Renters’ Rights Bill could have had an unwanted side effect on tenants due to rent hikes

Only 2.5 million tenants have had rent increases.

How many people in the UK have had council tax increases?

4% sounds pretty much like keeping up with cost increases not an excess

The proposed Renters Reform Bill increases a landlords risk and also bans a landlord from taking an offer above the advertised rent. So this means that if the current proposals go through landlords and their agents will be incentivised to advertise all rental properties at the highest possible rent rather than hold rents down a bit to encourage long-term tenancies.

Inevitably, if it goes ahead in its present form, this will push rents up.

Rachel Reeves has also just brought in Torsten Bell to help her with her budget. Torsten Bell has previously proposed that landlords should have to pay national insurance on rental income:

https://www.thisismoney.co.uk/money/tax/article-15035203/Rachel-Reeves-confirms-MP-Torsten-Bell-help-Budget-prep-heres-seven-tax-ideas-hes-past.html

The ‘justification’ for this proposal was ‘so that landlords pay the same tax on rental income as tenants pay on their earnings….[and he suggested] landlords pay 20 per cent National Insurance for basic-rate taxpayers and 8 per cent for those with higher incomes.’

Landlords who are not running their properties in a limited company structure are already penalised by the tax system because they cannot offset their finance costs against their rents. A person running a self-employed business, a partnership, or a limited company can all offset their finance costs against their business expenses.

The problem with this kind of nonsense is that nobody can plan because you don’t have the detail: 20% national insurance on what? On your net rental income after finance costs? After your gross rental income? When you already can’t offset your finance costs against rents? When your finance costs may already exceed your net rental income and may already be making a loss? When if you have a bad tenant it may take you years to get your property back through the courts? The government has already refused to publish the justice impact test of the RRB earlier this year.

https://www.property118.com/government-refuses-to-reveal-renters-rights-bill-court-impact-assessment/

All that you know as a landlord is that your costs and risks are escalating well above risks you faced a decade ago and everything on the horizon says more of the same. If not worse.

And because the renters reform bill proposes limits on rent increases the only possible curse of action a landlord has, if not exiting or already running an incorporated business, is to raise rents.

So 4.7% looks pretty conservative to me if a reactionary left-wing agitator gets his teeth into the outcome of the renters reform bill. Landlords are already penalised when compared to the self-employed, partnerships and limited companies.

No poop Watson!

Indeed Sherlock.

There’s nothing anywhere that I can see labour doing that is making the world a better or sustainable place. The people set to benefit from the Renters Reform Bill are agents, not tenants, and it’s no surprise that agents are advising landlords to raise rents in advance of the Bill. ‘Do it while you can because you wont’ be able to later’.

Coincidentally this morning I received and filled in a survey form from a market research agency claiming to be acting for the department for net zero. Overall I felt it was biased because it didn’t ask about the effect of biodiversity and soil health on absorbing excess CO2. It also focused mostly on technology and entirely ignored the economics of converting properties to renewables.

The survey didn’t ask about reasons why we aren’t adopting the new technologies. For most of us it’s tax….the tax system penalises us for investing in energy efficiency/security measures. So mostly, we don’t do it either in our rental properties or in our principle private residence….’net-zero’ is for rich people…not for the majority of landlords or owner-occupiers. And that’s why the net-zero minister and net-zero ministry are going to have a net-zero effect on climate change and energy security.

The EPC system has long been the government’s flagship energy efficiency programme although it doesn’t do anything to encourage the uptake of renewables. There seem to be government people that believe in using the EPC system as a stick to beat us with because they apparently want to ban us from renting out properties at band D or below. But if government believes in it, and if we can offset our finance costs for a commercial property, why can’t we at least offset our finance costs for a residential property at EPC band C or above?

And where are the capital allowances making it viable for us to invest in energy security?

The Renters Reform Bill is all stick and no carrots, apart from the few carrots that will be eaten by agents as they cash in on the higher rents and extra fees levied to help landlords comply with unnecessary demands that were not a requirement a decade ago when most tenants still had safe, comfortable homes. The people being hit by Torsten Bell’s stick when Rachel opens the door to her panic budget in Autumn 2025 will be tenants as landlords raise rents even further to recover their tax costs and all those extra fees.

4% is just inflation. Wait until the full effects of pushing small landlords out becomes apparent.
When the PRS has collapsed, BTR not materialised, council building not materialised and there are twenty people waiting for every rental then see what the ‘market’ prices are.

Reply to the comment left by Jack Jennings at 27/08/2025 – 13:59
It’s already happening, I am constantly approached by desperate tenants, but I have no vacancies, the end result will be horrific for tenants.

Reply to the comment left by Jack Jennings at 27/08/2025 – 13:59
The effects of stopping small landlords from offsetting their interest payments against rents are perverse. Especially with rising interest rates the consequences of the additional tax charges and the effect of any proposed additional taxes such as NI on rental income are that the only thing non-incorporated landlords (including many labour MPs) can do to avoid a cash loss is raise rent.

I don’t think that this will result in collapse in the BTL sector so much as an increased trend towards holding property in limited company structures, something that is already apparent. But the effect of the Renters Reform Bill will be to reduce competition and choice, including choice provided by small portfolio landlords.

This policy is not only perverse in that it distorts the market it is also regressive: This is because government interference in the market raises rents and the raised rents which are in part additional taxes are levied upon tenants.

Reply to the comment left by TheMaluka at 27/08/2025 – 14:04
It is indeed already happening.

I use an agent. Less than ten years ago the agent I was using advised me to hold rents down a bit to encourage long-term tenancies. Because of government policy agents now advise me to maximise rent. The last time I let one of my properties I had three agents who wanted to let it, but I used two. Both of these agents had queues of tenants on their books and yes, some of these tenants were desperate.

If the Renters Reform Bill goes ahead, possibly with the prospect of extra taxes such as NI on rental income, then faced with three agents telling me what ‘market rent’ is I will be choosing the agent who quotes the highest ‘market rent’ figures.

Government policy in this area is both perverse and regressive. High rents are in large part a consequence of government interference in the market. The more the Torsten Bells of this government slide in via the back door of number 11 Downing Street the more tenants pay to fund their belief system.

Reply to the comment left by TheMaluka at 27/08/2025 – 14:04
conversely I have a couple of properties free and also getting inundated but rejecting more than ever as a direct result of the new rights tenants will be very shortly granted….

If I am to be indefinitely stuck with a tenant it seems, then its going to the best possible candidate with the lowest rental risk I am going to pick – the one with most to loose if they start playing silly buggers and withholding rent/cause damage/merry hell etc.