RENTERS RIGHTS BILL – WHAT IT COULD MEAN FOR LANDLORDS & TENANTS

We now have a few more details of the proposed Renters Rights Bill, and given what was in the Labour manifesto, we shouldn’t be surprised that the pendulum appears to be swinging back in favour of tenants, writes Phil Cooper.

In case there was any doubt, 10 Downing Street set out their position shortly after the King’s speech, saying, ‘The Government is determined to level decisively the playing field between landlord and tenant by providing renters with greater security, rights and protections and cracking down on the minority of unscrupulous landlords who exploit, mistreat or discriminate against tenants with bad practices such as unfair rent increases intended to force tenants out, and pitting renters against each other in bidding wars.’

As with many of these claims, the detail is sadly lacking and although rarely seen, the latter issue is born out of the underlying problem of supply and demand and certainly one that responsible landlords and agents should not be encouraging.

The abolition of Section 21 evictions was probably going to happen whoever won the election; the new Bill suggests it will go further by empowering tenants to challenge rent increases and applying a ‘Decent Homes’ standard to the private rented sector, despite mechanisms and provisions already existing for both elements. 

Landlords facing increased costs – especially high interest rates on finance – could be worried that this may compromise their ability to raise rents to cover or at least contribute towards those costs.  After so many years at rock-bottom interest rates, some landlords have refrained from putting up rents regularly, and are now faced with the prospect of imposing large increases or operating at a loss.

This highlights the importance of the ‘little and often’ strategy when it comes to rent reviews, to ensure that excessive rent increases don’t become necessary, to smooth the way for tenants by avoiding huge rent shocks and to enable tenants to budget appropriately.  Rent controls were not in the manifesto and do not form part of the new Bill, but the possibility of it being implemented at some stage in the next few years cannot be ruled out.  England is something of an outlier in Europe in not having rent controls; a government chasing the considerable voting power of tenants may well consider it worthwhile pursuing such a policy.

10 Downing Street says it ‘values the contribution made by responsible landlords who provide quality homes to their tenants’, and we must hope that this is true.  Enhancing tenants’ rights must not mean further beating of landlords with a stick to the point they decide it is no longer worth it, because the biggest losers if that happens will be tenants who can no longer find somewhere to live.