One of the casualties of the recent UK general election was a bill that would have changed the law regulating privately rented homes in Great Britain. The Renters Reform Bill – as it was known before it fell when parliament was prorogued – contained a key feature that was a fulfilment of the then Conservative government’s election manifesto, namely to end so-called ‘no fault’ evictions. The commitment even pre-dated that manifesto: Theresa May called for an end to ‘these unfair evictions’ back in 2019.

The new Labour government has now been left to pick up the mantle. The first King’s speech since the election makes clear that they will do just that, via a new Renters’ Rights Bill. It remains to be seen whether that subtle change from ‘Renters Reform’ to ‘Renters’ Rights’ will be reflected in stronger protections for tenants. Either way, with a change to the law all but guaranteed, now is an appropriate time to consider what this might mean for tenants and landlords. The experience of Scotland could be instructive in this regard, given that Scots law recently changed to do away with ‘no fault’ evictions for most new private rentals of a home.

Durable residential tenancies – from deregulation to regulation

To put it mildly, the balance between landlords and tenants in Britain has fluctuated over the years. To simplify matters, we can begin this chapter of landlord and tenant relations with the deregulatory housing law reforms of 1988. The Housing (Scotland) Act 1988 and Housing Act 1988 changed private renting in Scotland and in England and Wales to allow landlords to enter into fixed-duration tenancies. Assuming various formalities were complied with by the landlord, these arrangements could then be brought to an end at the expiry of that fixed-term, even where the tenant had behaved impeccably. This is where the term ‘no fault’ eviction stems from. Eviction prior to the expiry date was also catered for, notably where a tenant defaulted on the rent. In England, a ‘no fault’ eviction is termed a section 21 notice, named after the relevant section of the Housing Act 1988.

In 2016, Scotland passed a law to introduce a new form of tenancy for the private rented sector – known simply as the ‘private residential tenancy’ (PRT)– which would run on open-ended basis. A PRT can only be brought to an end by the tenant (on 28 days’ notice) or by the landlord where they have a valid eviction ground. Some eviction grounds relate to the tenant’s conduct, whereas others relate to the landlord’s circumstances. Any landlord seeking to recover possession of the let property needs to establish the existence of at least one eviction ground at a tribunal, and a further reform made all evictions at the discretion of that tribunal (such that it has to be satisfied it is reasonable to grant an eviction order given the comparative circumstances of the tenant and the landlord). All of this represents a huge change to the 1988 regime.

Reform and the Renters’ Rights Bill

The background briefing notes to the King’s speech make clear that the Renters’ Rights Bill will overhaul the private rented sector by abolishing ‘no fault’ evictions, and thus ‘removing the threat of arbitrary evictions and increasing tenant security and stability’. The potential human impact of a section 21 notice is touched on in this BBC report from earlier this year.

Now that it seems England is to venture on a similar course to Scotland for its private rented sector, it can at least look north for a bit of insight. (Wales has already narrowed the circumstances where ‘no fault’ eviction can take place and tweaked its law to extend notice periods where ‘no fault’ evictions remain possible.) One thing that will need to be considered is measures to protect tenants from unscrupulous landlords who seek to manufacture an eviction ground when no such ground actually exists: although Scotland has some protections built into its law (which can force a former landlord to pay a penalty to a former tenant), there have been some wrinkles with this ‘wrongful-termination order’ regime, plus research by Generation Rent suggests one eviction ground – allowing a landlord to sell the let property with vacant possession – has been subject to some abuse. The aforementioned briefing notes highlight that ‘New clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to’ – no doubt these will be much debated over the course of the bill’s passage through parliament.

Another challenge for the government will be to ensure landlords are kept informed about what reforms are happening and not spooked by fears of what could happen, lest there be a surge in section 21 notices (as apparently happened earlier in 2024) from landlords seeking to either exit the sector or end the relationship with their existing tenant (even though such existing tenancies would probably not be affected by any law change, as the reforms are unlikely to be retrospective).

The impact of private rented sector reforms

Tinkering with the law and indeed the tax treatment around private renting might change landlord behaviour, but it is always tricky to ascertain the precise impact of a particular legal change on the housing mix. The size of Scotland’s private rented sector has remained relatively steady since the end of ‘no fault’ evictions, but there have been some recent reports of a drop in new lets being made available and much speculation about why this might be the case; a recent rent regulation measure brought in for the cost of living crisis may feature in this analysis, but wider regulation could also be seen as playing a part.

Of course, when a private landlord leaves the rental market, the building will still be there (unless the previously let property is actually derelict or destroyed, and as such no loss to the future housing mix). In a situation of housing pressure, the question that inevitably arises is 'what happens to that property'? It may well be that such a property goes to a new owner-occupier who would otherwise have been renting, but facilitating that might be another challenge for any government. There may also be follow-on considerations relating to the location, quality and price of the rental property that remains (or becomes) available on the market. These are all difficult issues, that might be explored on another day.

Meanwhile, a new Housing (Scotland) Bill is being considered by the Scottish parliament. It contains some features that were decidedly absent from the Renters Reform Bill and do not appear likely to feature in the Renters’ Rights Bill, establishing a new system to allow for rent regulation in particular localities. Another reform in the new Scottish Bill - giving tenants a right to request consent for a pet from their landlord – is also likely to feature in the Renters’ Rights Bill. One thing the Scottish Bill doesn’t contain though is a reform to prevent a landlord discriminating against tenants who are on benefits or have children, this being something that is better catered for at Westminster in terms of the devolution settlement, and as such the Renters’ Rights Bill will have an impact in Scotland even though its focus lies south of Anglo-Scottish border.

What next?

The text of the Renters’ Rights Bill is keenly awaited. There has been some speculation that details of it won’t be available until October, so we are in something of a waiting game until then. For those who rely on the private rented sector in England, this waiting game is nothing new, although that familiarity will be scant comfort. At least they can take some consolation that it seems a racing certainty that legislation really will be passed in this parliamentary term.

 

Malcolm Combe is senior lecturer in law at the University of Strathclyde law school

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