Good Landlording

In this week’s episode of Good Landlording, Suzanne Smith and Richard Jackson discuss the key insights from the NRLA Landlord Conference in Birimingham on 5 November 2024, sharing useful information for landlords.

This includes:

>> Ask a question: Click here for question form

>> Join: Link to get £15 off NRLA membership

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

In their rental market update for Q4 2024, Suzanne Smith and Richard Jackson discuss the impact of Labour’s first budget on landlords and property investors, the latest on the Renters’ Rights Bill and what’s happening with rental trends.

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Richard and Suzanne discuss the key changes for landlords and property investors in the budget:

>> Blog post: What the 2024 Autumn Budget means for landlords and property investors

The Renters’ Rights Bill is making good progress through the House of Commons, and entered the Committee Stage on 22 October 2024.

The Committee are going through the Bill on a clause by clause basis. The Housing Minister has made it clear that they won’t be backing down on fixed terms or making exceptions for students. The ambiguity around up front rent payments has been discussed a lot, and the Minister said he will make the position clear in the Bill.

>> Blog post: The latest on the Renters’ Rights Bill

>> Related episode: What the Renters’ Rights Bill changes about rent

There are signs that the renal market is slowing down, with demand softening. Anecdotally, Richard and Suzanne have recently seen it in London and Kent respectively.

This is backed up by Rightmove’s Rental Trends Tracker for Q3 2024 which says the average number of enquiries per rental property is now 15, down from 23 last year. However, this is nearly double the 8 before the pandemioc in 2019.

The advertised rental price is dropping before finiding a tenant for more than a fifth of rental properties.

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

Hot on the tails of Keir Starmer’s controversial assertion that landlords aren’t “working people”, as it’s passive income, like income from shares, Suzanne Smith and Richard Jackson discuss objectively the extent to whether income from residential rental properties can be considered “passive”.

Stepping back from the political debate, they examine “passive income” means, and contrast it to what landlords need to do to earn money from their rental properties. Although property “gurus” claim that rental income is passive, there is a trade off between outsourcing and profit. It’s also the wrong mindset.

>> Blog post: Can landlords make passive income from rental property?

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There are two key types of residential landlords: part-time landlords who manage properties alongside a full-time job, and professional landlords who manage their property portfolios as their main occupation. Richard emphasises that even part-time landlords work very hard, juggling their careers with property management.

Suzanne adds to this by discussing the responsibilities and engagement required, even for those landlords who might have fewer properties. Landlords who manage properties themselves do not earn passive income – it is a job.

On the other hand, income from landlords with full repairing commercial leases is more passive.

HMRC considers passive income to be investing in assets, and not from running a trade or a business, or being an employee. They give examples such as interest payments from bank accounts, annuities, and dividends from money invested in the stock market, and don’t refer to rental income.

Forbes frames it as income that doesn’t need a significant commitment of time or effort to earn, with only minimal monitoring on an ongoing basis. They say that rental income doesn’t fall within the definition of passive income as it requires a large up-front investment, as well as ongoing maintenance and management of the property. 

Despite what the “property gurus”, earning rental income as a landlord isn’t the same as getting interest from money in a bank account, or dividends from stock market investments.

However, is it right to say that landlords really earn money with minimal effort?

Landlords earn money from rental income and capital growth.

Landlords need cashflow from rent in order to pay the bills while they are waiting for capital growth, unless they are going to dip into their savings.

Capital growth is never guaranteed. Although property prices boomed in London in the past, anyone who bought a flat in London over the last 5 years will know that capital growth is not a given. Suzanne barely broke even on her flat in Cambridge in 7 years, despite it being a fantastic flat a great location.

But before landlords earn anything, they need to find, finance and buy a new rental property, which is time-consuming and expensive. Then they need to refurbish the property (unless it’s a new build), make sure it’s compliant, and then find suitable tenants to rent the property.

Once tenants move in, they will need managing, and the property will need ongoing repairs and maintenance to keep the property in great condition, and compliance with landlords’ various legal obligations like the annual gas safety certificate. There is always a lot of work when tenants change over. It is running a business.

If landlords outsource these activities, the income can be more passive, but that will reduce margins. There is a trade-off between a landlord’s involvement and the level of profits.  Outsourcing comes at a cost, and will depend what the landlord wants to do and what’s right for them at their stage of life and their aspirations.

If a landlord has another full-time job, they may want to outsource, and if they go into property full-time, they may want to take more control, maybe even hiring a part-time property manager, to get economies of scale.

>> Related episode: #28: How to manage tenants and keep them happy

>> Related episode: #10: Tips to help landlords self-manage their buy to lets

Being a landlord comes with a lot of legal responsibilities. The buck always stops with the landlord, even if they use agents. It’s also going to get more complicated with the Renters’ Rights Bill, with the fines increasing, rent repayment orders, and things. And, you know, being a landlord comes with a lot of legal responsibility. 

Suzanne believes it’s irresponsible  and misleading  to use the term  passive income  as that it plays down the fact that being a landlord involves risk and responsibility for the safety of their renters.

This means that landlords need to have the knowledge to be able to supervise their agents as well. Landlords need to “skill up”, and be on top of their legal responsiblities.

It should never be a question of “let and forget” from the landlord’s perspective if they use agents to manage the property. Instead it should be “let and check”. Landlords need to supervise letting agents to make sure they’re doing a good job. It doesn’t go without saying.

The new Renters’ Rights Bill will be increasing the liability on landlords who enter into rent-to-rent arrangements due rent repayment orders and the abolition of Section 21, to the extent that this will be even less of a viable strategy for landlords who are looking for passive income.

Supported living and leasing a property to a social housing provider, on the other hand, will be less risky from a Renters’ Rights Bill perspective as there will be new Section 8 grounds for possession for both.

>> Blog post: #22: Making a success of supported living with Lisa Brown

To be a landlord, you need to have an entrepreneurial spirit, and be comfortable with hard work and risk. Otherwise people would be better off putting their money in a bank, the ultimate passive income.

Suzanne says that landlords must get rid of the mindset of it being passive income as it’s not. Instead, we’ve got to think about how much involvement do we want, and how much control do we want.

The days of being amateur landlords has gone. To succeed, landlords need to have a more professional approach.

Being a landlord, while potentially profitable, involves significant active management by someone (whether or not it’s a letting agent) and should not be considered passive income.

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

This week, Suzanne Smith and Richard Jackson talk about a subject that causes a mixture of angst and even anger among landlords, and that’s EPCs, or Energy Performance Certificates.

EPCs are very important for landlords, as the government announced in September that they’ll be consulting on proposals for private and social rented houses in England to achieve EPC rating C by 2030.

They start with a recap on what EPCs are and the current minimum EPC for private landlords, before discussing problems with unreliability, and government plans to increase the minimum rating to a C and improve the reliability of EPCs.

Suzanne goes through what we know about the new Warm Homes Local Grants that will available for some private landlords from 2025, and they both end with some practical tips and ideas for improving the rating.

>> Ask a question: Click here for question form

The government announced in September that they’ll be consulting on proposals for private and social rented houses in England to achieve EPC rating C or the equivalent by 2030.

According to the latest government figures, the average EPC rating for the private rented sector in England and Wales is D (65) for existing properties. (Rating C starts at 69).

However, the figure of 65 includes flats, which tend to have a higher EPC rating, as well as post-war properties.

“EPC” stands for energy performance certificate. It was originally introduced by the European Union, and was designed to make the energy efficiency of buildings more transparent and comparable between different properties.

It’s a certificate, which shows the rating of the property’s energy efficiency, ranging from the most efficient at an A to the least efficient at a G.

A qualified energy assessor creates an EPC by inputting information into government approved software about the building, its heating, lighting, ventilation, air conditioning

Consequently it’s important that the energy assessor inputs accurate information into the software.

It’s easy to look up the EPC rating of any property by using the Find an energy certificate checker.

This is very useful for landlords as they can look up the EPC ratings of other properties in the same street and see which assessors have done the ratings.

Currently, rental properties must have an EPC rating of either at least an E or for the landlord to have spent up to the cost cap on improvements, ie £3,500 (inc VAT) on energy efficiency improvements.

The landlord must have commissioned the EPC before listing a property, and must use “all reasonable efforts to obtain one within seven days”.

Landlords need to provide tenants with a copy of the full EPC with the assessor’s report before they sign the tenancy agreement. If they don’t do this, they may be unable to serve a Section 21 notice.

An EPC is valid for 10 years, and doesn’t need to be renewed until the property is listed for sale or rent after it expires. . And, of course, that’s soon gonna be phased out anyway. Yeah. And so an EPC is valid for ten years. And a question

EPC ratings are notoriously variable and unreliable, and there’s much academic research which concludes the same. For instance, research by Leeds Beckett University (2019) found that “27% of EPCs in the open EPC record display at least one flag to suggest it is incorrect and estimate the true error rate of the EPC record to be between 365 and 62%”.

Energy assessors often make assumptions (for instance, about the amount of insulation in the loft) that prove to be incorrect. 

It’s important to supervise energy assessors to make sure they make the correct assumptions, and do actually check the loft. If you’ve done any work on the property, for instance put in insulation in the cellar ceiling, go armed with records and photos to show the assessor.

Research for the Passivhaus Trust says that EPCs do not reduce “if you want to drive energy efficiency, and EPC ratings are not the answer […] Using the EPC rating to try and drive lower emissions is unlikely to work in practice.”

The government announced the new Warm Homes: Local Grants in September 2024 for England. This will enable some private landlords to benefit from local authority grants for energy performance upgrades and cleaner heating from 2025.

To qualify for the grants, private landlords will need to meet the following requirements:

Landlords with eligible properties will be able to receive 100% funding for the first property, and a 50% cost contribution for upgrading any additional homes.

The cost cap structure has a cap of £15k per home for energy performance upgrades, and a cap of £15k per home for low carbon heating.

The landlord must declare they don’t intend to raise rents as a direct result of the installation of the energy efficiency upgrades and give consent to participate in a data gathering survey for the Department for Energy Security & Net Zero.

>> Useful resource: The new Warm Homes: Local Grant explained

Increasing loft insulation is a very cost effective way of improving an EPC rating.

Other methods are energy efficient lightbulbs, thermostatic radiator values, a new efficient boiler, insulating the floor and walls, and installing double-glazing.

>> Related episode: What should landlords do about damp and mould?

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

How can landlords intervene to break the cycle of damp and mould in their rental properties?

No-one likes living in a property with black mould, and the death of toddler Awaab Ishak in 2020 after developing breathing problems because of the black mould in the flat his parents rented from a housing association show just how important it is for landlords to take damp and mould seriously. 

There’s often more than one cause of black mould, and it’s important for landlords to get to the bottom of it.

This is another very practical episode for landlords. Suzanne Smith and Richard Jackson discuss the different types of damp, what causes black mould, the practicalities of landlords’ responsibilities, what landlords should do if a tenant reports damp and mould, and some practical tips to help landlords and tenants to stop condensation mould coming back.

>> Ask a question: Click here for question form

The law requires all privately rented properties to be fit for tenants to live and free from serious hazards that are harmful for health.

If damp and or mould are present in a rental property, it’s the landlord’s responsibility to identify the underlying causes of the problem so that they can be addressed.

In fact, Government Guidance published in 2023 states that landlords must take damp and mould seriously, assess the underlying causes with urgency, take appropriate action and keep tenants informed.

Landlords have a legal obligation to maintain the fabric of the building, and remove the source of the moisture to reduce the risk of damp and mould. From a practical perspective, this means that landlords should fix such as misaligned downpipes, blocked guttering, leaking waste pipes, missing roof tiles etc.

Tenants on the other hand are responsible for keeping the property in a “tenant like manner”.

>> Related blog post: What does “tenant-like manner” mean?

>> Related blog post: How should landlords best tackle damp and mould?

The Renters’ Rights Bill is introducing some new obligations on private landlords, not only to comply with a new decent home standard for the PRS, which will the hazards of damp and mould, but also Awaab’s Law.

“Awaab Law’s” is the name given to Section 42 of the Social Housing (Regulation) Act 2023 which requires social landlords to fix reported health hazards within specified timeframe, still to be confirmed.

The Renters’ Rights Bill will extend Awaab’s Law to the private rented sector. They haven’t yet clarified how they will do this, although in the Guidance to the Renters’ Rights Bill says that details will be set out in regulations, after consultation on how best to apply Awaab’s Law to the PRS “in a way that is fair, proportionate and effective for both tenants and landlords”.Second Reading . T

>> Related episode: Election special: What the manifestos say about rental reform

>> Related blog post: Renters’ Rights Bill and the Decent Homes Standard for the PRS

Condensation damp happens when warm moisture vapour that’s created inside a property from breathing, cooking, showering, and drying washing, cools and condenses into water when it touches, cold parts of buildings, such as outside walls and windows.

You often see condensation on a windows and it’s worse on outside walls. Condensation sometimes isn’t visible as it starts to grow in hidden places where there isn’t a lot of air flow or where water pools. For instance the top of skirting boards, the corners, low points on the walls, behind sofas and other furniture on outside walls, and in the corners of the ceiling. It then suddenly becomes visible when the temperature drops, spreading from behind the furniture.

The key causes of condensation are poor ventilation and or inadequate heating.

Condensation is a very common source of black mould.

Water penetration involves water gets into the building from outside due to defects in the walls, or from the inside. Outside sources are missing tiles on roofs, blocked gutters, misaligned downpipes, bridging from a raised ground level where there isn’t a French drain.

When it comes to water on the inside, that includes leaking waste, heating pipes, broken seals around showers, overflowing baths, leaking radiators, you know, a whole host of things.

Water penetration can lead to black mould.

Rising damp, on the other hand, involves water rising from the ground by capillary action. The water carries salts from the ground, which travel up through the wall.

As mould can’t grow where salt is present, if there’s black mould, it’s not rising damp.

Black mould is a fungus which thrives in damp and dark places, and especially the wet conditions caused by condensation.

It’s often found in kitchens and bathrooms, where there is a lot of moisture. It can be a problem in small rooms as they cope with moisture less efficiently.

Landlords are responsible for maintaining the fabric of the building and removing the source of the moisture to reduce, damp and mould. Therefore, it’s important to get to the bottom of what’s causing the black mould, and there might be more than one cause.

Culprits may be leaking internal pipes, leaks from showers and bathrooms due to worn sealant, damaged walls. Sometimes a room may be inadequately heated, and replacing a single panel radiator with a double panel radiator or putting more insulation in the loft may help.

Sometimes tenants don’t ventilate the bathroom properly by opening the window or turning on the extractor. Drying clothes on radiators can create a lot of moisture. This is where education comes in.

Wallpaper can make it worse, as it acts as a damp sponge. Suzanne uses and recommends Ronseal Anti-Condensation Paint (Amazon affiliate link) as it raises the temperature of the wall and helps prevent condensation.

If a tenant reports mould to direct a landlord or to a letting agent, Government Guidance says it’s crucial for the landlord to take it seriously and assess the issue with urgency to identify its severity. They must always identify and tackle the underlying causes promptly.

Landlords also need to keep tenants up to date with what is being done to resolve the issue and the likely time scales.

As mould often appears in November, it’s a good time to inspect a property to see if there are the tell-tale signs behind furniture, or a musty smell.

Finding the cause of the mould is key, as that will determine what action the landlord takes. Suzanne recommends getting a damp expert to try to diagnose the source of the problem.

Tenant education is really important, and it’s a good idea to give tenants a condensation fact sheet, for instance this Condensation Fact Sheet from the NRLA (document only available to members – the code SSAFF15 gives £15 off the first year’s NRLA membership).

>> Useful resource: Checkatrade advice on how to find a good independent damp surveyor

Here are some tips to reduce the risk of black mould:

Inspect the property regularly after any remedial work to check the mould has not come back.

It is really important for landlords to keep records to show how they have responded to reports of damp and mould. Follow up any verbal conversations in writing so there is a written record.

Take a collaborative approach to tackling mould with tenants – joint problem solving and education. It shouldn’t be an “us and them” situation.

Encourage tenants to report it as soon as they see it, as it’s easier to treat in the early stages.

>> Blog post: How should landlords best tackle damp and mould?

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

Following the publication of the Renters’ Rights Bill a little under a month ago, and in honour of the Second Reading of the Bill in the House of Commons today, Suzanne Smith and Richard Jackson answer some of the many questions they’ve received from listeners of Good Landlording about different aspects of the Bill.

The episode is full of practical advice, and explains the areas where things aren’t yet clear. On that note, it’s of course course subject to the usual disclaimer that the Bill still isn’t finalised, and some of the wording is ambiguous.

The questions about the Renters’ Rights Bill cover topics as diverse as rent, what happens when Section 21 is abolished, the transition arrangements, the treatment of antisocial behaviour, pets, students, and the possible impact on leaseholders. There is a worked example of the transition arrangements in the show notes below.

>> Ask a question: Click here for question form

Here are the questions from listeners about how the Renters’ Rights Bill changes rent:

>> Related episode: #27: What the Renters’ Rights Bill changes about rent

>> Blog post: The new rules about rent in the Renters’ Rights Bill

Here are the questions from listeners that relate to the abolition of Section 21 in the Renters’ Rights Bill:

>> Related episode: #26: What happens when Section 21 is abolished?

>> Blog post: How and when will Labour abolish Section 21 no fault evictions?

When the Renters’ Rights Act comes into force, the general rule is that all Section 21 notices that have been served before the Commencement Date (when the new tenancy system comes into force) will still be valid.

However, there are some rules regarding how long a landlord will have to apply for an order for possession after the the notice expires before it becomes time-barred.

The current rules are that the Section 21 notice can’t be served in the first 4 months of a tenancy.

However, if the tenants ignore the notice and don’t move out when it expires, the landlord must apply for an order for possession within 6 months of the date the notice was served.

This rule will be modified for Section 21 notices that expire after the Commencement Date.

All notices that are served before the Commencement Date will still be valid, and the tenancy will remain an assured shorthold tenancy, and the landlord will be able to enforce the notice by bringing an order for possession until they are time-barred.

This means they will need to commence proceedings for an order for possession within 3 months of the Commencement Date, and even earlier if the notice was served more than 2 months before the Commencement Date, otherwise they will be time-barred. There is often a backlog at the courts, so landlords should err on the safe side.

If the Section 21 notice expires more than 3 months after the Commencement Date, the landlord will not be able to obtain an order for possession from the court.

This timeline shows the last date to serve a Section 21 notice and apply for an order for possession, based on a Commencement Date for the new tenancy system (including the abolition of Section 21) on 1 July 2025.

It almost certainly won’t be 1 July, and it’s a random date chosen to help illustrate the point.

Section 21 notice must be served before 4:30pm on the last working day before the Commencement Date

This is the date the new tenancy system comes into effect (random date for illustration purposes).

This is three months from the Commencement Date, and will be be earlier if the landlord served the notice more than 2 months before the Commencement Date.

For our worked example, let’s assume the fixed term runs from 1 August 2024 to 31 July 2025.

The landlord has the earlier of 4 months from the expiry of the notice on 31 July 2025 (30 November), and 3 months of the Commencement Date (30 September) to bring an order for possession. As 30 September is the earlier date, a landlord won’t be able to bring an order for possession after that date.

This is all subject to the landlord needing to bring an order for possession within 6 months of the date they serve the notice.

To recap, the landlord must commence proceedings for an order for possession before the earliest of these three dates, to avoid being time-barred:

Practically, it means that the landlord mustn’t serve a Section 21 notice too early, otherwise they may be time-barred from enforcing it. However, they need to allow enough time to for the court to issue the paperwork. It is strongly advised that landlords take legal advice on this from specialists solicitors. (Send a message via our contact form if you would like a referral).

Landlords also won’t be able to enforce a Section 21 notice for fixed term tenancies that expire on or after that 3 month window following the Commencement Date. Practically the deadline is even earlier as the landlord would need to allow for enough time to apply for an order for possession before the 3 month window ends.

Here is the question about pets:

Here are two questions that cover letting to students:

Finally, here is a question about the potential impact the Bill will have on landlords who are leaseholders:

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

Good tenants are precious, and landlords should do all they can (within reason!) to keep them happy and encourage them to stay.

In this episode of Good Landlording, Suzanne Smith and Richard Jackson talk about how to keep tenants happy. Starting off on the right foot even at the viewing stage, so it creates a positive impression for new tenants, and keeping them happy once they’ve moved in.

They borrow some ideas from the management of employees, and apply them to the management of tenants. This starts with an “onboarding” process to create a positive relationship – or the “psychological contract” in management speak.

It’s not all management theory. The episode is full of lots of practical tips to help landlords look after their tenants and keep the tenants happy.

>> Related episode: #1: What makes a good tenant?

>> Ask a question for the show: Click here for question form

Richard and Suzanne have both worked for American companies, and are used to the concept of “onboarding programs” for new employees.

Onboarding is similar to what we call an an induction in the UK, but is more than that. It involves, welcoming a new employee into a company, showing them the ropes, and explaining what support there is, and also what the expectations are for the working relationship.

This onboarding idea is an important part of what’s called the “psychological contract” between a company and an employee. It’s how both parties understand their relationship outside of their formal contract of employment. It’s all about how the employee feels about their boss and the company. It can be positive, or negative, and it starts at the interview stage.

A similar psychological contract arises between tenants and landlords. Instead of a contract of employment, there’s a tenancy agreement. This psychological contract is how the tenant feels about their rental property and their landlord, and is key to having happy tenants.

We need to think about the psychological contract as starting from the very first moment that we meet the tenant when we’re choosing them through agents or whether we’re doing it ourselves. It continues when they move in and throughout the rest of the tenancy, until they eventually leave.

Suzanne sees the relationship starting once she receives a message from an applicant through the online letting platform. Before they even view the property, she will have sent them suitability questions and may have called them (to avoid time-wasters). She also sends them a a link to the website for her property business, which has FAQs and a pet policy.

At the viewing itself, she explains she’s an Accredited Member of the NRLA, and that she’s a good landlord who takes her obligations seriously and keeps the property in good repair. She sets expectations by saying she is looking for good long term tenants who look after the property, pay the rent on time, and are good neighbours. If they have a pet, she’ll talk about her pet policy, and she tells them she increases the rent each year. This all ensures they know what they’re getting before they make an offer to rent the property and send the holding deposit.

Both Richard and Suzanne show the tenants around the property when they move in, and leave a house manual / welcome pack.

Here are a few tips of things to cover when tenants checkin:

If the landlord has had reviews from tenants, it’s a good idea to send a link to the reviews to applicants, or put a link on the landlord’s website.

Some large landlords may have Google reviews (for instance Chester Homeshare).

An alternative is Marks Out of Tenancy. It’s an independent review site that is specifically set up for tenants to rate their landlords and letting agents. It has both good and bad reviews, and the idea is that it will help tenants see who the good landlords are. A bit like a Tripadvisor for the PRS.

Landlords should encourage their tenants to leave reviews on Marks Out of Tenancy.

Landlords should give tenants a welcome pack or house manual with useful information about the property and the area.

Suzanne leaves a QR code for her electronic house manual, a specific password protected page where she uploads the latest version all the relevant documents such as gas safety certificates, How to Rent guide, and information about the house. Here is a link to a template page of her house manual.

A tenancy agreement is a form of lease, which means the tenants have the right to live in that property, and it “belongs” to them for that period of time. Consequently, the landlord can only enter a single let property with the permission of the tenants, unless there’ is a, an emergency or something like that’s an emergency.

Even if a clause in the tenancy agreement says the landlord or letting agent can enter the property with notice, they still still need to have the tenant’s permission. The right to quiet enjoyment trumps this contractual right.

Sometimes when a tenant reports a repair, they don’t hear anything. It doesn’t mean nothing is happening, as the landlord or agent may be getting quotes or finding someone to come out. But if they don’t tell the tenant what’s happening, they don’t know.

Both Richard and Suzanne will ask the trades person to contact the tenant direct to arrange a visit, provided the tenant is happy with this. Sometimes tenants aren’t around in the day, and they give permission for the landlord or agent to let themselves in.

It’s important to be professional and business-like, and not get emotionally involved. Have excellent customer service, be fair and reasonable, but still set boundaries.

This includes making clear that it’s a two way process: the landlord carries out repairs and they pay the rent and look after the property.

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

The Renters’ Rights Bill makes significant changes to the rules about rent for landlords and tenants in England.

In this podcast episode, Richard Jackson and Suzanne Smith discuss the proposed restrictions on landlords when accepting offers from tenants, the new process that landlords will need to follow to increase rents, the new powerful rights for tenants to challenge and delay even reasonable rent increases, and what’s happening with advance lump sum rent payments.

They also discuss the challenges that landlords and letting agents face with a very short implementation timetable, with the expected “big bang” change over to the new tenancy system by the summer of 2025.

Finally, they share tips on how to successfully navigate the change.

>> Related episode: #26: What happens when Section 21 is abolished?

>> Blog post: The new rules about rent in the Renters’ Rights Bill

>> Ask a question: Click here for question form

Landlords will only be permitted to increase in-tenancy rent by giving at least 2 months’ notice to expire at the end of a rental period, using the statutory process in Section 13 of the Housing Act 1988, and what will be an updated Form 4.

Landlords won’t be able to increase rent by agreement (unless the agreement is to reduce rent after a landlord serves a s13 notice) and all rent review clauses in tenancy agreements will be null and void.

As now, tenants will be able to appeal Section 13 rent increase notices in the First-tier Tribunal, who will determine the market rent. If they do challenge a rent increase at the FTT, any increase in the rent will only come into effect on the date of the FTT determination. In other words, it won’t be backdated to the date specified in the notice.

This will have the effect of delaying an increase in rent that is fair and reasonable.

Given the current delays on a small number of cases in the FTT now and the expected increase in appeals, this may have the effect of what David Smith of JMW terms “rent suppression”.

The Bill does not say in words of one syllable whether advance lump sum payments may be made, and there is some disagreement between lawyers. This needs to be clarified urgently.

If upfront payments are outlawed, and given the expected increase in rent guarantee insurance as a result of the abolition of section 21, unless tenants have a good credit history, they may find it difficult to find somewhere to rent.

When landlords list or offer a property for rent, they will need to set a proposed rent. Landlords will not be permitted to accept offers above the proposed rent from prospective tenants.

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

In this week’s episode, Suzanne Smith and Richard Jackson discuss the practicalities of what will happen when the Renters’ Rights Bill will abolish Section 21 “no fault” evictions for landlords in England.

They cover: what is Section 21, how Section 8 will replace Section 21, the key new and changed grounds for possession, when it’s going to come into effect, and what landlords will need to do to adapt to the new regime. They also share their reflections on this new Bill.

As always, it’s a very practical episode.

PS As a general caveat, it’s still very early days with the Renters’ Rights Bill. The Bill is really difficult to understand, and we may well change our views on how to interpret it. It may also change as it goes through parliament. Before taking significant action, do get advice from a specialist solicitor. You can contact us by sending us a message on our contact page if you would like a referral.

>> Ask a question: Click here for question form

Before we get into the ins and outs of the abolition of Section 21, we wanted to share a promotion for listeners of Good Landlording that helps you, and helps support the podcast.

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Section 21 of the Housing Act 1988 gives landlords the right to evict tenants without needing to give a reason.  So long as that landlord serves a valid notice using Form 6A, which is on the government website, they give  two months notice  plus a few days for service (and assuming the landlord has, of course, served all the relevant documents when they needed to), then the landlord will get the property back.

The landlord doesn’t need to give a reason. It doesn’t mean there is no reason, just that they don’ need to explain their reason.

>> Blog post: How and when will Labour abolish Section 21 no fault evictions?

The only way landlords will be able to bring a tenancy to an end after Section 21 is abolished is by using the Section 8 process.

Section 8 is from the Housing Act 1988 and allows landlords to evict tenants when they have a specific  grounds or a reason. The landlord needs to provide evidence of the ground.

There are two types of grounds:

The key new or amended grounds are:

>> Blog post: The 12 key provisions in the new Renters’ Rights Bill

Government Guidance has said there will be a single implementation date when all tenancies, new and existing, convert to the new system. There won’t be a staggered implementation as with the Conservative’s Renters (Reform) Bill.

Matthew Pennycook has said he envisages that the new regime will come into place by Summer 2025.

>> Blog post: Renters’ Rights Bill timetable – What happens when?

The new Renters’ Rights Bill will completely reset the relationship between landlords and tenants, giving tenants a lot more rights.

Landlords will need to become more involved, more professional. They shouldn’t regard being a landlord as “passive income”. They’ll need to supervise letting agents to make sure they’re doing a good job. Tenant selection and inspections will become even more important. Landlords will need evidence to use Section 8 to evict tenants, so they’ll need to keep good records.

Some landlords may decide to sell some properties that are marginal, and deal with problematic tenants before the implementation. Others may decide it makes sense to sell up before the new rules come into effect.

We’ll continue to share our thoughts as we move towards implementation of the Bill.

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.

Suzanne Smith and Richard Jackson discuss their first impressions of Labour’s new Renters’ Rights Bill in this special episode of Good Landlording, shortly after Bill was published.

They go through the big ticket items in the new Bill, how it compares to the old Renters (Reform) Bill, and what landlords should do to prepare for the new Bill.

They’ll be discussing the Renters’ Rights Bill in more detail in the coming weeks and months, but this episode provides a useful overview of what’s in the Bill, and what’s not.

>> Ask a question: Click here for question form

The Renters’ Rights Bill is very similar to the old Renters Reform Bill, but with a fair few Labour “tweaks”, notably removing the concessions given to Conservative backbench MPs at the Report Stage of that Bill, banning rental bidding, and giving tenants more rights when it comes to challenging rent increases.

There are no dramatic surprises as the main provisions have been well signalled by the Labour government. The amendments that Labour proposed at the Report Stage of the Renters (Reform) bill have been reflected in the new Bill.

>> Useful resource: Renters’ Rights Bill Hub

>> Blog post: How the Renters’ Rights Bill compares with the Renters (Reform) Bill

The Renters’ Rights Bill takes the same approach to the abolition of Section 21 no fault evictions as the Renters (Reform) Bill. However, there will be no delay to the implementation for existing tenancies for the Lord Chancellor’s review of the operation of the County Court eviction process as there was with the Conservative’s Bill.

Instead, there will be a “big bang day” when all tenancies will switch to the new regime, without Section 21, whether they are new or existing tenancies.

The abolition won’t affect notices that are served before the Bill comes into force.

>> Blog post: How and when will Labour abolish Section 21 no fault evictions?

As per the old Bill, assured shorthold tenancies will be replaced by periodic assured tenancies and landlords won’t be able to sign up renters for a minimum period. Renters will be able to serve 2 months’ notice to quit at any time.

Labour have done this to make tenants flexibility so that they’re not tied in and can leave places that are in disrepair. It’s part of their aim of giving more power to renters.

There is no exception for student landlords, and they won’t be able to stop tenants moving out at Easter or after the exams in May.

Contrary to media reports over the summer, the Renters’ Rights Bill does not introduce a hardship test for Mandatory Grounds, which would have effectively turned all Mandatory Grounds into Discretionary Grounds.

Landlords will be pleased that the new Bill contains the new Ground 1A from the Renters Reform Bill which entitles them to possession if they can demonstrate they wish to sell the property.

Despite recent speculation, there are no rent controls in the Bill and no provisions to devolve the power to impose rent controls to local government and the Metro Mayors.

Landlords will only be able to increase the rent by using the Section 13 procedure, and the notice will be doubled from one month to two months.

Renters will have less to lose by challenging a rent increase that is above the market rent in the First-tier Tribunal as the tribunal will only have the power to reduce the rent or keep it the same. In other words, renters won’t run the risk of having the tribunal increase the rent.

The rent increase will come into effect from the date of the decision by the Tribunal, and Tribunal will have the power to relay the increase by two months in the case of “undue hardship” on the part of the tenant.

>> Blog post: How Landlords can increase rent with a Section 13 Notice 

Landlords and letting agents will not be able to encourage applicants to bid over the asking rent in the advert or listing, and won’t be able to accept offers above the asking rent.

As with the Renters Reform Bill, there are provisions on the Decent Homes Standard, the PRS Ombudsman, the PRS Database, no discrimination against families or people on benefits.

There also is wording that extends Awaab’s Law (Section 42 of the Social Housing (Regulation) Act 2023) to the PRS. This will introduce an implied term into tenancy agreements to the effect that all landlords will required to fix reported health hazards within specified timeframes. In other words, not just social landlords.

Landlords should control what they can control. This means getting organised, catching up on any outstanding repairs and focusing on tenant selection.

Follow Good Landlording on your favourite podcast app, so you don’t miss out on new content on the Renters’ Rights Bill.

>> Useful resource: Renters’ Rights Bill Hub

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.