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Renters’ Rights Act is a step forward but rent controls are needed claims Guardian

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Renters’ Rights Act is a step forward but rent controls are needed claims Guardian

An editorial opinion piece in the Guardian claims the Renters’ Rights Act is a “welcome step forward for the private rented sector, but there’s a long way to go”.

The article claims “the rush by landlords to evict people and boost their incomes” shows why change was needed.

However, as previously reported by Property118, industry experts have warned the Act could do more harm than good.

Landlords to pre-emptively evict tenants

The opinion piece claims: “The introduction of the Renters’ Rights Act is important. Until last week, landlords could evict a tenant for requesting a reasonable repair, or challenging a rent hike.

“A poll in 2023 for the charity Shelter found that tenants who complained to their landlord or local authority were 159% more likely to be served a no-fault eviction notice than those who did not.

“The fear was that complaints could cost tenants their homes. It was customary for landlords to pre-emptively evict tenants if they wanted to raise rents.”

However, as previously reported by Property118, despite what Shelter and tenant activist groups say, only a small minority (4%) of renters are evicted or asked to leave by their landlord.

The English Housing Survey Private Rented Sector report for 2021-2022 reveals the majority of renters (77%) ended their last tenancy because they wanted to move NOT because of eviction.

Introduce rent controls

The opinion piece also urges the government to introduce rent controls.

The article states: “The success of the act depends on long-term funding for councils to properly enforce the rules. Polling is clear: voters across the political spectrum, from Labour to Reform UK, support rent caps in some form. But ministers said no.

“They also could have protected renters from the rush of section 21 evictions that ensued ahead of the act’s implementation, which were predicted by campaign groups. Shelter, for example, warned that the decision not to immediately abolish no-fault evictions wrongly prioritised landlords, even though they were less likely to suffer hardship than tenants.

“The rush by landlords to evict people, and boost their incomes in advance of last week’s deadline, perfectly exemplifies why change was imperative.”

However, as previously reported by Property118, rent controls do more harm than good and actually do far more damage than benefit tenants.

According to the Institute of Economic Affairs (IEA), while rent controls may initially lower rents for existing tenants, they typically lead to higher rents in uncontrolled sectors and reduce housing supply and quality.

Even in Scotland, the rent cap has been blamed for soaring rents, which have increased by 11.6%.

Data by Hamptons reveals Scottish landlords are increasing rents at a faster pace than anywhere else in Great Britain because of rent controls reshaping the market.

Lead analyst at Hamptons, David Fell, said: “The evidence from Scotland suggests that rent controls rarely work as intended.

“At best, they delay rent increases; at worst, they set a new benchmark where landlords feel compelled to increase their rents every year by the maximum allowed.

“Faced with uncertainty over future rules, many landlords choose to raise rents little and often rather than risk falling far below market levels.”

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