The Intermediary – August 2025 - Flipbook - Page 36
RENTERS’ RIGHTS
BILL RISKS
UNDERMINING
RENTAL SUPPLY
ew will have shed a tear
over the resignation of
Homelessness Minister
Rushanara Ali. The
optics of any politician,
let alone one charged
with tackling homelessness, turfing
out their tenants and whacking up the
rent were never going to be prey.
But the headlines tell only part of
the story. In fact, Ali had done nothing
illegal. Property lawyer and landlord
champion Suzanne Smith described
the story in the following nutshell: “A
case of a landlord with a low-yielding
property whose tenants moved out
during a periodic tenancy (rolling on
a week-by-week or month-by-month
basis), aer having been told the
landlord was intending to sell, but
without having been served a Section
21 notice. The landlord tried to sell
it, gave up, and found new tenants
at a higher rent, with a new yield of
around 5%.”
In other words, it was a fairly
routine course of action in today’s
private rented sector (PRS). The key
point here is that, while the move was
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The Intermediary | August 2025
lawful under current rules, it will not
be once the Renters’ Rights Bill (RRB)
becomes law, most likely later this
year or early 2026.
The Bill will ban landlords from
increasing rent within six months
of a tenant leaving a property if that
tenancy ended because the landlord
intended to sell. Landlords will only
be allowed to increase rents once a
year, with two months’ notice, to the
market rate – the price that would be
achieved if the property was newly
advertised to let. If a tenant believes
the proposed rent increase exceeds the
market rate, they can then challenge
this at a tribunal. This is a notoriously
slow process, and during the time
it takes for a ruling to be made, the
tenant will continue to pay the old
level of rent. Even if the tribunal were
to find in the landlord’s favour, there
would be no requirement for the
tenant to make up the difference for
the rental period under dispute.
Battening down
The prospect of the RRB is already
influencing landlord behaviour.
Pegasus Insight’s Q2 2025 Landlord
Trends research found that 61% of
landlords planned to raise rents in the
next 12 months, with an average upli
of 6%, notably higher than historical
norms. For comparison, average
planned rent increases were in the 3%
to 4% range in earlier Pegasus surveys
in 2022 and 2023, suggesting a sharp
change in sentiment.
Portfolio running costs are cited
as the primary driver, but, for many
landlords, the looming RRB is
prompting pre-emptive adjustments.
Nor is this just about rent rises.
The same research revealed that only
6% of landlords intend to purchase
more buy-to-let (BTL) property in the
next 12 months, a record low since
Pegasus began tracking the question,
and down from 18% in Q1 2022.
Meanwhile, 38% say they plan to sell
property in the coming year.
The consequences for the PRS could
be serious.
The sector currently houses
just under 20% of UK households,
ranging from students and young
professionals to families with children
