I have already written a fair bit about the Renters (Reform) Bill. However, there is a lot more to say about this Bill which ultimately seeks to make a massive set of changes to the Private Rented Sector.

One of the major changes is in the way that rent is dealt with in private sector tenancies. The Bill prohibits any rental period other than monthly or 28-days. This is intended to ban rents payable quarterly or six-monthly in advance. Any such provision is void and is replaced with one which sets a monthly rental period. I have heard is suggested that there is a difference between rental period and payment period which would allow for the rental period to be specified as monthly but payable six-monthly in advance. I find this an unlikely solution. I doubt that a Court will permit such an obvious evasion especially when the overall reading of the language of the Bill demonstrates an intention to prevent such an approach and when there is previous case law making clear that payment provisions and rental periods cannot be separated in relation to Housing Act 1988 tenancies.

There are also new provisions relating to rent increases. The Bill removes any ability for landlord and tenants to agree a rent increase in the way they do now. Instead, landlords are required to increase rent using the statutory notice procedure under s13, Housing Act 1988. The notice period for an increase in rent has also risen from a minimum of one month to two months so landlords will have to give more notice of an increase. Tenants will also be able to contest that increase before the First-Tier Tribunal. In practice, this is likely to mean that a great many more rent increases will be contested.

This looks a lot like back-door rent control. At the very least it will lead to a degree of rent cooling within tenancies. This will happen largely because of the delays inherent in the proposed process. Any rent increase will automatically be delayed by two months as that is the notice period. It will then be subject to a delay while the matter goes through the Tribunal. Currently, I find that Tribunals are taking around four to six months to deal with rent increase disputes. This is likely to increase if many more of these come before the Tribunal. On making a final decision the Tribunal should set the new rent to start on the date of the notice. However, they can delay that to the date of the hearing if it will cause exceptional hardship. In practice, if a Tribunal has taken six months to hear a rent increase then it is very likely to cause hardship to a tenant to backdate that increase to a notice some six months earlier unless the increase is relatively small. Therefore most rent increases will take around eight months to progress. If the increase is not backdated then that means that in-tenancy rents will always lag behind the market by eight months leading to a subtle hold down factor. In fact, many landlords do not increase rent inside a tenancy if the tenant is good but these changes are likely to mean that landlords will look for annual rent increases, especially if they have to wait a further eight months for them to come through.

It is hard not to conclude that this is an intentional decision by the government to find a way to hold down rents inside tenancies at a time when they are rising faster than ever. I doubt it will be hugely effective and loading more work onto an already busy Tribunal system seems counter-productive.