IMLA warns that more PRS regulation will bring rent hikes

The Intermediary Mortgage Lenders Association (IMLA) has issued a stark warning that increased government regulation on the private rented sector (PRS) could lead to significant rent hikes.

In its latest report, ‘Vital role of the Private Rented Sector’, IMLA highlights the importance of the PRS, which currently houses 20% of UK households.

The report expresses concern over the potential impact of the Renter’s Rights Bill and stricter energy performance standards on landlords.

UK’s private landlords

The organisation’s executive director, Kate Davies, said: “The government’s long-term plan to massively boost much-needed social rented accommodation is very much welcomed, but cannot come at the expense of the UK’s private landlords, who currently play a vital role in providing homes for 20% of the country’s households.

“IMLA is reiterating a call we have been making for some time, for policymakers to take action to ensure those landlords feel confident enough to remain in the sector and continue to offer this essential housing for the country’s renting population.”

She adds: “Continuing to heap expensive regulation on the sector risks pushing out more of the smaller landlords who make up the lion’s share of providers, creating a vicious circle of fewer rental properties available and higher rents for tenants.”

Improve outcomes for tenants

IMLA is proposing six key recommendations for the government to ensure a more balanced policy framework – and improve outcomes for tenants:

• Recognise the PRS’s significance: The PRS is a crucial housing provider for millions of Britons
• Acknowledge the role of small landlords: Many landlords own just one or two properties and form the backbone of the sector
• Understand the cost implications of regulation: Increased regulation will inevitably lead to higher costs for landlords, who may pass these on to tenants
• Consider the impact on investor confidence: Excessive regulation could deter new investment and force some landlords to exit the market
• Trust market forces to drive up standards: Tenant choice and market competition can improve housing quality
• Apply policies fairly across tenures: Discriminatory policies, such as stricter energy efficiency standards for PRS properties, could reduce supply and drive up rents.