Renters' Rights: A stick to beat us with?

Despite months of targeted campaigning, politicians are still failing to grasp the potentially devastating consequences of the Renters' Rights Bill on everything from the supply of homes to let to rent levels. NRLA Policy Director Chris Norris shares his thoughts on the challenges we have faced, and what needs to happen next to secure the future of the private rented sector for landlords and tenants alike.

Last week you may have read that the NRLA led industry voices in objecting to the latest amendments to the Renters’ Rights Bill. The topic of this latest critique was the Government's apparent plans to limit the amount of rent which landlords may accept ‘up front’ to secure a tenancy.  

We were joined in voicing our concerns by the British Property Federation, Propertymark, Goodlord, and Leaders Romans Group all of whom have good reason to highlight the potential pitfalls of this particular restriction.  

Together, our customers and members provide or manage millions of privately rented homes throughout the UK. We do so with a great deal of professional pride, making it all the more disappointing that our repeated concerns about the consequences of this Bill are being dismissed as alarmist, or simply self-serving.  

The Renters’ Rights Bill is more than halfway along its passage through Parliament and arguably contains more trapdoors and disincentives for responsible landlords than it did at introduction.

There is still time to give this important piece of legislation the polish that it so desperately needs, but it is looking increasingly unlikely that it will be substantially improved prior to receiving royal assent; which presents landlords, tenants, and our entire industry with serious challenges.  

Campaigning on Renters’ Rights 

My team at the NRLA have, literally and figuratively, worked night and day to pre-empt, analyse, assess, counter and propose changes to the Renters’ Rights Bill since it became clear that its predecessor would not succeed before the General Election.

We get asked frequently why we have focussed on certain parts of the legislation, whilst seemingly accepting other (also undesirable) elements and why we have adopted particular positions, when every fibre in our collective being may be screaming to simply object, object, object.   

The simple answer is that we are not working in isolation, nor can we rely purely on the strength of our arguments.

Every statement we make, or briefing we deliver has to be empirically justified - anecdote or emotion will not cut it when contending with an entrenched and widely supported position.  

It also has to be targeted.  

This Bill wont work, landlords will leave the market without section 21, rents will rise, no-one will invest, may all be true statements. I certainly have sympathy with their sentiment. However, they have no impact on policy makers.  

If we want to achieve change in legislation we need to make an evidence-backed case which is specific i.e. pertaining to a particular part of the Bill or impact on a distinct cohort.

Whatever the proposal when it comes to rental reform, we have to provide either a categoric reason not to proceed, or a viable alternative that meets the same end.

For example, once it became clear that the Conservatives, Liberal Democrats, and Labour parties were all committed to removing section 21 we had to pivot away from campaigning to retain it, and towards trying to replicate its benefits through providing additional grounds for possession and calling for court reforms to speed up section 8 claims.   

It is why, rather than pushing explicitly for a retention of fixed terms - which is incompatible with the structure of the Bill - we campaigned for a minimum period of security before tenants could serve an NTQ and grounds to allow a landlord to sell with vacant possession 

It is the reason that we have lobbied for the Government to recognise the unique status of the student market, and the concessions needed to ensure accommodation is available at the beginning of each academic year.  

We could shout from the sidelines about how much the reforms will hurt landlords, but that will never get us through the door and will deprive members of the opportunity to have their concerns heard. Even when it seems like those concerns are being ignored.  

Where do we go from here? 

The Government has a mandate to deliver Renters’ Reform, and they will. They included a ban on section 21 in their manifesto which will become a reality in a few months’ time. The priority has to be finding ways to mitigate the damage that the provisions in this Bill will do to the PRS. 

We have said from the very beginning of this process that if the Government does not take into account the impact that this, wide-ranging, package of reforms will have on confidence then landlords and tenants will suffer.  

The outcomes will clearly be a reduction in supply, as landlords look to invest elsewhere for more certain returns, an increase in initial rents as landlords price-in the risk of tenant default, longer waits to deal with rent arrears, and higher cost lending.

There will also be a general reduction in accessibility for prospective tenants as landlords’ ability to offset risk is reduced by measures such as indefinite periodic tenancies and restrictions on accepting rent in advance; all of which will hurt landlords’ prospects for making a return, but also tenants’ security, access, and affordability.  

Ministers are yet to listen to these arguments or at least are reluctant to agree with any of our reasoned points.

The opportunities for wholesale amendments are greatly reduced, but as we await second reading and committee stage in the House of Lords we will be pushing for debate on a number of targeted and important areas. 

If we do not see amendments focussed on protecting the student market, preventing abuse of the tribunal system to raise vexatious rent appeals, mitigating the increased risk of rent arrears presented by changes to ground 8, and a clear willingness to engage with the industry about the dire state of the courts system, the disruption and detriment to those living and working in the PRS over the next few months and years will be disastrous. 

In reality this Bill will never be something that the majority of landlords will welcome, but it doesn’t have to be a stick to beat us with either. There is still time for the Government to show us that they understand the business and practical needs of housing providers.  

Politics or policy making is frequently referred to as the ‘art of the possible’. Unfortunately, the economist Kenneth Galbraith probably summed up our current predicament more succinctly when he said: ‘Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable'. 

More information

• You can keep up to date with all the developments of the Renters Rights Bill, by accessing our exclusive member Hub here.  
• Extra dates have been added for our new Renters’ Rights course, after training sessions sold out in record time. For more information and to book click here. 
• Be sure to follow us on social media and sign up for our newsletters for all the latest news and updates on the Bill and its progress