The past week has been a scramble for many letting agents and their landlords as the rump of the Renters’ Rights Act has gone live leaving just the Decent Homes Standard, new Ombudsman and landlord register to come later.

Here at The Neg we’ve been inundated with commentary from letting agency seniors, consultants, landlord leaders and other experts all hailing the legislation as a ‘step forward’ in the ‘just fight’ against rogue and criminal operators within the industry.

While I’m sure their intentions are honourable, it’s hard not to treat this background burble as PR spin designed to ensure that the ‘good players’ within the sector sound and look like they’re behind the huge changes within the legislation. This is despite the law wrapping the industry in considerably more red tape.

But in summary, I’d say the legislative changes have prompted many commentators to highlight how the Renters’ Rights Act will have much harder implications both now and down the line for agents and tenants than intended.

This will include a rise in demand for rent guarantee insurance – which is effectively an extra cost for landlords – , a likely reduction in supply as more landlords sell up rather than face the pain of adhering to regulation – particularly smaller accidental ones – , plus greater property management problems for agents as tenants become bolder about complaining.

The most common prediction is that landlords will be (and already are) more cautious about how they operate. Because the consequences of making mistakes are now very expensive. And remember that housing minister Matthew Pennycook (main image) recently gifted England’s councils millions in funding to track down those who don’t comply with the Renter’s Rights Act.

More worried

Also, landlords are already getting more worried about referencing which used to be a ‘nice to have’ but is now an essential tool when evictions are going to become even more costly and time consuming to complete.

This all comes on top of previous warnings that banning Section 21 ‘no fault’ evictions was ill advised given the fragile state of the courts; that the new rules on discriminating against tenants with pets, on benefits or with children will be difficult to enforce on a good day; and that the changes to tenancy law will make the student lets sector difficult to manage and render profitable.

To illustrate the point, here’s Carter Jonas lettings expert Lisa Simon on the subject: “The new rolling nature of tenancies may increase the risk of summer voids or extensive churn until term time resumes in some student lets.

“This could, in some cases, leave student landlords without revenue for several months, and could lead to upward pressure on rents as landlords factor in the void period.

“While the Renters’ Rights Act intends to bring flexibility, examples like this one highlight the importance of certainty and predictability to the market, particularly around income and occupancy, Fundamentally, the new regime will be judged and tested on how effectively it can deliver that.”

Also, warnings about the state of the Tribunal system to cope with the predicted rise in rent increase appeals is also looming and worries are becoming increasingly shrill, and not just from letting agents.

Kate Butler, Assistant Director at BTR lobbying group Real Estate:UK said this week that “with the Renters’ Rights Act and Section 21 abolition now in effect, and given serious concerns as to the stability of the market, many would expect that the Government would have, and be able to share, a basic understanding of the impacts of the Act on the judicial system and its detailed plans to mitigate these.

New evidence

“Yet here we have new evidence which clearly demonstrates a clear and deeply concerning lack of consistent collection of rent appeal data within the Tribunal process, and evidence that 80% of current recorded appeals take over 10 weeks to decide.

“Expanding the use of the s13 process to all tenancies will dramatically increase the number of appeals the Tribunal hears, and there is no evidence to suggest that it will be able to effectively deal with this, or that the Government will be able to undertake its commitment to measure ‘overwhelm’.

“This not only undermines the attractiveness of the PRS for new investors, but it will negatively impact existing landlords and incentivise their exit.”

As Pennycook was told during the Act’s progress through parliament (but blithely dismissed) the unintended consequences of this legislation are coming home to roost, like them or not.