Government denies Renters’ Rights Bill will harm rental market

Housing Minister again denies the Renters’ Rights Bill will have a “destabilising effect on the rental market”.

In response to a written question, by the Shadow Housing Secretary, Kevin Hollinrake, on the impact of the Renters’ Rights Bill on the Build-to-Rent sector (BTR), Matthew Pennycook claims the bill will NOT have a bad effect on the rental market or BTR sector.

Despite, Mr Pennycook’s assumptions, many private landlords are worried about the harm the bill will do to the sector.

Do not expect the bill to have a destabilising effect

Mr Hollinrake asked the Department for Housing, Communities and Local Government: “What assessment has the government made of the potential impact of the Renters’ Rights Bill on the (a) popularity and (b) take-up of Build to Rent new build.”

In response, Mr Pennycook claims the government has engaged with landlords and property investors and will not undermine confidence in the market.

He said: “My Department has engaged with a range of organisations, including Build to Rent operators, to understand their interests in the development of the Renters’ Rights Bill.

“We do not expect the bill to have a destabilising effect on the rental market or the Build to Rent sector.

“We will continue to work with good landlords and their representative associations to ensure a smooth transition to the new tenancy system.”

Rules don’t apply

Mr Pennycook’s claim that the bill will not affect the Build to Rent sector, may be correct, as many of the new rules appear not to apply to it.

As previously reported by Property118, in what many see as an unfair loophole, purpose-built student accommodation (PBSA) providers will be exempt from the Decent Homes Standard, while smaller landlords will still have to comply with the new rules.

At the same time, many smaller landlords are leaving the market in an ongoing exodus, while large corporate landlords are taking over, often with higher rents.

For example, one Build to Rent developer in London is charging £2,600 per month for a one-bedroom flat, and £4,600 for a three-bedroom.

Despite Mr Pennycook’s assurances, it appears that the bill may still have destabilising consequences for the private rented sector as many smaller landlords continue to sell.