The UK property sector faces growing anxiety over the impending Renters’ Rights Bill, set to reach its Report Stage in the House of Commons tomorrow.
A recent survey commissioned by Propertymark reveals that 50% of property agents are deeply concerned about the Bill’s potential impact.
Many fear increased administrative burdens, a shift in market dynamics, and the broader implications for the private rental sector.
The survey sheds light on additional worries plaguing property professionals. Some 12% of respondents expressed unease about stamp duty reforms set to take effect in April 2025, while an equal percentage flagged concerns over Energy Performance Certificate (EPC) reforms.
MARKET EXIT
And 7% were worried about landlords exiting the market and the resulting reduction in supply.
Other issues, each troubling 3% of respondents, included the 2024 Autumn Budget, leasehold and commonhold reform, declining tenant and buyer numbers and fluctuating interest rates.
Lesser concerns, cited by just 1% of respondents, included the 2025 Spring Budget on 26 March, the Planning and Infrastructure Bill, surges in tenant or buyer activity and other economic changes.
The proposed legislation seeks sweeping changes to the rental landscape. It aims to end ‘bidding wars’ between tenants and abolish Section 21 ‘no-fault’ evictions, replacing them with new possession grounds.
Tenants will also gain the right to keep pets, safeguarded by pet insurance policies. Fixed-term tenancies will be abolished, transitioning to open-ended agreements.
The legislation further mandates compliance with the Decent Homes Standard and Awaab’s Law, introduced to prevent tragedies like the death of Awaab Ishak from respiratory issues caused by poor housing conditions.
A new landlord-tenant ombudsman and a digital database for essential rental sector information will be established.
Additionally, local authorities’ enforcement powers will be enhanced, stricter Rent Repayment Orders will be implemented and discrimination against tenants receiving benefits or with children will be banned.
UNINTENDED CONSEQUENCES
While Propertymark supports raising standards, it warns of unintended consequences. Timothy Douglas, Head of Policy and Campaigns at Propertymark, addressed these issues during an evidence session with the Public Bill Committee in October 2024.
He highlighted concerns about shrinking supply, as evidenced by Propertymark’s Housing Insight Reports, which reveal that there are seven prospective tenants for every available property.
He also warned that the bill’s measures could undermine investor confidence and strain an already overburdened system.
BALANCING TENANT PROTECTIONS
To balance tenant protections with market stability, Propertymark proposes several measures.
It advocates for the retention of fixed-term tenancies to ensure stability for tenants and predictability for landlords.
Energy efficiency requirements should be tailored to avoid a “one-size-fits-all” approach. The organisation stresses the importance of improving the court system to replace Section 21 with tested and efficient alternatives. It also calls for mandatory professional standards to align private sector property managers with their social housing counterparts.
STUDENT RENTAL MARKET
Additionally, Propertymark recommends specific support for the student rental market, such as extending Ground 4A possession rights, allowing monthly student loan payments, and permitting rent payments in advance.
The anxiety among landlords mirrors that of agents.
Seven out of 10 (72%) worry about the abolition of Section 21, while 69% are concerned about the end of fixed-term tenancies, and 62% fear the removal of rent review clauses.
DECISIVE STAGE
As the Renters’ Rights Bill approaches a decisive stage, the debate shines a light on the tension between enhancing tenant protections and ensuring a viable private rental market.
Indeed, the coming months will determine whether the legislation’s promises of fairness and decency can coexist with a healthy, functioning rental market.
As Nathan Emerson, Chief Executive at Propertymark, says: “It is vital that as this legislation passes through Parliament that the UK Government listens to the many concerns that agents still have about this legislation in the new year.
“There are other issues in the private rental sector that the UK Government must concentrate on, such as a shortage of supply and the taxes and regulations that are weighing heavily on landlords.
“The UK Government must ensure that it gets its priorities right so that both tenants and landlords can benefit from a stable and affordable private rental market.”
The Renters’ Rights Bill marks a potential turning point in the UK rental market.
While it aims to create a fairer system for renters, the challenge lies in achieving this without destabilising the market and discouraging investment. Only time will tell if it really can achieve its aims.
