The meteorite about to hit the private rental sector - credit Landlord Today publication

The film ‘Don’t Look Up’ chronicles the frustration of two scientists who agonise as political leaders ignore the perils of a meteorite hurtling towards earth until it is too late. 

While the Renters’ Rights Bill (RRB) doesn’t quite represent the same existential global extinction threat, the feeling of Government not recognising the warning signs of a looming crisis is unfortunately very similar. 

Let’s make this abundantly clear – the RRB will lead to an increase in homelessness and will come at a cost to those it is designed to protect, tenants. 

The warning lights are already flashing red and the Bill isn’t even on the statute books yet. 

A report by the London School of Economics, commissioned by Crisis, found that councils in England spent £732 million on temporary accommodation for homeless families in the year to April 2024, an 80% increase on the previous year. 

The Ministry of Justice, meanwhile, reported that Section 21 notices hit an eight-year high last year as landlords looked to regain control of properties ahead of the RRB coming into effect. 

Crisis Director of Policy Francesca Albanese said local councils were at ‘breaking point’, highlighting the lack of social housing and rising rents pricing some of the lower income families out of the private rented sector (PRS). 

Well, we haven’t seen anything yet. 

The RRB will invariably lead to landlords being more selective over prospective tenants, as well as increasing rentsto counter some of the increased costs associated with the RRB, pricing more people out of the tenure. 

Faced with a potentially longer court process under the new regime, they can hardly be blamed for doing so. 

Add in measures such as a limit on rent in advance, regularly used by households with a poor or no credit history, and it is going to be increasingly challenging for those on lower incomes to access privately rented homes. 

In its response to the LSE report, the Ministry of Housing, Communities and Local Government blamed an inherited homelessness crisis from the previous Government and cited the removal of Section 21 ‘no fault’ evictions to alleviate the issue. 

Again, let’s be clear, abolishing Section 21 will not stop landlords from evicting tenants, and neither should it. The underlying reasons for evicting tenants do not change with the RRB; rent arrears, anti-social behaviour and a desire or need to sell a property will all still exist. It simply changes the method landlords use to Section 8.

There is also a feeling from Government that they don’t believe the threats that landlords will leave the sector. Whilst we don’t agree with the notion of a mass exodus, the RRB,combined with new energy efficiency standards, will no doubt mean that for some smaller landlords, enough is enough. 

However, whether or not landlords sell up misses the point. PRS stock has remained stagnant for nearly a decade, a period that has seen coincided with soaring tenant demand, particularly in the post lockdown period. 

Tenants are staying in homes for a longer period, resulting inless churn and, subsequently, fewer rental properties to choose from. This supply demand imbalance has driven rental inflation and we need new rental homes of all varieties, including from private landlords and build-to-rent. 

If the Government’s own forecasts of an additional five million people in the country by 2032 are anywhere near accurate, we are facing a major housing problem. This increase will be driven exclusively by more people moving to the county than leaving, and migrants tend to need a home straight away. Even if the promised 1.5 million new homes are delivered this parliament, it won’t be enough. 

A metaphorical meteorite is heading towards housingprovision in this country. I fear those at the periphery of society will feel its impact hardest. 

• Louisa Sedgwick is Paragon Bank’s Managing Director of Mortgages *