Renters’ Rights Bill – Focus on Periodic Tenancies
As KPA Property Management continue our dive into the Renters’ Rights Bill, currently moving through Parliament and now on its second reading, today’s focus is on a topic that affects every renter and landlord in England: Tenancy Agreements. If the Renters’ Rights Bill becomes law, it will bring significant changes to the nature of rental agreements across England.
Specifically, it will convert all tenancies into what are known as “periodic tenancies,” meaning they’ll automatically renew on a monthly basis until either the tenant or landlord decides to end the tenancy. Here’s what that might look like for both tenants and landlords.
What This Means for Tenants
Under the proposed legislation, tenants will have more flexibility and control over their living arrangements. Tenants can stay in a property for as long as they like and will only need to give two months’ notice when they wish to leave. This gives tenants the freedom to move without the constraints of fixed term, agreements. For tenants, this added flexibility is a welcome change.
However, there’s a practical aspect to consider. While periodic tenancies allow tenants to move with relative ease, finding a rental property that fits both budget and preference might become more challenging. With rising demand for rentals and landlords leaving the market I large numbers, due to increasing taxes, compliance demands, and a growing number of regulations, the supply of rental properties is expected to decrease.
Therefore, tenants may find that, once they settle in a property they like, it’s in their interest to stay longer, simply due to limited choices.
What This Means for Landlords
On the landlord side, this shift brings both new responsibilities and, potentially, new challenges. With the new Renters’ Rights Bill, landlords can only evict tenants under “reasonable circumstances” and must go through a “clarified” and “expanded” Section 8 process. This means that landlords need to provide valid reasons for eviction, such as non-payment of rent or property damage, and then go through a formal court process if the tenant doesn’t leave voluntarily.
For some landlords, this can be daunting. In recent years, many landlords have exited the market, citing high taxes, compliance requirements, and what they feel is an increasingly negative narrative around property owners. A reduced pool of rental properties may result, and for landlords who remain, the good news is that reduced stock could mean fewer tenant turnovers, as renters may prefer to stay in a property long-term rather than take their chances with the increasingly limited options available.
Short-Term Impact: Expect More Tenant Movement
In the short term, we may see more frequent tenant movement, as renters test out their new rights and explore their options. This could create a bit of flux, with tenants moving more regularly, but it also presents an opportunity.
For landlords, carefully selecting tenants who are likely to stay longer term could be key. Taking time to assess tenant stability and compatibility with the property can help ensure a steady rental income and minimise turnover.
Our advice on this would be to make this part of your tenant selection. When you are taking enquiries and then ultimately doing viewings, be sure to ask tenants about their circumstances and their intentions, in order to gauge how long they intend to stay.
Circumstances can change, but getting to know your tenant applicant should be a part of your selection process already, and we would advise that this now also includes an appreciation of why they want to move and how long they intend on staying. Couple this with providing good quality accommodation and managing the property well and you will be giving yourself the best chance of protection from more frequent tenant change overs.
Overall, these changes are part of a broader shift in England’s rental market that emphasises tenant rights while setting new standards for landlords. The periodic tenancy model is designed to offer stability and flexibility, but how it plays out will depend on both the supply of rental homes and the choices of both tenants and landlords in the coming years.
As Landlords and Investors ourselves, we can help and advise on all aspects of your portfolio. If we can help you then give us a call on 0117 440 6789 or email us here together we can make being a landlord simple, passive and stress free!
KPA are a letting agency specialising in Bristol student rental property, single lets, family lettings, landlord property portfolios and HMOs.
