As members of the House of Lords prepare to scrutinise the Renters’ Rights Bill, industry leaders have expressed their concerns over the potential knock-on effects the new legislation could have on tenants.
While many have pointed to the added pressures the Bill will impose on landlords, the risk of unintended consequences for renters has received less attention.
On Tuesday, April 22, the Renters’ Rights Bill will enter the committee stage: a line by line examination in which members of the Lords are able to suggest and debate potential amendments to the proposed legislation.
As it stands, the Bill will introduce a raft of changes including:
- The abolition of Section 21 ‘no-fault’ evictions
- An end to fixed-term contracts for renters
- A ban on landlords accepting offers above the advertised rent
- Mandatory use of the Section 13 notice for rent increases
- The prohibition of pre-tenancy rent payments
These measures are designed to give renters “greater security and stability.” However, according to Oli Sherlock of the Goodlord Group, “significant questions” remain over the potential impact these changes could have on tenants.
Sherlock, Goodlord’s Managing Director of Insurance, said, “This Bill is ostensibly an attempt to make life easier and more secure for ordinary renters. However, with concerns mounting over the impact these changes could have on tenants, significant questions remain about the potential harm this legislation could do to the very people it’s intended to protect.”
He pointed to a number of measures outlined in the Bill which could have negative consequences for renters.
He added, “The ban on bidding wars could unintentionally cause a rapid increase in average rent prices as soon as the new legislation comes into effect. With landlords forced to accept no more than the advertised rent, many will understandably be tempted to up their prices from the off.
“When it comes to Section 21, there is a real risk that removing this power from landlords may lead to more rental disputes going to court. This could see thousands more tenants receiving County Court Judgements (CCJs) for issues such as rent arrears – damaging their credit scores and potentially restricting their access to properties further down the line.
“The extension of the notice period in the event of arrears (increasing from two months to three months) may seem favorable for tenants but the reality is that by the time tenants are in two months arrears it is often hard to reverse their position. Adding a further month to this process will inevitably lead to larger personal debt. Such measures should be focusing on speedy resolutions for both parties, not extensions.”
Most alarmingly, Sherlock fears that the new legislation could trigger an “exodus” among landlords, reducing the supply of affordable housing:
“With the increased pressure of these changes coming on top of the potential costs of complying with measures such as new Energy Performance Certificate requirements, there’s a danger this Bill will be the straw that breaks the camel’s back for many across the sector. Without serious action to address these concerns, we could see a landlord exodus when the new rules are introduced.
“If that happens, the supply of affordable housing will be reduced and rents will only increase, further exacerbating the problems faced by tenants.” v
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