Phil Cooper, letting partner at Arnolds Keys, discusses the potential impact of the Tenants’ Rights Act.
We now have some more details on the proposed Tenants’ Rights Bill and, given what was in the Labour manifesto, it should come as no surprise that the pendulum appears to be swinging back in favour of tenants.
In case there was any doubt, 10 Downing Street set out its position shortly after the King’s speech: “The Government is determined to level the playing field between landlord and tenant by offering tenants greater security, rights and protection, and by cracking down on the minority of unscrupulous landlords who exploit, mistreat or discriminate against tenants. This includes unfair rent increases intended to force tenants out, or bidding wars between tenants.”
As with many of these claims, details are unfortunately lacking and, although rare, the latter has arisen from the underlying issue of supply and demand and is certainly something that responsible landlords and agents should not encourage.
Regardless of the election victory, the abolition of Section 21 evictions would have been likely; the new Bill suggests it will go further by giving tenants the right to challenge rent increases and applying a ‘decent housing’ standard to the private rental sector, although mechanisms and provisions for both elements already exist.
Phil Cooper, letting partner at Arnolds Keys (Image: Arnolds Keys)
Landlords facing rising costs – particularly high borrowing rates – may fear that their ability to raise rent to cover, or at least contribute to, those costs will be compromised.
After all these years of rock-bottom interest rates, some landlords have stopped raising rents regularly and are now faced with the prospect of having to implement large increases or incur losses.
This highlights the importance of the ‘little and often’ strategy in rent adjustments to ensure that excessive rent increases are not required, to smooth the way for tenants by avoiding huge rent shocks and to enable tenants to manage their budgets appropriately.
Rent controls were not part of the manifesto, nor are they part of the new law, but the possibility of them being implemented at some point in the next few years cannot be ruled out. England is an outsider in Europe in having no rent controls; a government seeking to draw on the considerable voting power of renters might do well to consider such a policy.
10 Downing Street says it “values the contribution of responsible landlords who provide high quality homes for their tenants”, and we must hope that is true.
Strengthening tenants’ rights must not lead to landlords being further beaten to the point where they come to the conclusion that it is no longer worth it. In such a case, the biggest losers would be the tenants who would no longer be able to find somewhere to live.
Phil Cooper is a letting agent at Arnolds Keys. Visit arnoldskeys.com
