Propertymark has argued that the Renters’ Rights Bill could have severe unintended consequences when it comes to further reducing the supply of property in the private rented sector.

Timothy Douglas, Propertymark’s Head of Policy and Campaigns, highlighted the potential unintended consequences of the Renters’ Rights Bill to a government committee on Tuesday 22 October, which may make the rental landscape worse for renters in the long run rather than improve it.

Propertymark’s latest Housing Insight Report continues to show that demand from tenants outstrips the number of homes available, with an average of 10 new applicants competing for each available property.

Mr Douglas highlighted other issues with the Bill, such as how it fails to meet the ‘huge demand’ for properties, how it could create a ‘one size fits all’ approach towards energy efficiency, and how there would be a ‘further exodus’ of investors without a review of the taxes and costs they must pay.

The Labour Party campaigned during the 2024 General Election to update the regulatory system for the private rental sector.

The Renters’ Rights Bill aims to update the law and provide enhanced safeguards for tenants, such as guarding tenants from unfair ‘no-fault evictions’ with a new framework of potential reasons for repossession.

The Government also wants to implement a higher standard for available rental properties and ensure tenants do not suffer respiratory conditions due to mould and damp by extending Awaab’s Law to all renters.

There will also the introduction of a Decent Homes Standard to the private rental sector which will ensure a baseline standard that must be adhered to by all landlords.

In addition, there is an ambition to make renting easier for those who have children and/or pets, which means landlords will be prohibited from ever discriminating against tenants receiving benefits and/or who may have children.

Propertymark has advised that there are many unintended consequences to the legislation that could make tenants’ circumstances worse. For example, students and other tenants who prefer to stay in a rental property for a specific period via a fixed-term tenancy, something that the UK Government intends to abolish. Propertymark is keen to ensure this option remains so that students have certainty when they start the academic year.

Additionally, the proposed new laws do not prioritise guaranteeing a greater supply of rental homes to help meet ever-growing demand, an aspect that contributes towards escalating rental prices.

Finally, as it stands, you do not need a qualification to become a letting agent in all parts of the UK (except Scotland), so without a full qualification to ensure letting agents are appropriately qualified within the new proposed legislation, a risk remains to consumers regarding the understanding needed by agents to meet all legal obligations.

Nathan Emerson, CEO at Propertymark, said:

“It is important new legislation affecting housing keeps pace with real world demand and can bring higher standards to the rental sector. Within this mix, all updates to the law must be workable and bring fairness to all parties.

“To ensure the planned changes bring a positive impact, it remains important to ensure that all concerns are listened to and acknowledged. Ultimately, the more all views are considered the better the final version of the proposed new law will serve everyone.

“It is crucial to talk about any unintended consequences as the Bill progresses through Parliament, as changes further down the line may be far more difficult to negate.”