Labour's Renters' Rights Act, enacted in May, aimed to bolster tenant protections by ending 'no-fault' evictions, capping rent increases, and banning fixed-term tenancies. However, in the months since its implementation, renters in London and across England are reporting a more challenging housing market characterized by rising rents and a shrinking supply of available properties.
Landlords, unable to accept offers above the advertised price to quell bidding wars, are now reportedly listing tenancies at their highest perceived market value. Data from property portal Rightmove indicates that the average rent in London reached a record £2,791 per month in the second quarter of the year, a 2% increase from the previous quarter. Rents outside the capital also saw a rise of 1.9%, averaging £1,397 per month between April and June.
Tenants describe increased difficulty in finding affordable housing. Laura Meyer, 28, who has been searching for a one-bedroom flat in southwest London since July, reported that estate agents described the current market as the most competitive they have seen in 30 years, partly attributing the situation to the Renters' Rights Act. Meyer noted that properties are being listed at the upper price point, making it difficult for prospective tenants to offer lower and have their bids accepted.
Meyer, who currently pays £1,200 a month for a shared flat, has revised her budget upwards, realizing a one-bedroom flat in her desired area now costs around £2,000 a month, a significant increase from her initial target of £1,600. She also noted a substantial increase in inquiries estate agents receive since the Act's introduction.
Statistics from SpareRoom, a house-sharing website, show a 3.2% decrease in advertised rental rooms in the year leading up to June. A survey of over 1,000 landlords across England suggested that nearly half were considering selling their properties to avoid the new regulations, a factor contributing to the reduced supply.
Lydia Holt, 25, who was seeking a two-bedroom flat in north London, found it nearly impossible to find a suitable place within budget. She observed that prices for two-bedroom flats had increased by approximately £400 per month compared to when she moved into her current three-bedroom flat, which previously cost between £2,800 and £2,900 per month. Estate agents reportedly advised listing properties at prices 20% higher than expected due to anticipated tenant offers.
Reports indicate that a significant number of tenants received eviction notices before the legislation took effect. Acorn, a renters' union, found that 'no-fault' evictions constituted one-fifth of member reports in October, rising to nearly one-third by January. A survey of 4,500 tenants by SpareRoom found that 11% of tenants in England were evicted or received an eviction notice in the six months between the Act receiving royal assent and its implementation, with this figure rising to 12% in London.
Hetty, 30, who lived in a four-bedroom house share in Earlsfield, was given notice by her landlord to vacate ahead of the new legislation. Her rent increased from £715 to £940 per month during her tenancy. Her landlord cited a desire to avoid new penalties imposed on landlords as the reason for selling the property. She described the London rental market as expensive, with shared living costs approaching what individuals might pay to live alone elsewhere in the country. Hetty noted a decline in the quality of available housing, with properties exhibiting issues like black mold and outdated fixtures being listed at high prices.
A spokesperson for the Ministry of Housing, Communities and Local Government stated that the Renters' Rights Act aims to provide tenants with security and stability by preventing excessive rent increases, limiting rent rises to once a year, banning rental bidding wars, and empowering tenants to challenge excessive costs. The Act also includes provisions against discrimination based on benefits or children, and allows tenants to appeal unreasonable refusals for keeping pets.