The Renter’s Rights Bill [RRB], currently undergoing its report stage in the House of Commons, aims to ‘transform’ the private rented sector [PRS] in England. A bold claim indeed. The Bill constitutes something of a spiritual successor to the Renters’ Reform Bill introduced by the previous Conservative government and scrapped in May 2024 after Parliament’s dissolution pre-General Election. Where the earlier Bill faced broad criticism from tenants and the Renters Reform Coalition in particular for its ‘watered down’ contents, the RRB came out the legislative gates in September 2024 swinging with a mixed bag of proposals. Few are, such as the PRS Database, beneficial to landlords and tenants alike through providing much-needed informational clarity, whereas the majority are outright destructive to all actors within the private property market alike.
When observed as a whole, the RRB illustrates the government’s failure to lay down the proper economic and legal groundwork in their approach to housing policy reforms, deploying short-term political and populist sentiments as justification without pulling back the curtains to understand the long-term, driving forces behind property rights’ allocation. As sagely put by Robert Cooter, co-editor of the International Review of Law and Economics, law requires economics to understand its behavioural consequences, just as economics requires law to understand the underpinning of markets. This piece therefore seeks to evaluate the RRB’s key proposals accordingly.
The RRB’s flagship reform is the abolishment of (the so impartially labelled), ‘scourge’ that is Section 21 ‘no-fault’ evictions governed under the Housing Act 1988. This provision in its current form allows landlords to regain possession of their property by terminating an assured shorthold tenancy (the most common form of private tenancy in England), with the sole requirement that he or she has given the tenant at least two months’ notice of their decision to repossess. Under the RRB, this notice period has been extended to four months and the scope of evictions narrowed from no-fault to no-‘reason’ as landlords must provide at least one from a new set of ‘Grounds for possession’ set out by the Bill.
This article certainly does not dispute the importance of ensuring stability for tenants, who may find themselves in a precarious position seeking out new homes in an increasingly competitive market. But this limitation presents an equal ‘scourge’ upon the legal system. Possession claims already constitute a heavy burden, with the current average resting between 6-18 months. If landlords are required to justify their reasons for serving eviction notice to a tribunal, accounting for the information costs and delay of providing evidence if so required, this judicial burden will only increase as those costs inevitably trickle down through hiked rent.
From an economic perspective, if the potential litigation costs of housing a vulnerable tenant outweigh the cooperative surplus of renting their property, landlords are incentivised to default to their threat value: either leaving the premises empty or forming agreements with wealthier tenants who are more financially flexible and thus willing to relocate at short notice. This effect of market distortion, contraposing Labour’s policy objective of greater tenant protections, is a core flaw of applying a purely legal analysis to the allocation of property rights; resulting in legislation that is simply too broad and too blunt.
This ‘overgeneralisation’ issue of the RRB is further illustrated by the abolition of fixed-term tenancies in favour of periodic tenancies. University students in England are commonly granted a 12 month fixed-term tenancy contract with respect to the yearly academic cycle. Yet the RRB imposes the conversion on all ‘existing fixed terms’, both increasing the informational bargaining costs and reducing clarity for landlords who can not guarantee if their properties will be available in subsequent academic years. The solution? Landlords rescind their property from the market, reducing supply and increasing rental prices, or offset their future risks by increasing rent regardless.
One could counter-argue the above effects using the RRB’s proposal for controlled rent increases. This proposal sets out to ‘empower’ tenants to challenge unreasonable increases (in excess of market rate) at the First-Tier Tribunal, while restricting landlords to increasing rates at a limited rate of once per year. While controlled increases present a prima facie solution to one of the two aforementioned recourses for landlords (passing costs onto tenants), it merely shifts the weight from one end of the scale to the other. If costs pile onto retail landlords, they will fall back on their threat value and reduce available housing, or sell-up to commercial investors who can afford to offset their costs against a larger portfolio.
The latter outcome was endorsed in a 2024 Impact Assessment of the RBR by the Ministry of Housing, which acknowledges the ‘risk… in some landlords leaving the sector’. The report then delivers the weak dismissal that an estimate is simply ‘difficult’ to produce, and deflects that similar reforms in Scotland have ‘not… negatively affected supply’; despite a reduction of 22,000 rental properties in Scotland’s PRS in the last year. It asserts that ‘landlords facing the greatest costs… will be the ones providing the poorest service’ and anticipates ‘they are more likely to exit… and [be] replaced by more professional landlords.’
Setting aside the conspicuous lack of empirical evidence backing the first claim, the second claim leaves an even greater issue without redressal. The view that property is best left in the hands of monopolising investors over ‘mom-and-pop’ landlords may correctly find that a tenant’s statutory rights would have a greater likelihood of performance, but does not address that the RRB only reinforces the landlord-tenant relationship while constricting opportunities for younger generations seeking first-time home ownership. According to a 2024 intergenerational audit by the Resolution Foundation, the number of homeowners aged 19 to 29 years fell by two-thirds between 1989 and 2013. If retail landlords continue transacting upwards, the housing market will only continue to dangle the prospect of real property ownership further and further from the hands of millennials gazing up wistfully at the bottom rung of the property ladder.
In his classic treatise, Progress and Poverty (1879), Henry George proposed a heavy universal tax on land to replace all other forms of taxation. He argued that such a tax would not require any redistribution of land, but recognise that land belongs to all while freeing up productivity and labour from taxation. This proposition illustrates the fault of deviating from an interdisciplinary analysis, albeit from the other end of the legal-economist spectrum, and neatly exemplifies the core pitfall of the RRB. There are no doubt renters who would find satisfaction and security in additional statutory rights and informational systems that provide greater control over their affairs and clarity of their rights respectively. But to apply a universal standard that presumes the unchanging status of tenants, whether through legal (legislative) or economic (taxation) means, is to deny the self-determination of individuals to decide the form which security through ownership takes to them personally: be that through freehold, leasehold, or even by contractual licence. Just as Henry George’s idea superimposes his own conception of common ownership onto society at large, so too does the Renter’s Rights Bill— by superimposing a singular, politicised idea of ownership on the PRS with little regard for the diverse interests of the 11 million private renters and 2.3 million landlords operating in England today. It would seem that a more nuanced approach is required.
