Breaking news: Renters’ Rights Bill to cost £33 million
The Ministry of Housing, Communities and Local Government has this afternoon published its impact assessment for the Renters' Rights Bill, estimating the net cost to businesses will total £33 million a year.
According to the Government’s assessment the cost for landlords will be £12 per rented property annually and for agents £1,700 a year.
It says it does not predict a mass exodus of landlords from the sector as a result of the changes – the biggest shake up of the private rented sector in more than 30 years.
According to the document the main costs – excluding Awaab’s Law and the Decent Homes Standard - fall on landlords, although it argues there will also be a gross benefit of £9 per rented property per year to landlords, coming from a reduction in letting agents' fees.
Using the same rationale, it says tenants are expected to benefit by £28 per household per year from this, arguing the greater security of tenure that will come about as a result of the Bill, will lead to fewer moves, therefore ‘avoiding the associated costs and disruption’.
Supply crisis
The NRLA has argued changes will impact supply, with evidence suggesting some landlords are already leaving the sector – with even more planning to do so over the next 12 months.
However the Government document says that while this is a ‘risk’ it does not expect supply to take a major hit.
It says: “There is a risk that costs from the legislation may result in some landlords leaving the sector. This is difficult to estimate precisely, though we would expect it to be substantially mitigated by the additional cost per rented property being a very small fraction of average annual rent and asset value.
“The available evidence to date does not suggest that similar reforms to abolish section 21 in Scotland have negatively impacted supply, nor changes introduced by the 2019 Tenant Fees Act, despite concerns they would.
“The most recent English Housing Survey data shows the proportion of PRS households has remained relatively stable since 2013 – 14, suggesting that there have been no significant impacts on supply to the sector from various reforms.”
It goes on to say that those landlords facing the greatest costs as a result of the new measures will be the ones currently providing the poorest service to their tenants.
More information
To read the impact assessment in full click here.
Check out next week’s news pages and enewsletter for a deep dive into the content of the assessment, and for all the latest on Renters’ Rights visit our dedicated members’ hub here.
