Labour’s new renters’ rights act hailed as landmark – but experts warn of short-term pain for tenants
Renters could face higher costs and fewer available homes in the short term – despite the government hailing its new Renters’ Rights Act as a milestone in improving tenant protections and professionalising the private rental market.
The legislation, which has now received Royal Assent, makes it harder for landlords to evict tenants without cause and limits their ability to impose steep rent increases.
Ministers argue it will raise standards and shift the sector towards larger, regulated landlords rather than small-scale “amateur” property owners.
But the transition is already having unintended consequences. Many small landlords have been selling off their properties in anticipation of tighter rules, shrinking the number of available rental homes.
Economists and housing campaigners warn the effect will hit renters hardest before the benefits are felt. While the policy is expected to improve security and fairness in the long run, the exodus of landlords has contributed to a surge in rents and reduced supply across many parts of the UK.
Landlords exit, buyers benefit
Specialist lenders and estate agents have reported a sharp rise in rental homes being sold, often to first-time buyers. The trend, while positive for homeownership, means fewer bedrooms are available for rent.
“Every flat sold to an owner-occupier is one fewer home for tenants,” said one property analyst.
“The government’s reforms make sense in principle, but the short-term squeeze will be painful.”
The issue has also created complications for so-called “accidental landlords”, individuals who rent out a single property due to a temporary relocation or family circumstances. Under the new regime, they must now comply with stricter licensing and management requirements, similar to professional operators.
Labour’s long game
Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves have defended the reforms as essential to creating a fairer and more stable rental system.
“No one should live in fear of unfair eviction or exploitative rent hikes,” a Downing Street spokesperson said.
Officials believe the market will stabilise as large-scale “build-to-rent” developments expand, offsetting the decline in smaller private landlords.
However, housing campaigners say the government must act quickly to prevent the current disruption from worsening.
“Tenants can’t wait years for the benefits to arrive,” said one renters’ group.
“Without urgent action to increase affordable supply, the promise of reform risks being overshadowed by the pain of transition.”
For now, Labour’s flagship housing reform represents both a moral victory and an economic challenge, one that may test its political resilience long before renters feel the promised relief.
