UKAA response to second reading of the Renters (Reform) Bill
鈥淭he UK Apartment Association (UKAA), the representative body for the build-to-rent (BTR) sector in the UK, supports considered, evidence-based regulation that sets standards and expectations for the rental sector as well as offering protection to both landlords and customers. We remain keen to engage positively with policymakers to improve the performance of the rental sector and welcome the second reading of the Renters (Reform) Bill.
鈥淭he BTR sector is not supportive of abolishing Section 21鈥榥o-fault鈥� evictions and encouraged that the idea has been indefinitely delayed and not included within the Bill.
鈥淗owever, there are other changes proposed that raise significant risk of unintended consequences that need to be very carefully considered. As we saw in Scotland, intervention via rental increase caps, and in this case the abolition of assured shorthold tenancies, raises concerns with investors which can stall future investment in delivering high quality new homes designed specifically for rental and professional management鈥�.
Impact on abolishing assured shorthold tenancies
鈥淲e are primarily concerned about the abolition of assured shorthold tenancies which will prevent tenants and landlords from freely agreeing longer-term fixed tenancies with mutually agreed rental increases.
鈥淭he Bill proposes a strict process of rental increases and renewal determined by the local market rent. However, where rental supply is limited, landlords may mitigate against the impact of mortgage and cost inflation, as we witnessed with Scotland鈥檚 2022 cap on rent increases. This potentially puts customers at a disadvantage and risks artificial rental inflation across the market.
鈥淭his scenario is further exacerbated by the opportunity for landlords to 鈥榬eset鈥� rent levels more often. The abolition of longer-term fixed tenancies creates higher occupancy 鈥榗hurn鈥� as renters move more fluidly on two months-notice at any time.
鈥淲here landlords are concerned about seeking possession of their property for non-performing occupants, vetting processes could become more stringent and consequentlyfurther marginalise the 鈥榮queezed middle鈥� and lower income earners.鈥�
Consumer certainty
鈥淐onsumers also need greater certainty. The fluidity of occupancy, resulting from a lack of long fixed term tenancies potentially increases customer vulnerability to fluctuating market forces. There is a risk that some landlords may increase rents and will be able do so more frequently where tenancy turnover is higher. Longer fixed term tenancy options provide protection and value to landlords and customers alike.鈥�
High quality standards across BTR
鈥淭he UKAA stresses that BTR landlords already meet and exceed most requirements of the proposed Renters (Reform)Bill.
鈥淭he BTR sector has attracted the highest calibre institutional capital from across the world having proved that the sectorcreates, maintains and professionally manages high quality homes, in the long term, for the benefit of customers, local communities and investors. The UKAA is and will continue to set the highest standards for the BTR industry (specifically as well as supporting and encouraging the Private Rented Sector to do the same).
鈥淭he UKAA is leading the development of a Code of Practice for BTR operators, setting out standards of practice in terms of quality of accommodation, customer service, response to resident issues, communication, and resident well-being as well as clear and fair terms of tenancy.
鈥淭he BTR sector is adding significant numbers of much-needed, high quality additional homes across the UK with over 88,000 new homes completed, and a further 168,400 in the planning and delivery pipeline (Savills, May 2023). The UKAA calls on government to further recognise the uniqueness of the BTR proposition and do more to support the delivery of BTR homes across the UK.鈥�
Brendan Geraghty,聽CEO, UKAA