Government admits Renters’ Rights Bill could drive rent increases

Yes the government might admit rents will increase. But, won't do anything. The way to help is to reverse Section 24

Reply to the comment left by John Grefe at 03/12/2024 - 10:27
I would go further, the government should revert to the 1988 Housing act and repeal nearly all anti tenant legislation. The AST has worked well for the last three decades, why fix something that ain't broke.

Not increasing rent for existing tenants was fairly standard practice when interest rates were stable and we weren't being bombarded with a myriad of extra requirements and legislation. That was a bygone era.

Now is a completely different environment. Many of us are still playing catch-up with rent. We suddenly hit a hugely inflationary period with tenants paying below market rent (as we hadn't had annual increases). Those of us in the bills inclusive HMO market experienced huge cost increases. Utility contracts weren't honoured but we had to honour our tenancy agreements. Then mortgage rates shot up. Mortgage payments more than doubled as we came out of our previous mortgage fix. Plenty more will be increasing over the next 3 years. Section 24 on these huge mortgage increases is a major problem. Although Section 24 only affects some landlords it affects most tenants. Either because they are housed by portfolio landlords who are impacted by Section 24 or because their landlord keeps pace with market rent which is influenced by portfolio landlords.

£12 per property per year. What a bunch of idiots. They ought to be embarrassed to publish such nonsense.

Meanwhile, additional property SDLT increased by 2% in the Halloween Budget. For a modest £150k property, that’s £3,000 that I’d want to recover over 10 years. So, I’d add £30 per month to cover the initial cost and the value of my money over 10 years.

"The impact assessment says: “It is likely that landlords will pass through some costs of new policies to tenants in the form of higher rents – to offset those costs and maintain a degree of profit."
The language is telling. "A degree of" suggests a small amount, perhaps contrasted with no profit at all but not much. What other businesses are expected not to pass on costs?
"A Ministry of Housing, Communities and Local Government spokesman told The Telegraph,: “The evidence shows that landlords value good tenants – and are therefore less likely to raise rents for sitting tenants."
Yes, but. Not all tenants stay long term. Making all tenancies periodic and allowing tenants not to commit to the tenancy for more than two months will not encourage keeping rents low.

“Landlords will also only be able to raise the rent once a year using the existing section 13 process and our reforms will empower tenants to challenge an unfair rent increase at the first-tier tribunal.”
Suspending rent increases whilst matters wind their way slowly to the tribunal will not lead to lower initial rents.
"It is considered good practice in the property industry to increase rents annually to account for inflation and stay in line with market rates."
Yes, and prudent landlords who in the past might not have increased rents for "sitting tenants" (the writers of the assessment don't seem to realise how terrible those words are to landlrods who remember the Rent Acts) will now do so as often as they can.
If you increase costs and increase risks, business people demand more money to compensate. That is not difficult to understand unless you have only ever worked in the public sector and read the Grauniad as your main source of news

Reply to the comment left by Ian Narbeth at 03/12/2024 - 11:47
Ian on the subject of rent increases, the Act will permit increases once a year via section 13. If I increase my rent on 1 Oct and the tenant challenges the rent, then I can only COLLECT the increase from the date of the tribunal decision, but surely the increase dates back to 1 Oct, albeit not collectable. Can I then increase the rent from the next 1 Oct? Or have the government snookered us again?

Reply to the comment left by TheMaluka at 03/12/2024 - 12:16Snookered I am afraid:
https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill/82ffc7fb-64b0-4af5-a72e-c24701a5f12a#tenancy-reform
"We will reform how the Tribunal works to ensure tenants feel confident in challenging poor practice and enforcing their rights. Currently, tenants face the risk that the Tribunal may increase rent beyond what the landlord initially proposed – we will end this, so tenants never pay more than what the landlord asked for. We will also end the practice of backdating rent increases – with the new rent instead applying from the date of the Tribunal determination – to ensure tenants are not unexpectedly thrust into debt. And, in cases of undue hardship, we will give the Tribunal the power to defer rent increases by up to a further 2 months."

Someone needs to explain moral hazard to the Government. There is no downside to every tenant challenging every rent increase, however modest. The longer it takes, the longer the old rent applies. I can see the tribunals getting clogged up with spurious appeals.

Reply to the comment left by Cider Drinker at 03/12/2024 - 11:28
My local council recently mandated a whole interconnected smoke and fire warning system for all rented property. They said it would cost less than £200 per property.

Well I just got the bills in, and its £450 per property, PLUS additional maintenance costs long term.

Councils couldn't organise a P*** up in a brewery, let alone estimate costs.

Reply to the comment left by Ian Narbeth at 03/12/2024 - 12:31
So to clarify I'm assuming that if I want to increase a rent I would for example serve notice on the 1st November (2 months notice) then tenant goes to tribunal ( why wouldn't they? they cant lose) tribunal takes 6 months to decide (pretty realistic once they become bogged down ) so that's June the next year before the rise comes into effect I then can't serve notice of increase for 10 months after that date in June that's April the next year to take effect from June and the cycle begins again
How can you do annual rent increases to follow "best practices "
If you wanted to
Yet again liebour are showing how clueless they are

Let’s not forget the impact of inflation on rental costs.

Labour’s NI hike and minimum wage hike will see inflation rise sharply next year. If inflation rises, interest rates rise. If interest rates rise, mortgages rise. If mortgages rise, rents rise.

Welcome to merry go round.