Renters' Rights Bill: Labour to make biggest change to private rental market since 1988

New legislation is being introduced to make renting agreements more secure, ITV News's Investigations Editor Daniel Hewitt reports

Bruce Willis starred in the first Die Hard Movie, This Morning began on ITV, and Kylie Minogue had her first UK number one single.

Yes I know what you’re thinking, and you of course are right. The year 1988 is famous for one event above all others - the 1988 Housing Act.

If you have rented a property at any point in the last 35 years, or indeed rented out a property, you have certainly been impacted by it in a considerable way.

I will spare you a full breakdown of the Act (you should be so lucky) but it is essentially “year zero” for England’s private rental market - it is the rulebook by which the sector still operates to this today.

It is also, significantly, the year the balance of power tipped away from tenants towards landlords - giving the latter far more rights while burdening them with fewer regulations, and leaving tenants exposed to higher costs and lower security.

Before 1988, private renters enjoyed rights like rent controls, stopping landlords from charging whatever they liked; secure tenancies, which made it very difficult for landlords to evict them; succession rights, allowing them, to pass their tenancy agreement on to a spouse or family member when they died, making it near-impossible for the landlord to reclaim the property.

The Housing Act of 1988 changed all of that.

It removed all rent controls (and with it the power of tenants to challenge rent increases), replaced assured tenancies with assured shorthold tenancies (fixed term contracts dictated by the landlord) and scrapped succession rights.

The number of landlords boomed soon after. Today there are 2.8 million of them in England, five times more than the number of teachers.

With the number of social homes tumbling due to Right to Buy and a lack of building, private landlords have filled the gap.

In 1988 25% of the population lived in social housing compared to 9% in the private rental sector. In 2023 social renters made up 16%, and private tenants almost 20%.

One the most significant parts of the 1998 Act was section 21, which gave landlords the right to claim possession of their property with two months notice outside of a fixed term contract, without having to give a reason.

This became known as a no-fault eviction, as the landlord does not need any grounds for possession and therefore does not have to prove the tenant is in anyway at fault (i.e damaged the property or not paid the rent).

Section 21 exists to this day in England, but is now on borrowed time.

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On Wednesday this week Labour will bring forward its Renters' Rights Bill to Parliament.

Section 21 will be first on the chopping block, seen by tenants and housing campaigners as a draconian measure that has contributed to rising homelessness and instability for families, with some landlords using them as a tactic to avoid doing repairs.

Landlords have warned scrapping section 21 will overwhelm the courts, which will need to process more possession claims where landlords have a legitimate reason.

In place of section 21, landlords will have to rely on section 8 of the 1998 Act instead in order to evict a tenant.

This allows a landlord to seek possession of their property if they wish to change its use (e.g. move back in themselves) or there’s been a breach of the tenancy agreement (e.g. two months rent arrears).

In other words, landlords will still be able to regain possession of their property, they will just need to have a reason.

The last Conservative government had promised to scrap section 21 in its 2019 manifesto, but bowed to lobbying from Tory backbenchers and landlords and instead paused the plans until, it said, the courts had been reformed.

The entire Renters' Rights Bill, previously known as the Renters' Reform Bill, was eventually ditched when Rishi Sunk called July’s snap election.

Labour is likely to pick up where the Tories left off while adding further measures such as extending Awaab’s Law to the private rental sector, requiring private landlords to fix hazardous repairs in a strict time limit.

The law currently only applies to the social housing sector.

The government also wants to extend notice periods and prevent bidding wars between tenants, pushing up the price of the listed rental price.

Exactly how they plan to do the latter is unclear and likely to be difficult to police.

The Conservative government had also planned to scrap fixed term tenancies (6, 12 or 24-month contracts) in favour of periodic tenancies, with no fixed end date. Labour is likely to adopt this plan too as part of a shift in rights and protections towards tenants.

The reforms attempt to reverse one of the two key elements of the 1988 Act - tenant security - but is unlikely to address the other - the price of rent.

Labour is under pressure from Shelter and other housing campaign groups to introduce a form of regulation to curb the ever rising cost of rent.

While in opposition, a research paper commissioned by the Labour Party recommended an annual cap of how much landlords can increase rent by, linked to inflation or wage growth.

Now in government however, Labour is likely to reject the plan.

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Critics argue not limiting rent rises will undermine the scrapping of section 21, because landlords will be able to increase rent to unaffordable levels, forcing tenants to eventually leave anyway.

Margaret Thatcher changed the housing market in England beyond recognition. (The 1998 Act also did lots of other significant things like create the modern Housing Association and speed up the transfer of social homes away from local councils - but we won’t get into that here).

In 1988, as Ms Thatcher continued to sell off England’s council housing, she wanted (needed) to incentivise private landlords to fill the gap.

Today, there is a chronic shortage of social homes (thanks in part to Ms Thatcher and the subsequent governments that have followed) and landlords are warning the housing crisis will only get worse if their rights are eroded, pushing them out of the market.

The Starmer government though will press ahead, believing the balance of power has tipped too far towards landlords to the detriment of tenants, in what will be the biggest change in the private rental market in 35 years.

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