Rental supply will be hit

• THE Renters (Reform) Bill, about to receive its second reading, is remarkably similar to the white paper of June 2022.

This is interesting because it ignores the report from the levelling up, housing and communities committee led by Labour MP Clive Betts, published in February, suggesting considered amendments that would hopefully help achieve the goals without hitting the supply of rental property too hard.

A pertinent question is to what extent landlords will exit the sector while they still can gain possession of their properties before the legislation comes in. The fact that that will happen is not contested; what is interesting is the extent and the profile of the withdrawn properties.

That is not yet clear, but the legislation bites hardest in cases where landlords either have, or foresee, problems so the expectation is that will be the hardest hit. Ad-hoc evidence supports this, suggesting that where landlords have had problems involving substantial costs they withdraw hurt.

Some research, published in early May, found that in the first quarter of this year, a third of private landlords in England and Wales said they planned to cut the number of properties they rent out. This is an all-time high and is up from the fifth who said they planned to cut the number of properties they let in the first quarter of 2022.

By contrast, just 10 per cent of landlords now say they plan to increase the number of properties they rent out. The government does not appear to be worried by this and are, indeed, factoring in some reduction.

A few background facts may point one to explaining this apparently left-leaning behaviour:

— a general election looming with the government well behind in the polls and wishing to attract swing voters (there are 11million tenants in England and Wales);

— a recognition that the vulnerable who will find it harder to find, or even remain in, private sector accommodation are not the voters they are concerned about (yes they do model these outcomes);

— the legislation, as it is major, will take the rest of this year at least and be implemented in stages such that the fall-out will not be clear until a new government is in place; and

— landlords, unhappy as they might be, are unlikely to represent swing voters as much as tenants.

Some tenants will undoubtedly benefit from the changes but not those who fall into arrears due to struggling to pay and that is before the passing of the act. Afterwards, well, who knows? But supply will be impacted.

ALEX SHINDER, NW3