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England's renters will soon gain rights, but landlords may exploit weak rules for now

by DD Staff

January 17, 2025

England's renters will soon gain rights, but landlords may exploit weak rules for now

key takeaways

Last month, I assisted a young homeless family on England’s south coast. The local council secured them a privately rented flat at an agreed rate and provided a £1,500 “landlord incentive” payment. However, when the council emailed to confirm the arrangements, the landlord responded by increasing the rent by £100 a month, citing “market trends” as the reason.

The property was mortgage-free, so rising costs were not a factor. This scenario is not unusual; Zoopla reports that 70% of landlords have little to no mortgage debt. Additionally, there was no supply shortage, as council data showed that over 8% of homes in the area were vacant. The flat’s condition and location remained unchanged. The rent hike occurred simply because the landlord could raise it without restriction.

This implies that two children are now living in poverty for an additional £100 a month, completely unnecessary. Additionally, it implies that the flat will now be worth more if it is sold to a different landlord, or (concurrently) more costly for first-time purchasers who must contend with them. The family would most likely be priced out of their new home if the landlord raised the rent again the following year (according to the market's natural trend). The cycle of homelessness and rent-hiking will start all over again.

Unless, of course, the government’s renters’ rights bill manages to break the cycle. The bill goes some way towards rebalancing landlord-tenant relations, bringing them closer to international and historical norms. Most importantly, it proposes to ban “no-fault” evictions and abolish England’s notoriously insecure tenancies.

Important and necessary as the proposed reforms are, the new measures do nothing to tackle the cost of renting. The Westminster government (unlike its counterparts in Scotland, Sweden, Germany and many other places) believes that rents should continue to be set by the “open market”, despite its mysterious tendency to self-inflate. If we want rents to fall, experience shows that regulation is the only realistic option.

That is not to say that the government’s reforms are completely hollow. As well as the direct benefits of secure renting (imagine knowing that your children can finish their schooling without the constant worry of 12-month rental contracts), the quality of rented homes is likely to improve over time. The precarious nature of the current system has created a terrible imbalance in bargaining positions, which deters renters from enforcing their rights. In the social sector, by contrast, tenants are much more confident about demanding repairs – and the government is proposing to replicate the same sort of security for private tenants. Social tenants routinely take their landlords to court, force them to carry out works, and win significant compensation – in some cases up to 100% of the rent. Rigorous repairing deadlines will be introduced where a home is unfit for human habitation.

Under the proposed system, private landlords would have to accept that this was the cost of doing business. Repairs and compensation can be expensive, and many would find this a stark contrast to the “passive income” attitude that has characterised the housing system over the past few decades.

The bill would also formally ban landlords from discriminating against benefits claimants and households with children. There is a proposal aimed at preventing lettings agents from starting “bidding wars”, and a prohibition on demanding large upfront rent payments. Landlords will not be allowed to unreasonably refuse permission to keep a pet. In many parts of the world these measures are seen as basic, but in England they are revolutionary.

Landlords, of course, are furious. They successfully derailed the previous government’s attempt to implement the same changes, eventually winning a four-year war of attrition when the Conservatives failed to pass their proposals before the election. There is a sense of panic now that Labour’s bill looks likely to pass. Rent increases once again broke records in 2024, no-fault evictions are at an eight-year high, and landlords are somehow convinced that tenants are the villains.

The current concern is that landlords will capitalise on the last remaining no-fault evictions, and re-let at the highest possible price before the new scheme comes into effect. The government expects the changes to be implemented by the summer of 2025, and campaigners are worried that the next six months will see mass evictions and last-minute rent gouging.

Landlords, we are often told, are mostly decent people. There is a small number of rogues, but the vast majority are conscientious and fair. We do not yet know how they will behave while the rental reforms are being finalised, but if the campaigners’ fears are correct – if landlords do take advantage of the last easy evictions, and wreak havoc on people’s lives over the next few months – their argument will never hold water again.