Labour’s Rental Reform Agenda – getting it right

Writing in Landlord Today, Richard Rowntree, Managing Director of Mortgages at Paragon Bank calls for the new Government not to rush new legislation., stating that Labour’s approach to rental reform will be crucial in balancing the needs of both tenants and landlords, fostering a stable and thriving private rented sector (PRS).

Key Considerations for the Renters Reform Bill

  1. Section 21 and Court Capacity:
    • Labour previously opposed the Tory Bill’s clause to only scrap Section 21 once court capacity increased. While many landlords have accepted the end of Section 21, Labour must ensure robust grounds for landlords to repossess properties and guarantee a well-resourced justice system to handle the anticipated increase in court cases. Rushing this without proper planning could harm both landlords and tenants.
  2. Balancing Needs:
    • The Bill needs to provide clarity and certainty to landlords, encouraging continued investment in the PRS. A well-balanced Bill will support Labour’s broader economic goals by maintaining a flexible and fluid workforce, essential for economic growth.
  3. Avoiding a Clogged Court System:
    • If Labour gets the Bill wrong, it could lead to a clogged court system and financial losses for landlords needing to evict tenants. This would damage confidence in the PRS and potentially reduce the availability of rental stock, exacerbating current issues in the rental market.

Current Market Dynamics

  • Tenant Demand and Rental Stock:
    • Zoopla’s rental market report highlights that tenant demand has doubled since the pandemic, while rental stock availability has decreased by a third, leading to rental inflation. Boosting supply is critical to improving renter choice and influencing landlord decisions positively.

Attracting and Retaining Landlords

  • Investment Certainty:
    • It’s crucial to retain existing landlords and attract new ones by ensuring the regulatory environment is stable and supportive. Recent data shows a trend of younger landlords entering the market, with the average age of buy-to-let landlords dropping and a significant portion of purchases made by those under 50. This indicates property remains an attractive investment, but investors need certainty.

Strategic Approach for Labour

  1. Consultation and Planning:
    • Labour must not rush the Renters Reform Bill. A careful, consultative approach will help craft legislation that meets the needs of all stakeholders in the PRS.
  2. Robust Grounds for Possession:
    • The Bill should establish clear and fair grounds for possession to protect landlords’ rights while ensuring tenants have security and protection.
  3. Investment in the Justice System:
    • Increased investment in the court system is essential to handle the rise in cases and ensure swift and fair resolutions.
  4. Encouraging Supply:
    • Policies should aim to increase the supply of rental homes to meet growing demand, thereby stabilizing rental prices and improving the quality of rented homes.

By getting the Renters Reform Bill right, Labour can foster a healthy and sustainable rental market that supports both economic growth and the housing needs of the population. This will require balancing the interests of tenants and landlords, ensuring legal and financial stability, and promoting investment in the rental sector

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