The government's Renters Reform Bill is set to significantly shake up the rental market by removing Section 21 no-fault evictions. As a landlord, this will transform how you approach rent increases and negotiations. You will lose the leverage of no-fault notices and need to adapt to new processes.
In this article, we'll break down what's changing, how it will likely impact rent reviews, and steps you can take now to get ahead of the reforms. While the bill may change as it's debated, it's wise to understand the direction of travel and begin preparations where possible.
The Current Rent Increase Process
Currently, when your assured shorthold tenancy is up for renewal, you have two main options if your tenant won't agree to a rent increase:
Use the Section 13 process to formally propose your increased rent amount. This allows the tenant to dispute the figure and have it reviewed by the First-Tier Tribunal. However, this route is rarely used.
Serve a Section 21 no-fault eviction notice, forcing the tenant to vacate so you can re-let at a higher rent.
Understandably, most tenants opt to compromise to avoid eviction. But Section 21 gives you powerful leverage in negotiations.
How the Renters Reform Bill Removes Section 21
The Renters Reform Bill will abolish Section 21 notices, removing your ability to evict tenants without grounds when the fixed term ends. No-fault evictions will be banned. Instead, the government states that all rent increases will go through the Section 13 process. You'll have to formally propose rent changes, with longer notice periods. Tenants will be able to dispute the amount at the First-Tier Tribunal without fear of retaliation.
Preparing for More Rent Disputes and Delays
For you as a landlord, this shift significantly impacts rent reviews and negotiations. With Section 21 gone, tenants have much less incentive to compromise. I expect the number of rent challenges at tribunal to drastically increase. Currently they are rare, but without eviction threats, why wouldn't a tenant try their luck at lowering the increase?
This means you'll likely face more disputes, hearings, and delays before collecting your new rent amount. You can no longer rely on the income until any challenge is resolved. Tribunals will also likely be overwhelmed, causing backlogs. And it may be hard to recover your legal costs from tenants unless they were clearly unreasonable.
Adapt Your Rent Strategy and Build in Protections
To prepare, I advise landlords take three key steps:
Expect longer void periods after renewals as disputes are resolved. Don't rely on the income until approved.
Build extra "buffer" into your rent increases to account for potential delays and legal costs.
Consult with your letting agent to adapt your rent review process without Section 21. Plan for disputes and make agreements before renewals.
While concerning, landlords who understand these changes and adjust can avoid chaos when the reforms hit. With some preparation, your rent strategy can withstand the end of no-fault evictions.
Section 21 ban impact
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