The renters’ rights bill, which passed its second reading in the House of Commons this week, is set to be the biggest change to the private rented sector in England for over 30 years with proposed changes to ban Section 21 evictions, the introduction of open-ended tenancies and new requirements for property standards and rent increases (Report, September 12).
Propertymark is the UK’s leading membership body for property agents. While we want to see improved standards, the government must fully understand the impact these changes will have, with agents left wondering how this legislation will help meet the much-needed demand for homes for people to rent.
Our monthly Housing Insight Report shows on average eight registrations for each available property with fewer new properties coming on to the market. The bill in its current form is highly likely to exacerbate this situation with more landlords withdrawing homes from the private rented sector, frequently moving them to short-term lets.
Tax is reducing the investment appetite of new and existing landlords with higher rates of stamp duty on buy-to-let properties and the withdrawal of tax relief on mortgage interest costs. Ministers must recognise the financial implications of this bill and the impact it has on the supply of homes to rent.
Through the renters’ rights bill, the UK government must commit to reviewing all costs and taxes impacting on private landlords to ensure landlords continue in the market and more landlords can meet the demand for homes to rent.
Additionally, with no security of a rental term for a landlord beyond the proposed two months’ notice period and no long-term guarantee of rent, we would expect to see a significant number of landlords attracted to higher rents in the short-term letting market, which also offers them the advantage of being unregulated.
With landlords exiting the private rented sector, the result would be a reduction in the rental stock available for long-term tenants and increased rents. To help mitigate this, the government must also 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.
Timothy Douglas
Head of Policy and Campaigns, Propertymark, Warwick, UK
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