The shortcomings in the Renters Rights Bill continue to be identified, with organisations in different parts of the industry voicing concern.
In a letter to Housing Minister Matthew Pennycook, accreditation service safeagent warns about two clauses in the Bill as currently drafted that would – in its opinion – severely restrict access to the private rented sector for less well-off prospective tenants, some of whom will be vulnerable or at risk of homelessness.
In her letter to Pennycook, safeagent chief executive Isobel Thomson writes: “New Clause 13 will prohibit the payment of multiple months of rent upfront. Whilst we understand that this measure is driven by the desire to reduce the cost pressures faced by prospective tenants, there will always be those who are likely to struggle to pass affordability checks, in order to prove their ability to cover their rents. In these cases, payment of several months rent upfront is a legitimate solution to these difficulties.”
She continues: “New Clause 14 will undermine landlords’ ability to limit risk, by preventing them from requesting the first month’s rent prior to entering into the tenancy agreement. Once again, this takes away a legitimate option for tenants with no (or a poor) credit history, who nonetheless need to access the private rented sector. “
Elsewhere in the letter, Thomson says if the clauses become law, there would be “a heightening of the barrier facing those least likely to be able prove their ability to sustain a tenancy.”
There is also criticism of the Bill from Kate Davies, executive director at the Intermediary Mortgage Lenders Association.
In an opinion piece for Mortgage Strategy she writes: “Despite many voices of reason warning of the potential unintended consequences of implementing the Renters’ Rights Bill – including forcing landlords out of the market, pushing up rents to record levels, increasing the number of homes lying empty and possibly creating more homelessness – the government does not appear to be in listening mode.”
Davies is also concerned about issues regarding a ban on upfront rental payment, which she sees as a threat to the lucrative international student population which contributes an estimated £40 billion to the UK economy.
Davies says: “Despite a recent decline in numbers due to rule changes introduced by the last government, 25% of the UK’s student population is made up of overseas students. The vast majority live in rented accommodation, usually paid for by their parents or other family members.
“By definition, as they live overseas, those parents or family members do not have a credit history in the UK and cannot be checked out by potential landlords. As a result, it is common (and reasonable) business practice for a landlord to require three or six months’ rent from an overseas student in advance.
“Banning landlords from receiving rents before a student moves in could severely hinder overseas students’ chances of finding suitable/affordable accommodation near their place of study, which could act as a further disincentive to studying in the UK.”
She is also concerned at the removal of fixed-term assured tenancies and Assured Shorthold Tenancies, believing the move could lead to more empty homes and fewer properties in the rental sector.
She writes: “Currently, homeowners who have to leave their property for a year or two because they have been posted to a different city or country with work can rent out their home for a specified period, safe in the knowledge that they will be able to move back in when they need to.
“If the Bill passes unamended, many people in such situations may be reluctant to rent out their homes for fear that it might require a protracted legal process to get them back.”