant to accept a new rent without first challenging it; there is no cost sanction to be imposed on a tenant through challenging and, if a rent increase is upheld, the new rent will not be higher than the sum the landlord proposed, and will not be backdated, so will only apply from a future date determined by the tribunal.

In response to concerns raised by their Lordships, the Government emphasised its commitment to digitisation while maintaining its stance that the Courts will not be overwhelmed. However, talk of digitisation of the process does not exactly inspire much hope considering the problems which have ensued following digitisation of the probate system, and it is hard to conceive how algorithms and AI can be applied to the nuances of rent reviews on property. The possibility of the Valuation Office assuming the role of gatekeeper was also discussed, but there was little substance to the deliverability of this suggestion.

Increased regulation

There were detailed discussions on the development of the private rented sector database, landlord redress scheme and private rented sector ombudsman. While it is clear these will add a layer of further administrative costs on landlords, the Government is still working through the detail of how each will work (ie who will be responsible for them; how they will be funded; enforcement, issues of transparency; how the ombudsman will interact with the database etc) so is not able to commit to a timetable for implementation.

At this stage we can only speculate as to likely successes.

In fairness positives can be drawn from the tenancy deposit scheme created by the Housing Act 2004. This has, by and large, worked well to create a framework relied on and adhered to by tenants and landlords. However, replicating this with a new landlord redress scheme may prove challenging, depending on the nature of the disputes it seeks to address. Dealing with minor damage, eg a carpet stain, is rather simpler than significant grievances, with rather more complex issues to unpack.

Pets of course are the winners in all of this. Landlords will not be able to unreasonably withhold consent to a pet. Insurance may be required as a condition of consent, although this begs the question as to where this leaves a landlord if the insurer declines a claim for whatever reason.

Landlords (obviously acting reasonably) will also have to decide as to whether it is reasonable to keep a pet in the property. As their Lordships observe, such matters are “best determined on a case by case basis”. I look forward to references being provided for dogs...

Conclusion

This is the most fundamental change to the private rental sector in over 35 years. There is, in fairness, much in the Bill to be applauded in its ambition. However, what remains to be seen is the effect on the supply of properties, and rents once the Bill receives Royal Assent.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, June 2025