The government’s recent acknowledgment that the Renters’ Rights Bill could lead to rent increases has stirred significant debate.
The bill proposes immediate abolition of Section 21 evictions and the extension of Awaab’s Law to the private rented sector. While some landlords may raise rents to cover the additional regulatory costs, the government maintains that landlords with long-term tenants are less likely to do so.
The government’s impact assessment suggests that landlords may pass some of the costs of these new regulations to tenants by increasing rents, though it estimates these costs at only £12 per property annually. However, landlords are concerned about the rising operational costs, such as interest rates, and may be forced to raise rents more significantly, especially as 42% of landlords with portfolios of 4-10 properties plan to do so.
Additionally, the Ministry of Housing, Communities and Local Government emphasised that landlords value long-term tenants, which may deter rent hikes. Furthermore, rent increases would be limited to once a year through the existing Section 13 process, and tenants would have the option to challenge unfair hikes through the first-tier tribunal.
However, with operational costs rising and the prospect of some landlords exiting the market if they can’t recover costs, the impact of these new regulations could still be a mixed bag for renters, with some facing higher rents and reduced availability of rental properties.
