An interesting and instructive response by the Government to a private written question from a labour MP

An interesting and instructive response by the Government to a private written question from a labour MP

The Labour Government seem convinced that the Renters` Rights Act (RRA) provides tangible benefits to small-scale landlords in the private rented sector.

In response to the question submitted by the MP, housing minister Matthew Pennycook said:

“The Renters’ Rights Act will provide tangible benefits for responsible landlords who provide high-quality homes and a good service to their tenants, including simpler regulation and clear and expanded possession grounds, so that landlords can regain their properties quickly when necessary. The government has not introduced any specific measures to support small-scale landlords in the private rented sector.”

Despite Mr Pennycook’s claim that the Act will provide tangible benefits, the government’s own impact assessment estimates landlords will see a gross benefit of just £9 per property per year, while tenants are expected to benefit by £28 per household annually. The government also claims the Renters’ Rights Act will result in only a small number of landlords leaving the sector.

The assessment said: “There is a risk that costs from the legislation may result in some landlords leaving the sector. This is difficult to estimate precisely, though we would expect it to be substantially mitigated by the additional cost per rented property being a very small fraction of average annual rent and asset value.”

However, research by the National Residential Landlords Association (NRLA) reveals, with 41% of landlords saying they plan to sell properties within the next 12 months, compared with just 6% who intend to buy.

When will this government and the tenants stakeholder groups understand that the RRA in many cases will have the very opposite effect of what was intended. Instead of making it easier and safer for the lower paid and unemployed to rent a property; it will make it significantly harder as landlords DO sell excess or unsuitable property (think new tougher acceptable EPC ranges coming in four years). Reducing the supply of property available, will by default cause rents to rise above an affordable level for many, and in particular the poor and vulnerable. With little social housing and a porous safety net what are this group supposed to do – made homeless through no fault of their own by the very Government committed to helping them!