Tenant worries brought to light during the Committee Stage of the Renters' Rights Bill
The Renters' Rights Bill, aimed at enhancing tenant security and housing standards, is progressing through Parliament, but industry experts have raised concerns about its potential negative impacts on the rental market. According to Oli Sherlock, managing director of insurance at Goodlord, the bill could lead to an 'exodus' of landlords, reducing the supply of affordable housing and potentially worsening affordability and availability for renters in the short to medium term.
The abolition of 'no-fault' evictions (Section 21) and other regulatory changes have caused many buy-to-let landlords to worry about the long-term viability of their investments. With rising costs, increased tax burdens, and extra workload from new regulations, many landlords are considering selling their rental properties, leading to a reduction in rental supply. This supply contraction is expected to push rents higher and increase homelessness risks, straining social housing and local councils’ resources for temporary housing.
The reduced supply driven by landlords exiting the market can push rents upwards, adding financial strain on renters, especially those already spending a large share of income on housing costs. This exacerbates cost-of-living pressures for tenants.
With Section 21 evictions abolished, landlords must rely solely on Section 8 grounds to regain possession from problematic tenants, which adds complexity and uncertainty to property management. The expanded grounds for possession may not fully compensate for the removal of no-fault evictions, leading to concerns about landlords’ ability to manage tenancies effectively.
The Renters' Rights Bill introduces new requirements such as a landlord ombudsman, a private rented sector database, rent increase restrictions, and bans on discriminatory practices against benefit recipients or pet owners. While aimed at tenant protection, these add layers to landlords’ administrative responsibilities, discouraging continued participation in the market.
Separate but related concerns arise from federal provisions that could restrict local governments’ efforts to regulate algorithm-driven rent-setting and automated tenant screening technology. Experts warn this could let landlords collude via rent-setting algorithms, driving up rents and eliminating local communities’ ability to implement tailored controls.
Industry groups such as the National Residential Landlords Association (NRLA) criticize the government's reform plans as unworkable without clear guidance on key operational questions, adding to uncertainty about the legislation’s practical impacts.
In summary, while the Renters' Rights Bill aims to enhance tenant security and housing standards, experts warn it may trigger a landlord retreat from the rental market, reduce housing supply, increase rents, and impose substantial regulatory burdens, thereby potentially worsening affordability and availability for renters in the short to medium term. The bill is set to progress to the Committee Stage in the House of Lords on 22 April 2025.
- The additional burdens and uncertainty brought by the Renters' Rights Bill could discourage landlords from continuing their business, increasing the risk of a decline in the supply of affordable housing and subsequently driving up housing costs, as rising expenses and bulky regulations might lead them to sell their rental properties.
- Due to the abolition of Section 21 evictions and the increased regulatory responsibilities under the Renters' Rights Bill, business financing for landlords could face potential challenges, as managing problematic tenants becomes more complex and time-consuming, while the new legislation may not fully compensate for the restrictive measures imposed on landlords, potentially diminishing their ability to maintain profitable businesses.
