The Renters’ Rights Act came into force in England on 1 May, bringing some of the biggest changes to renting in decades.
It was designed to give tenants more security and protect them from unfair practices, and many renters have welcomed the new rights it brings. Nearly six months on, though, the market is changing in ways that not everyone expected, with more landlords selling up and rents continuing to climb in many areas. Here’s a look at what the law does, how the rental market has shifted and what it all means for tenants and landlords.
What the Renters’ Rights Act does
The law ended so-called no-fault evictions, which allowed landlords to ask tenants to leave without giving a reason, and moved most renters on to rolling tenancies with no fixed end date. It also limits rent increases to once a year, gives tenants the right to challenge rises they think are too high and bans landlords from refusing tenants simply because they receive benefits or have children.
Another key change stops landlords and letting agents accepting offers above the advertised rent, which was meant to put an end to bidding wars between tenants. The law also limits how much rent can be taken in advance, so tenants can no longer be asked to pay months of rent up front before moving in.
More landlords are selling up.
Many landlords had already been leaving the market for several years because of rising costs and tax changes, and the new rules appear to have sped this up. One property analysis found that around 562 rental homes left the market every day between June and September this year, compared with 495 a day during the same months last year and around 167 a day at the start of the decade.
With fewer homes available, competition among tenants has become fiercer in many places. Some landlords who are staying in the market say they’re seeing more interest in each property, which means homes are being let more quickly.
Rents are still rising.
Although the new rules were partly designed to keep rents under control, prices have continued to go up. An analysis of official figures found that rents rose by 0.8% in the three months before the law came in, then by 1.2% in the three months afterwards.
Room rents in shared homes have also hit record highs in most parts of the UK, with the average cost of renting a room now around £769 a month. In London, the figure is closer to £932, while the North East has some of the lowest prices in the country.
New ways of setting rent are now in place.
Because landlords can no longer accept offers above the asking price, some are setting a higher rent to begin with and inviting offers below it. For example, a home that might once have been advertised at £1,500 a month could be listed at £1,750, with tenants encouraged to offer what they can afford up to that figure.
One estate agent reported a 36% rise over the past year in the number of landlords increasing their starting prices. Critics say this means tenants could still end up paying more, while others argue it simply reflects high demand for a shrinking number of homes.
Tenants are working harder to stand out.
With more competition for each home, some renters are going to greater lengths to impress landlords, including writing short introductions about themselves with photos. While landlords can’t turn people down for receiving benefits or having children, they can still check things like income, job history and whether someone has a guarantor.
Because large up-front rent payments are no longer allowed, landlords are paying closer attention to these checks. That can make it harder for some people to find a home, such as those who have recently moved to the UK, and some worry this could lead to a market where certain tenants struggle to get a look-in.
More changes are on the way.
Landlords face more new rules in the months ahead, starting with a national landlord register that begins rolling out from 15 December, starting in the West Midlands. Landlords will need to register each property and pay an annual fee of £65 per home, along with sharing details such as the number of tenants and proof of safety certificates.
There’s also a 2030 deadline for privately rented homes to meet higher energy-efficiency standards, which could cost some landlords up to £10,000 per property. Smaller landlords with only one or two homes may find these extra costs harder to manage than larger property businesses, and some say they won’t re-let once their current tenants move out.
What it all means for renters
While finding a home may be more competitive in some areas, tenants now have stronger protection once they’ve moved in. If your landlord tries to raise the rent by more than you think is fair, you can challenge it, and you can’t be evicted without a valid reason.
When house hunting, have your documents ready, such as proof of income and references, so you can move quickly when you find the right home. Charities such as Shelter and Citizens Advice offer free advice on your rights, and you can also get help from your local council if you’re struggling to find somewhere to live.
