Angela Rayner’s Renters’ Rights Bill is likely to drive up rents despite being intended to make life easier for tenants in the private sector, the Government has admitted.
The flagship Bill, now making its way through the House of Commons, will ban no-fault evictions and rent rises considered to be unreasonable, as well as introducing more regulation.
But an impact assessment of the policy released this week revealed that it will probably add to financial pressures on tenants, according to the Government’s own analysis.
The impact assessment, conducted by Ms Rayner’s Ministry of Housing, Communities and Local Government, said: “It is likely that landlords will pass through some costs of new policies to tenants in the form of higher rents – to offset those costs and maintain a degree of profit.
“Landlords will likely offset some of the costs of the regulation through rental price growth.”
The Bill, if it becomes law, will abolish “no fault” section 21 evictions and so-called “backdoor evictions” in which tenants are forced out by large rent increases. It will also introduce an ombudsman for the private rented sector and set up a government database of landlords.
It will also allow tenants to remain in place for longer despite being in arrears. Under current rules, a landlord can begin the process of repossession if their tenant misses two months of rent. Labour’s plans would extend that to three months.
Other measures include higher housing standards intended to improve the quality of private rental dwellings and a ban on discrimination against tenants who have children and pets, or who are in receipt of welfare benefits.
The Government projects the average extra cost of the bill’s measures to landlords will be £22 per year per property, or 0.2 per cent of annual average rents. These costs, it predicts, will be passed on to tenants. “This is unlikely to have a substantial impact on the supply of privately rented properties,” the assessment said.
The National Landlord Association has warned of cost increases of up to 10 per cent because of the Bill.
The assessment also admits: “There is a risk that costs from the legislation may result in some landlords leaving the sector.”
A Ministry of Housing, Communities and Local Government spokesman said: “The evidence shows that landlords value good tenants – and are therefore less likely to raise rents for sitting tenants.
“Landlords will also only be able to raise the rent once a year using the existing section 13 process and our reforms will empower tenants to challenge an unfair rent increase at the first-tier tribunal.”
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