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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is head of research at Hamptons International
The passing of the Renters’ Rights Act last week represents the most significant shake-up of the English property market in decades. But while the headlines are bold, the reality for most landlords is more muted. Day-to-day, their relationship with their tenants won’t differ — unless, of course, they disagree.
At its core, the Act aims to rebalance the relationship between landlords and tenants. Key measures include abolishing “no-fault” evictions, banning rent bidding wars, prohibiting upfront rent payments or excessively long contracts and introducing a new system for challenging rent increases. These are well-intentioned reforms, designed to make renting fairer and more accessible.
But in a market already grappling with chronic undersupply, it’s hard to ignore the unintended consequences. Landlords may become more selective, favouring tenants with conventional incomes and spotless references. For those without a 9-to-5 job or a squeaky-clean credit history, finding a home to rent could start to feel like searching for a needle in a haystack.
Still, it’s not the headline reforms that will determine the Act’s success — it’s the machinery behind them. After nearly five years in the making, landlords are probably as on board with the new rules as they ever will be. The real test now lies in how well the system will function.
Take the new tribunal process for rent disputes. Tenants will be able to challenge even mutually agreed rents for up to six months after moving in, without much risk of backdated payments if they lose. They’ll also be able to challenge proposed rent increases throughout the tenancy, as long as it’s within two months of the landlord requesting a rise. That’s a strong incentive to raise a dispute — and with only 34 judges currently overseeing rental tribunals across 4.7mn private tenancies, the risk of gridlock is real. Without significant investment in capacity, the system could quickly become overwhelmed.
Possession proceedings face similar pressures. While Section 21 notices are being scrapped, the Act expands the grounds on which landlords can reclaim their properties. But most of these are discretionary and require a court hearing. With the average possession case already taking 34 weeks, any further delays could erode landlord confidence in a legal system already under strain.
Some measures, meanwhile, feel more like sticking plasters than solutions. The “ban” on above-asking-price bidding is a case in point. While it aims to protect tenants from being priced out, it may simply encourage landlords to list properties at higher rents from the outset. We risk creating a two-tier rental market: one where existing tenants enjoy greater protections, while would-be renters struggle to access homes in the first place.
In truth, many of these reforms were inevitable. It’s been at least a decade since renting was mostly the preserve of students and twenty-somethings. Today’s tenants are older, more settled and value stability — something many landlords want too. In that sense, the Act is less a revolution and more a case of legislation catching up with reality. But while the reforms were designed, in part, to weed out the worst landlords in the sector, their reach extends far wider. The risk now is that well-intentioned landlords — the majority — find themselves caught in the crossfire, facing more red tape and uncertainty, despite doing the right thing.
Will the Renters’ Rights Act work perfectly from day one? Almost certainly not. But if the government is serious about making it work, it must ensure the infrastructure is in place to support it.
For most landlords, the fundamentals remain unchanged. But for those navigating disputes or seeking possession, the road ahead may be bumpier. The key now is to flatten those bumps — before they become roadblocks.