Rental reform bill misses the point as tenants’ misery continues

There was more fluff attached to the publication of the Renters (Reform) Bill than the floor of a poodle parlour, with much of the attention focused on the end of pet bans.

Pet policies are the smallest of small potatoes when one considers the scale of the challenge faced by anyone trying to navigate Britain’s dysfunctional private rental housing market.

You can start with the cost. Zoopla reports rents hitting 10-year highs with the average cost reaching £1,120 a month in February 2023 – up from £1,010 a year ago. The situation is worse still for tenants in London, where the average new let costs close to £2,000. The Evening Standard recently described the capital’s market as “frenzied” and I don’t think that is an exaggeration.

While Zoopla forecasts that rental inflation will slow to perhaps 4-5 per cent later this year, you can still file the cost under the heading “ruinous”. Factor in the soaring price of food and energy and the outlook is nothing short of miserable.

The problem has partly been fuelled by landlords’ costs but partly also by a lack of supply. Last year the Property Reporter said Britain’s rental stock had declined by 40,000 in just three years. Property adviser Cornerstone Tax in February said landlords sold 35,000 more properties than they bought throughout 2022.

Will the rental reform bill exacerbate those trends? Groups representing landlords say it may well do that.

On the other hand, reform is overdue. Tenants in Britain have few rights. If their landlord fancies selling up, they can be told to leave in short order, leaving them at the mercy of that frenzied market.

The bill will do away with no-fault evictions and end the practice of discriminating against tenants claiming benefits or families, who face particular challenges in a market that is not at all well designed for them at a time when the waiting lists for social housing are endless.

A sop has been offered to landlords, who will find it easier to repossess properties from anti-social tenants. A new ombudsman, to settle disputes and relieve pressure on the court system, will have to prove itself. But that is an idea with potential.

The biggest complaint tabled by the National Residential Landlord’s Association is that the bill “lacks detail”.

On the other hand, renters may still feel they’ve been given the short end of the stick, even if the bill means they can keep a poodle around if they like. But if it does serve to further reduce supply, and rental inflation remains at high levels, they may not be able to afford to feed or house either their pets or themselves.

The Institute of Economic Affairs – the free market think tank favoured by Liz Truss – railing against “anti-landlord” measures in the bill would suggest the truth lies in the other direction.

Tenants deserve better. The emergence of a more professional landlord sector, committed to holding rental properties over the long term, would be a welcome development. Efforts should be made to achieve that.

But the IEA is quite right to argue that the housing crisis “won’t be solved by fiddling with rental rules”.

“Britain needs fundamental planning reform to allow more homes to be built where people want to live – anything else will continue to see renters offered poorer quality homes at too high prices,” it says.

The problem is that nimbys are currently in the ascendancy in government. They have too much influence over policy and too much attention is paid to them. Successful reform of the rental market, successful reform of the housing market as a whole, won’t happen until that is addressed. Sadly, there is precious little sign of that happening.