0:02 AM, 8th November 2024, About 2 hours ago
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The Renters’ Rights Bill will push landlords out of the sector and into short-term holiday lets, warn MPs.
During a Renters’ Rights Bill Committee meeting, some MPs expressed concerns about the bill’s potential impact on the private rented sector.
However, Matthew Pennycook, the Housing Minister, claimed, “there is no evidence of a landlord exodus.”
The Renters’ Rights Bill will immediately ban Section 21 and apply Awaab’s law to the private rented sector.
Gideon Amos, the Liberal Democrat MP for Taunton and Wellington, highlighted evidence suggesting that landlords may switch towards short-term holiday lets in response to the Renters’ Rights Bill.
He said: “Landlord groups such as the National Residential Landlords Association and Dexters letting agency have argued that the Bill risks pushing landlords out of the sector and into short-term holiday lets.
“The NRLA estimates a 1% to 2% drop in rental stock. There is agreement on the topic across the sector, and there is a plausible worry that without any additional controls there will be a leeching of stock into more short-term holiday lets.
“For locations that particularly suffer from that phenomenon, the consequences could be the closure of businesses and services locally.”
However, Mr Pennycook dismissed the idea of landlords leaving the sector claiming “good landlords have nothing to fear”.
He said: “It is important to state that this government value the contribution made by responsible landlords who provide quality homes to their tenants, and believe they must enjoy robust grounds for possession where there is good reason to take their property back.
“As such, good landlords have nothing to fear from our reforms and should be in no rush to change legitimate business models, as I have said repeatedly.
“The private rented sector has doubled in size since the early 2000s. There is no evidence of an exodus since reform was put on the table by the previous government. Our proposals will ensure that landlords have the confidence and support they need to continue to invest and operate in the sector.”
Mr Pennycook’s comments come despite mounting evidence that landlords are leaving the sector.
The Guild of Property Professionals argues that the Renters’ Rights Bill will spark “an exodus,” while the NRLA warns that landlords are now more likely to sell than buy.
Elsewhere during the Committee meeting, co-leader of the Green Party, Carla Denyer, argued the Renters’ Rights Bill must introduce rent controls.
She told the meeting: “I encourage the government and the Committee to look to European countries where rent caps co-exist with large private rented sectors, such as in Germany, where more than half the population rents privately and where they also have in-tenancy rent caps.
“The argument against rent controls is that they will break the private rented sector, but it is already broken, with immediate and severe consequences right now, for all the reasons we heard about in the evidence sessions.
“However, we need to talk about the risks attached to any policy of in-tenancy and between-tenancy rent controls. Any system to introduce them needs to be carefully designed and built.”
Mr Pennycook told Ms Denyer the government that introducing rent controls “could have a detrimental impact on tenants and cause supply issues”.
He added that the Renters’ Rights Bill strikes the right balance, emphasising that “this legislation is just one of several steps we’re taking to address affordability pressures in the private rented sector.”
