The day is drawing closer. The Renters’ Rights Bill seems to be rapidly progressing through Parliament, with the House of Lords completing its ‘Committee Stage’ on 15 May, and the Report Stage scheduled on 1 July – next Tuesday!
Following that, there’s still a little more to-and-fro, but it won’t be long before the Bill will proceed to ‘Royal Assent’ – and then become the law.
But the draft Bill, in its current form, is still causing a lot of concern amongst landlords and letting agents, and perhaps tenants should be worried about some of the provisions in it – much as they are intended to help.
So what does it look like, what do we still feel needs to change, and how might it affect the property market in Herne Hill and beyond, if it proceeds as it is without further amendment.
Today’s article breaks these things down – but also looks at why this might not just be a ‘lettings market’ issue…
Let’s recap briefly on the process itself first off, and summarise where we are right now.
To have reached the Report stage, the bill has been through the House of Commons and is now at almost the last step with The Lords before it passes back to the Commons. That means full readings of the bill have been made in both Houses (three readings in the Commons, two in the Lords but the third due shortly); debates have been had and amendments tabled; and those proposed amendments have now been debated and either withdrawn, rejected or agreed by committees – first in the Commons and then in the Lords.
It was that committee stage in the Lords that was completed on May 15.
What that means, to keep things short, is that whatever shape the Bill is now in, is what will be reported to the House of Lords on July 1. In fact, only agreed amendments will be discussed at that stage.
After that, the Bill will move to its Third Reading in the House of Lords, a final ‘tidying up’ phase before returning to the Commons for consideration of any Lords’ amendments.
The final text of the Bill must be agreed by both Houses, so if any further disagreements are had and amendments proposed and made, it will go back and forth – a process they call ‘ping-ponging’, believe it or not…
Eventually the final text will be approved by both Houses and then the Bill will pass to receive Royal Assent and become legislation.
We aren’t quite there yet but we are getting increasingly close… and as mentioned earlier, from our point of view there still seem to be a few sticky areas that need to be considered.
At Petermans Estate Agents, we know that change can be unsettling. That said, we have navigated plenty of legislative overhauls before, and experience tells us that the property market has always adapted.
People will always need somewhere to live, and the private rented sector (PRS) plays a crucial role in meeting a large proportion of that housing need.
Nevertheless, many landlords have real concerns about what is coming, and anecdotally it does feel like more landlords than normal are selling up – or are at least actively thinking of doing so.
A recent survey by Simply Business reported that 1 in 4 landlords were planning to sell a rental property in the next 12 months, with half citing new legislation as the reason behind it.
As yet, that sort of scenario has not played out. But imagine it did! Data from London councils from October 2024 recorded 1.1 million privately rented homes across the city. If 25% of those were to be sold, that could reduce the number of rentable homes in London by a quite staggering 275,000 properties.
In the past, we might have expected such sales to appeal to other landlords, who would keep on the existing tenant in a frictionless way, or who would fill the vacant property with new tenants.
The worry is that other landlords might not be so willing to step in, as things stand, given current concerns about the future of lettings.
There tend to be four main areas in the Bill that typically worry landlords the most, from the conversations we have been having.
From our conversations with local landlords, four key issues in the Renters’ Rights Bill are causing the most concern:
The Bill proposes replacing fixed-term tenancies with rolling, periodic agreements.
Why it matters:
Landlords may have to re-let properties more frequently, increasing costs and hassle.
Student lets – which usually run on fixed academic calendars – could become problematic.
Short-term renters (e.g. professionals on contracts, people between moves) might exploit the system by posing as long-term tenants, only to leave early.
The risk:
Landlords could become more cautious about letting to students or to tenants without a clear long-term plan, reducing options for legitimate renters.
The Bill would restrict landlords from asking for more than one month’s rent upfront.
Why it matters:
International students or tenants with no UK credit history often offer several months’ rent in advance.
Tenants with poor credit but sufficient savings may be locked out unfairly.
The risk:
Landlords might feel they can’t safely accept some otherwise reliable tenants – reducing access to housing for groups already at a disadvantage.
Section 21 – which allows landlords to regain possession without stating a reason – would be scrapped.
Why it matters:
Landlords would need to rely on Section 8 grounds, which require a valid reason and a court order.
Court backlogs are already severe.
One amendment (not yet confirmed) proposes raising the rent arrears threshold from two to three months before action can be taken – and arrears must be present both at the start and at the time of court proceedings.
The risk:
Possession claims could take many months, leaving landlords significantly out of pocket while still responsible for costs like mortgages and repairs.
Under the new rules, if a landlord regains possession in order to sell – but doesn’t succeed – they can’t re-let the property for 12 months.
Why it matters:
Genuine landlords with failed sales could be left with empty homes they can’t legally rent out.
This could be financially devastating, especially if a buy-to-let mortgage is involved.
The risk:
Landlords may feel trapped or punished even when acting in good faith.
These four issues in particular could have the potential to drive private landlords away from the sector.
However, it is not just the lettings market that could be affected …
If a significant number of landlords choose to exit the market due to these changes, London could face a real shortage of rental properties. Such a scarcity would inevitably lead to increased rents and force tenants to seek housing further afield, impacting the local economy and community cohesion here in Herne Hill.
As for the sales market, an influx of perhaps tens of thousands of property listings for sale across London would almost certainly have a damaging effect – even if spread evenly through the year. At present, according to Rightmove data there are just under 60,000 properties for sale in the capital. A sudden increase in numbers – especially at the level suggested by the Simply Business survey – would mean far more properties being available than there would be active buyers out there.
That would mean many left unsold – and typically, we would expect that to lead to property prices falling, thereby destabilising the sales market.
It is not something we predict will happen, but it is why we add our voice to the many in our industry that are putting pressure on the government to rethink the bill as it currently looks, during these crucial latter stages.
The Renters’ Rights Bill aims to provide greater security for tenants – and realistically, we do agree that reforms are needed in some areas.
Nevertheless, noble as its ambitions are, it is essential to consider the potential unintended consequences for landlords and the broader property market – both the lettings market and the sales market – both here in the capital and across the country.
We hope that the House of Lords will carefully evaluate these concerns during the Report Stage and may propose further changes and provisions to the amendments that have been agreed.
We also urge peers, ministers and members of parliament to think hard when it reaches the ‘ping pong’ phase – because that is the last opportunity to tidy this bill up to the extent we feel is necessary to really ensure a balanced approach that protects tenants without discouraging landlords from the Private Rented Sector.
At Petermans, we remain committed to supporting our landlords and tenants through these changes, providing guidance and expertise to navigate the evolving landscape. As we say, whatever the outcome and whatever the period of turbulence that follows, great or small, the market will survive and industry around it will continue to rumble on.
Challenging waters; let us hope the sailing is as plain as possible.
We are required by law to conduct anti-money laundering checks on all those selling or buying a property. Whilst we retain responsibility for ensuring checks and any ongoing monitoring are carried out correctly, the initial checks are carried out on our behalf by Lifetime Legal who will contact you once you have agreed to instruct us in your sale or had an offer accepted on a property you wish to buy. The cost of these checks is £60 (incl. VAT), which covers the cost of obtaining relevant data and any manual checks and monitoring which might be required. This fee will need to be paid by you in advance of us publishing your property (in the case of a vendor) or issuing a memorandum of sale (in the case of a buyer), directly to Lifetime Legal, and is non-refundable. We will receive some of the fee taken by Lifetime Legal to compensate for its role in the provision of these checks.