Tenants, while you may be excited about the potential benefits of the Renters’ Rights Bill, it’s important to consider what the potential impact will be on your renting life.
I know it all sounds like sunshine and flowers at the moment, but I don’t think you will like it. Firstly, Labour’s aim to ‘level the playing field’ does more than that. It tilts the field in your favour.
That’s good, right? No, it’s not and here I’m going to explain why.
The notion that landlords can’t refuse to rent to tenants on benefits is a good place to start. Tenants on benefits can’t afford to rent most rental homes and very soon, they’ll struggle to find a landlord who will want to rent to them.
But how can that be, I hear your tenant campaign friends at Generation Rent wail. Well, one easy way is to make the referencing process stricter. That will see the need for a guarantor. A home-owning guarantor, preferably. Can’t or won’t pay the rent? No problem, let’s get your guarantor to pay.
Referencing also means that if you’ve had arrears before, then it’s a ‘Nope’ from me.
Poor credit history? Nope.
Want to keep a pet? Landlords won’t be able to ‘unreasonably’ refuse the request. Leaving aside the number of tenants who don’t ask permission, this is an interesting one.
Most landlords will be OK with pets, especially with the promise of having insurance to cover the potential damage.
But here’s the kicker. Why should a tenant with a glass case of snails be considered the same as someone with a football team of Bully XLs?
We can’t act on rent arrears
Another big issue is the notion we can’t act on rent arrears until we get to three months. Really?
We allow a tenant to live for free in our property while we might have to pay the mortgage. I don’t think so. Then we’ll get stuck in the legal process of trying to evict for non-payment which means still no rent and the landlord going into debt.
I’m also rather worried about Angela Rayner’s aim to prevent evictions for ‘economic reasons’. There’s no clarity about what that actually means but I’m guessing that arrears not being a ground for possession will have a devasting consequence.
We will have no choice but to sell. The alternative is a non-paying tenant who we can’t evict – ever!
Which brings me to the ending of Section 21 so-called ‘no-fault’ evictions doesn’t mean you are being evicted without reason. It might be arrears, for anti-social behaviour or the landlord wants to sell.
It’s our property and we should be allowed to do what we want with it.
I’ve said that I’m looking forward to having to give reasons for eviction because we will see the true scale of the reasons why evictions are happening. It’s going to be a surprise to learn that possession isn’t done for ‘no reason’.
It also means we won’t see eviction numbers fall, and tenants will still – unfortunately – be made homeless.
Landlords decide to sell
So, the upshot is that fed-up landlords will decide to sell, and those rental homes will leave the sector. Fewer homes mean higher rents.
This simple lesson in economics is not the landlord’s fault. It really isn’t.
Here’s a quick rundown of other issues that tenants need to appreciate:
- Security of tenure
- Tenants want: Protection from eviction without good reason
- Landlords want: Repossess our properties if we need to sell or carry out essential repairs - Rent controls
- Tenants want: Rent controls to help make housing more affordable for tenants
- Landlords want: No rent controls since this will discourage PRS investment – plus rent controls have never worked anywhere in the world (see Scotland…) - Condition of properties
- Tenants want: The right to live in safe and habitable properties
- Landlords want: Tenants to be responsible for looking after the properties they live in (Most landlords offer quality homes anyway…) - Landlord database
- Tenants want: The details of the landlord and record of the property (landlords have to give their contact details currently)
- Landlords want: A rogue tenant database to help protect landlords from renting to tenants with a poor track record - Bidding wars
- Tenants want: An end to bidding wars
- Landlords want: Not to be blamed for tenants over-bidding on a property because there’s nowhere else to rent - Decent Homes
- Tenants want: The Decent Homes Standard to meet a minimum level of quality and safety
- Landlords want: A standard that is fair – and enforced so criminal landlords can’t escape it - Enforcement
- Tenants want: Local authorities with powers to enforce the law and protect tenants’ rights
- Landlords want: An end to selective licensing and for councils to actually inspect rented homes instead of just taking the licensing cash - Ombudsman service
- Tenants want: An ombudsman service to help resolve disputes between landlords and tenants
Landlords want: An ombudsman service that is fair and equitable without a political axe to grind.
How it affects landlords
If, as a tenant, you are for the Renters’ Rights Bill, regardless of how it affects landlords then ask yourself this question: If YOU were a landlord, would you support the Bill? If not, why not?
The problem is that landlords are being put at a distinct disadvantage and are more likely to sell. Be honest, would you put up with restrictions on who can live in your property? Would you live with struggling to gain possession?
Renters’ Rights Bill: Propertymark raises concerns over fixed-term tenancies
The government must appreciate the potential impact of ending assured shorthold tenancies under the Renters’ Rights Bill for periodic tenancies, Propertymark says.
It warns that not only will the students’ let market be affected, but a fixed-term tenancy provides tenants with security of tenure and landlords with guaranteed rent payments.
This type of tenancy is often preferred by tenants such as nurses working on fixed contracts, international students and families seeking stability due to children’s schooling.
However, if fixed-term tenancies were eliminated, all tenancies would effectively become short-term lets.
This, combined with limited housing supply, could lead to a significant increase in rents for individuals, couples and families seeking long-term homes.
Recognise the unintended consequences
The organisation’s head of policy and campaigns, Timothy Douglas, said “property agents recognise that the UK government wants to increase protections and security for tenants, but they must recognise the unintended consequences of the proposals in the Renters’ Rights Bill and not reduce choice and flexibility for tenants.
To support renters, we want to see fixed-term tenancies retained as an option and request that an impact assessment is done on the government’s plans to remove fixed term tenancies and shared publicly with the sector. The government must enact the registration of short-term rental property requirements as passed in the Levelling-up and Regeneration Act 2023 alongside these reforms to level the playing field for landlords and the long-term rental market."
Impact on the student sector
Propertymark says that the proposed Ground 4A as currently drafted refers to houses in Multiple Occupation which, by definition, is three or more sharers.
The current draft of the Bill limits rent instalments to one month’s rent, which could create challenges for students who rely on termly Student Maintenance Loans.
Mr Douglas says “to support students, the government must extend Ground 4A to one or more student sharers, move Student Maintenance Loans to monthly instalments and/or, allow rents in advance for student renters and others to keep flexibility and access to housing.”
Landlords would also face increased uncertainty without the security of a fixed rental term beyond the two-month notice period.
This could incentivise them to shift towards the unregulated short-term rental market, which offers higher rental yields.