Housing Minister Matthew Pennycook has defended the government's Renters' Rights Act against industry warnings that it will disadvantage students, despite his department allegedly undertaking 'extensive' engagement with the student sector. The legislation, which abolished all fixed-term tenancies in favour of rolling, periodic contracts, has sparked concerns from HMO landlords who rely on short-term leases to cater for the influx of students each academic year.
The Minister's assertion came in a written parliamentary answer to Labour MP Jayne Kirkham, who pressed him on the impact of the shift on student HMO landlords. Mr Pennycook confirmed that his department engaged broadly with the sector and highlighted the 'green rating' given to the Act's Impact Assessment by the Regulatory Policy Committee (RPC). He also stated that the government continues to monitor trends in the private rented sector, with reports due two and five years after implementation.
However, an examination of the RPC's assessment reveals a more nuanced picture than the Minister suggested. While the Renters' Rights Act was deemed "fit for purpose" overall by the committee, specific sections were only given a "weak" rating – including those on wider impacts and cost-benefit analysis. This indicates that crucial aspects of its potential effects were not fully robustly analysed.
The RPC's report criticised the government for failing to adequately consider the financial burdens the legislation would place on landlords. The committee warned that the impact assessment had not sufficiently addressed the potential costs, nor the impact on private rental housing quality, that could arise from making the market less liquid. This illiquidity could stem from landlords being less able to evict tenants due to the abolishment of Section 21 'no-fault' evictions.
The committee also expressed concerns that if landlords are less able to evict and incentivised to invest in property quality, they might only meet minimum regulatory standards. This could lead to a decline in rental housing stock quality – a critical consideration given the ongoing need for new and affordable housing across the UK. For students, who often rely on a competitive and well-maintained private sector, the implications are significant.