The Renters’ Rights Bill’s cap of advance rents to one month could have the effect of pushing vulnerable tenants out of the market, an estate agency boss has warned.
Des Simmons, managing director of Bournecoast Property Agents, said: “That upfront rent was their only way to offset weak credit or lack of UK references.
“Without it, they are likely to be screened out by landlords before they even apply.
“This bill could unintentionally create a two-tier rental market, where only the ‘perfect’ tenants, those with clean credit, regular jobs, perfect references, can get homes. Everyone else gets shut out.”
The bill will also replace fixed tenancies with rolling periodic tenancies, and allow tenants to move out with just two months’ notice.
Simmons suggested a fixed tenancy is far more suitable for contract workers, NHS locums, people between homes and temporary project staff, where a 3-6 month agreement can currently be signed with landlords.
If a tenant’s employment reference doesn’t show long-term, permanent work in a single location, landlords will see them as high risk knowing the tenant could give two months’ notice and leave at any time, Simmons warned. This uncertainty makes it virtually impossible for landlords to plan around re-letting or regaining possession.
There are similar issues for owners of short-term rentals, who could struggle to regain holiday lets after the government repeals Ground 3 of Section 8.
Simmons also claimed the private student rental market could “collapse”, as fixed terms aligned with academic years is the ideal solution for landlords, which could make them less inclined to rent to students after periodic tenancies come into force.