Don’t listen to landlords – stronger protections for renters could be a catalyst for housing market reform
Government has finally – after many delays since it was first announced in 2019 – today introduced a bill which will pass much needed regulation for the private rented sector.
This is vitally important reform that will end no-fault evictions and increase the quality of rented homes.
Landlords currently have the power to evict tenants without giving a reason, leaving them with just two months to find a new home. This means renters face near constant insecurity, impacting their ability to plan for the future, put down roots, and feel at home.
For those with the least power in the rental market, the consequences of having to move suddenly and at short notice can be devastating. No-fault evictions are the leading reason that households are accepted by councils as homeless due to the end of a private tenancy.
While more landlords might be selling, others are still entering the market and expanding their portfolios
But not all are pleased to see these reforms announced.
According to a vocal landlord lobby, we're seeing the slow death of buy-to-let. The promise of better protections for renters, as well as tax changes made in 2016 by George Osborne that hit their profit margins, are combining to drive them out of the market in droves. This has also been blamed as the cause of recent, above-inflation increases to rents.
This is a compelling narrative. No one would want well-meaning regulation to create additional and unintentional pressures on those it is designed to protect.
It is good then, that this argument does not stand up to reasonable scrutiny.
Data from UK Finance shows that the number of outstanding buy-to-let mortgages reached two million at the end of 2022, a new record high and up 20,000 on the previous year. This shows that while more landlords might be selling, others are still entering the market and expanding their portfolios. We also know that the stamp duty holiday introduced during the pandemic to keep the housing market moving led to a surge in investment from landlords.
So, far from seeing the existential decline of the private rented sector, it has in fact been pretty buoyant.
But what if, in response to this new legislation, landlords do sell up? Well, we shouldn’t worry about that too much either.
Landlords do not in the main increase the number of homes we have as a country. Nor when they sell, do the homes they owned disappear. When they sell a home, this gives an opportunity for someone else to own it.
In fact, at the point that the private rented sector showed a slight contraction after 2016, from which it has since recovered, rates of homeownership increased.
Government should look to capitalise on this, putting in place support so that if landlords do sell their homes, first-time buyers, local authorities and housing associations are able to buy up those homes. This would create more owners and a greater supply of genuinely affordable, well-managed homes to rent. And of course, they should look to expand the supply of homes in general.
In any case, seeking to frustrate progress towards a better regulated rented sector by presenting it as in tenants' own interests is like burning the town to save it. The answer to the problems tenants face isn't to provide more insecure, poor-quality homes. But this is exactly what those who don't want greater protections for renters want.
The argument for reform has won out in government for now, and they seem to be staying the course in response to this pressure from the landlord lobby. They must continue to hold firm as the legislation makes its way through the House.
Darren Baxter-Clow, senior policy adviser at Joseph Rowntree Foundation
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