Renters Reform Bill: Financial Impact Alert for Landlords

Following our March Newsletter, the Renters Reform Bill remains in the committee stage in the House of Lords. It is now expected to receive Royal Assent in late Summer-Autumn rather than spring, as was previously expected.

As your trusted advisors, we will continue to keep you informed. Please see below further updates on how the RRB will change the current landscape of the private rented sector and how this may affect you.

Rent in Advance

From the point of RRB receiving Royal Assent & becoming law, it will no longer be permissible to accept rent payments made in advance of more than one month's rent which extends to both existing & new tenancies.

• Existing tenancies: This will mean that once the current rent period ends, the tenant(s) will continue to pay one month's rent in advance going forward.

• New tenancies: It will no longer be permissible to take any more than one month's rent and a 5-week deposit, in advance.

DC comments: If you are a current Daniel Cobb client, and the rent is paid in advance, we will be contacting you directly to discuss the changes and how you can be best protected going forward.

Rental Bidding

Under the RRB, it will no longer be permissible to accept an offer over the advertised asking price. This means that bidding wars will no longer be an acceptable practice.

As trusted advisors, our Lettings Managers have extensive market insight & know their individual localities intimately, so will continue to ensure that the property is always priced at an optimal rent.

Section 13 Notices

Within the Bill, the government have acknowledged that properties need to remain an economically viable investment for all landlords, so have included a provision where the rent can be reviewed annually & either brought in line with current market rent or current RPI (Retail Price Index) plus 1%.

Daniel Cobb will be reaching out to all landlords annually, with recommendations on a revised rental amount. Once a rent has been agreed, we will issue a Section 13 Notice on your behalf two months in advance of the new rent coming into effect. It is worth noting that the tenant(s) can only contest the rent increase via First Tier Tribunal & this would need to be done before Section 13 notice expires, two months after service.

DC comments: The issuing of section 13 Notices will be in a similar format to our current renewals process, therefore we do not see this changing the landscape materially. 

Rent Protection Insurance

In light of the changes, following on from our previous newsletter, we will be sending further information shortly concerning rent protection and legal insurance packages, and how we can assist you with obtaining such coverage.

Disclaimer: This is not legal advice and should not be relied on as such. If you have any questions, please speak to a solicitor.