Could Angela Rayner's squeeze on landlords hurt the very people it's supposed to help?

Independent

21-06-2025

On the face of it, Angela Rayner's Renters' Rights Bill has some benefits – not least that Section 21 no-fault eviction notices will be scrapped, giving tenants more security.
But experts are now warning that, as part of Labour's reforms currently making their way through parliament, landlords would be prevented from re-listing their properties as rentals for a year if they try – and fail – to sell up. Which, therefore, also means they'll have to forgo rent for a year.
Failed sales are not unusual – and with the latest Rightmove stats on the housing market, things are looking especially bleak for homeowners in London and the South East. If they are forced to hold onto their property under these new provisions, not only will they as landlords be out of pocket, we'll end up with even more empty properties gathering dust.
Right away, you can see the problem: Britain already has too many of those and this may lead to an even bigger shortage of housing during what the National Rental Landlords Association (NRLA) describes as 'an unprecedented supply and demand crisis'.
Indeed, the organisation puts the number of empty properties in the rental sector at roughly half a million in England alone, using data from the government's English Housing Survey.
'We are concerned that the government does not recognise the risk that the number of empty homes in the private rented sector may substantially increase if this proposal passes into law,' says Meera Chindooroy, the trade body's deputy director of campaigns, policy and public affairs.
So, has the government lost the plot? Not quite. I can see the method in Rayner's apparent madness. Let me explain…
The problem with the private rental market is that the balance between tenant and landlord has been out of whack for too long. The current system, which allows for tenants to be booted out with a couple months' notice at the end of a year's tenancy, can leave them in a horrible jam if the owner decides that it's time to book a quick profit when the property market gets hot.
Rayner's policy aim with the bill is to create a situation where this doesn't happen because most landlords will be professional – in it for the long haul, rather than hobbyists who buy themselves a flat or two to fatten up their pensions.
The re-listing ban is an explicit attempt to make landlords think very carefully before putting their properties on the market. It makes that option a risky move for them.
Other provisions included in the Bill that the NRLA describes as 'the biggest change to renting in over 30 years' include a protected 12 months at the start of a tenancy, where a landlord will be barred from evicting a tenant for the purposes of selling.
As also mentioned, there will be the abolition of Section 21 notices, better known as 'no-fault' evictions. A national database for the private rented sector will be created, and there will be an ombudsman to handle disputes. Landlords will no longer be able to discriminate against families or benefit recipients – nor will they be able to create bidding wars.
Some of these policies were first mooted by Michael Gove, when housing was part of his portfolio. And while the current chancellor Rachel Reeves introduced a 5 per cent 'second home' stamp duty surcharge, the drive to professionalise the sector began with former Tory chancellor George Osborne.
He restricted the tax relief residential landlords could claim on mortgage interest payments to the basic rate of 20 per cent. These measures ramped up costs for the small fry and many left the market as a result.
As you can see, there has been a degree of cross-party consensus on the need for reforms aimed at improving life for private sector tenants, who are often left feeling as if they're lost in a swamp with no map and no mobile phone reception.
As a package, the reforms should, in theory, improve life for them. If an owner is in it for the long term, the renter can make a home of their tenancy, as often happens on the continent. Needless to say, a long term tenant could also improve life for the landlord, because they will likely be more inclined to look after the place (if you've ever been house-hunting, the ex-rentals stand out – and not in a good way).
However, at this point I feel obliged to trot out one of those old sayings: 'The road to hell is paved with good intentions.' You don't help renters if you end up with fewer properties on the market. Constricting supply will inevitably add rocket fuel to rental prices, which are already too high.
According to the quarterly tracker by Rightmove, the average advertised rent of homes outside of London rose to a record £1,349 in the first three months of the year. London, meanwhile, recorded its 14th consecutive record, with monthly rents increasing to £2,698.
It is true that Rightmove noted a (welcome) increase in supply, but that doesn't mean there isn't still a shortage overall.
There are some good things in Rayner's reform package. But facts are facts and markets are markets – and if she squeezes landlords too hard, she will hurt the market and end up squeezing tenants – the last thing anyone wants, least of all her.
Banning rents for a year after a failed attempt to sell is a measure that demands a rethink, however well-intentioned.