Renters’ Rights Bill sparks rent arrears fear

There will be another rise in tenant rent arrears due to the Renters’ Reform Bill after a jump in numbers over the past year, FCC Paragon says.

The tenant referencing firm’s analysis reveals an estimated 235,837 PRS households in England struggled with rent payments during 2023/24, that’s a 3.2% rise from the previous year.

The English Housing Survey indicates 5.3% of England’s renters are currently, or have been, behind on rent, peaking at 9.3% in Yorkshire and the Humber.

London holds the highest volume of affected properties, representing a quarter of all arrears cases.

PRS is facing ‘serious consequences’

The firm’s managing director, Bekki Leaves, said: “Whilst the Renters’ Rights Bill may have been designed with the best intentions, the rental sector is facing some very serious consequences, and we anticipate a continued spike in rental arrears to be one of them.

“The move to periodic tenancies, the abolition of Section 21 and preventing tenants from offering more cash upfront to offset income concerns will all contribute to an increased level of vulnerability on the side of landlords.”

She says that comprehensive tenant referencing is now crucial – and this can’t be done by digital referencing platforms.

Ms Leaves adds: “The risk is too great and requires the expertise of experienced and dedicated staff members to leave no stone unturned.”

Risk of rising rent arrears

FCC Paragon says that while the Renters’ Rights Bill will strengthen tenant rights, there is a real risk of rising rent arrears in the PRS.

This concern stems from the predicted burden on the court system following the abolition of Section 21 ‘no-fault’ evictions.

The firm says that reduced landlord protections on unpaid rent, coupled with an already strained court system, make thorough tenant vetting a critical undertaking.