Propertymark warns of ‘unintended consequences’ of the Renters’ Rights Bill

The Renters’ Rights Bill could have severe ‘unintended consequences’ for the private rented sector (PRS), Propertymark warns.

The organisation’s head of policy and campaigns, Timothy Douglas, told MPs on the Committee for the Bill that there are issues with the proposed legislation.

He says the Bill fails to address the ‘huge demand’ for rental properties, could disincentivise investor confidence and requires ‘more clarity’ for letting agents.

Mr Douglas points to Propertymark’s latest Housing Insight Report which shows that there are 10 new applicants registered for every available property.

He also warned that the Bill adds an ‘additional layer’ of regulation through the Landlord Ombudsman and the Decent Homes Standard, which could impact older properties.

‘Many unintended consequences’ from the Bill’

Propertymark is also warning of ‘many unintended consequences’ from the Bill which could make tenants’ circumstances worse.

For example, it says that students and other tenants who prefer to stay in a rental property for a specific period via a fixed-term tenancy, will not be able to do so.

Propertymark is keen to ensure this option remains so that students have certainty when they start the academic year.

Also, the proposed new laws do not prioritise guaranteeing a greater supply of rental homes to help meet ever-growing demand, an aspect that contributes towards escalating rent prices.

Helping landlords understand the legal complexities

Propertymark’s chief executive, Nathan Emerson, said: “Without recognising the critical role that letting agents play in guaranteeing tenants’ standards improve and helping landlords understand the legal complexities of existing and new legislation, the Renters’ Rights Bill is unlikely to deliver the fairness and stable rents that many tenants deserve.

“There must be focus on encouraging investment to help boost housing supply as we continue to witness demand further increase.”

He added: “The Bill risks being rushed through Parliament and create serious consequences that will be very difficult to undo.”

Section 21 ‘no-fault’ evictions

The Bill aims to address tenant ‘bidding wars’, end Section 21 ‘no-fault’ evictions and introduce provisions to allow pets in rental properties.

However, Propertymark believes that the government’s proposals must consider the costs and taxes affecting private landlords to ensure they remain in the PRS.

The professional body also advised the government to implement the registration of short-term rental property requirements in the Levelling Up and Regeneration Act 2023.

This would, it says, create a more level playing field for landlords.

The removal of Section 21

There are also concerns that the removal of Section 21 could overwhelm the courts, and that alternative arrangements or increased investment are needed to address the potential demand.

Propertymark also suggests introducing mandatory grounds for eviction, such as breach of contract, persistent late rent payments and damage to the property.

There is also a need, it says, for deposits to be more flexible for those renting with pets.

Also, introducing minimum standards for the PRS would help to improve standards and ensure parity with property managers in the social rented sector.

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