The Renters’ Rights Bill is looking to introduce ren caps as a measurement to protect renters, however not many landlords are on board with this idea.
37% of landlords told the Landbay survey that they would halt investment in properties if a rent cap was put in place.
Property 118 says, “While the Bill is aimed at boosting tenant protections, issues such as mandatory two-month notice periods for rent rises have raised fears among some landlords.”
Private Rented Sector
Landlords have already started to exit the industry which is causing a shortage of properties in the PRS.
Landbay’s survey also revealed that 16% of landlords plan to sell their entire rental portfolios. Property 118 says this has the potential to remove 750,000 properties from England’s PRS if the Renters’ Rights Bill is passed.
Concerns
There are concerns that rent caps haven’t worked in other areas of the world in the past.
Rent caps have proven to cause issues like black markets with illegal sublets, controls have also reduced housing supplies and dropped tenant turnovers are expected.
Landlords are seen to be more likely to favour long-term tenants rather than new tenants or those searching for rental spaces, due to the fact that tenant turnovers will drop.
Property 118 also says, “12% of landlords admitted they might evade regulations to maintain market-level rents.”
Positives for landlords
Existing tenants will not want to move elsewhere if rent is capped which could be a good thing for landlords as they will have more stability through long-term tenants. However, this could make it harder for newcomers and young renters or students to find homes.
Positives for renters
Rent prices will be more controlled with caps in place, no last-minute changes to rent prices will be allowed to be made if this Bill is passed. This means more protection and allows student renters to plan and organise as they will know how much their rental will cost in advance.
Students remain unaware
Many students have admitted they are unaware of how the Renters’ Rights Bill might affect them and while the provisions have not yet been put in place due to the bill not being passed yet – young people are still proving to lack rental and financial literacy.
There are many benefits for students (including locked rent prices) if the RRB is approved but they may not be able to use them to their advantage if they remain unaware.
