The legislation, which is now at its report stage in the House of Commons and is due to be enacted in 2024, is intended to “professionalise” the PRS.
Specifically, the Bill is due to legislate for the creation of a register of landlords, new powers to enable local authorities to enforce and protect renters' rights, the creation of an ombudsman for the PRS and the abolition of Section 21 “no fault” evictions.
We work with a wide range of landlords at Leaders Romans Group, and so we see the pressures of changing market conditions and imminent legislation across the sector on an ongoing basis.
While we are strongly in favour of high standards in health and safety, security of tenancies and fair rents, we see the major problem facing the sector as being one of supply and demand.
The English Housing Survey 2022 states that the number of households renting privately has increased by 93% in the past 15 years, while the number of owner-occupied households has grown by just 3%.
The lack of supply to meet increased demand (coupled with increased interest rates) has driven up prices, more so than ever in the past year.
The solution is clear: to meet demand and prevent further rent escalations by increasing supply – and, importantly, ensuring quality in new rental stock.
Fortunately, the signs are positive, as research shows a substantial increase in professional institutional investment in the UK BTR market.
BTR’s rapid evolution — evidenced by our growing work for this sector — gives some hope that the drastic shortage of rental properties will lessen during 2024.
But while these changes will undoubtedly help ‘professionalise’ the sector, this is not the result of the Renters Reform Bill: it is in spite of it.
The rental sector is carving a positive future for itself, one which must be supported by policy, not penalised by it.
If the Renters Reform Bill, in raising standards, pushes the 'rogue landlords’ out of the market it has served its purpose.
However, if the underlying objective is to further reduce stock, it runs the risk of scoring an own-goal. This is because reducing the size of the PRS would increase homelessness before homeownership.
The country desperately needs both privately owned homes supplied by responsible individual landlords and also increased institutionally owned BTR units, is vital to meeting unprecedented demand.
The bar has been raised ahead of the legislation enforcing it, and any “rogue landlords” will have to raise their game or risk losing their tenants.