Government admits no impact assessment of Renters’ Rights Act on supply

The government admits it has not carried out an impact assessment on how the abolition of fixed-term tenancies will affect rental supply.

In a written question, Liberal Democrat MP Dr Roz Savage asked what assessment had been made of removing fixed-term tenancies under the Renters’ Rights Act, including the impact on certainty for landlords seeking to sell or recover possession and the potential effect on rental supply.

However, Housing Minister Matthew Pennycook claimed no such assessment has been carried out.

Abolition of fixed-term tenancies will cause chaos

Mr Pennycook pointed to the Renters’ Rights Act impact assessment, which claims the abolition of fixed-term tenancies and replacing them with periodic tenancies will “result in fewer voluntary household moves as tenants will no longer need to plan to move at the end of a fixed term period.”

The assessment looks at the English Housing Survey, which says approximately 6.3% of tenants who moved in the previous 12 months listed the end of the fixed term as the sole reason for moving.

The assessment claims: “These are voluntary moves from tenants that are solely due to the existence of fixed terms, this may be in situations where tenants are unable to commit to another term of at least 12 months.”

However, as previously reported by Property118, many industry experts have warned the abolition of fixed-term tenancies will cause chaos, particularly for the student rental market.

ARLA Propertymark regional executive for Cornwall, Sophie Lang, told Property118: “The student rental market runs in a very set cycle. We know when the term times are and when the year ends. It was very easy to have a fixed-term tenancy, which gave everyone peace of mind that they had their housing sorted.

“Removing fixed-term tenancies will cause uncertainty for landlords and tenants because it means that fixed-term tenancies are no longer there as a protection.”

A survey by agency software firm Alto reveals more than a third (34%) of agents predict the end of fixed-term contracts could devastate the student letting system.

Landlords selling

Dr Savage also asked whether the Renters’ Rights Act could affect the frequency of tenant displacement caused by landlords selling properties, and trends in repeated forced moves for compliant tenants.

Mr Pennycook again confirmed that no assessment had been carried out on this.

The Renters’ Rights Act impact assessment claims the reforms are expected to result in only a small number of landlords exiting the market.

The assessment said: “There is a risk that costs from the legislation may result in some landlords leaving the sector. This is difficult to estimate precisely, though we would expect it to be substantially mitigated by the additional cost per rented property being a very small fraction of average annual rent and asset value.

“The available evidence to date does not suggest that similar reforms to abolish section 21 in Scotland have negatively impacted supply, nor changes introduced by the 2019 Tenant Fees Act, despite concerns they would.”

However, a study by the Scottish Association of Landlords shows a reduction of 22,000 rental properties in Scotland in just one year due to government policies and anti-landlord rhetoric.

A survey by the National Residential Landlords Association (NRLA) found that 41% of landlords plan to sell properties within the next 12 months, compared to only 6% who intend to buy.