'Reeves' rent plans could backfire' - SHB property expert

Plans to freeze rents could backfire, costing both landlords and tenants, according to a property law expert based in the Yorkshire Dales. 

Last week, chancellor Rachel Reeves was revealed to be considering imposing a one-year rent freeze on private sector landlords as part of a package of measures to help households deal with the fallout from the conflict in the Middle East.

The measures, outlined in an exclusive in The Guardian, have since been criticised by members of her own party, and a Downing Street spokesperson has indicated that the plans are not on Prime Minister Sir Keir Starmer’s agenda. 

Alastair Birtles, Scotts Hall & Birtles

Alastair Birtles, solicitor and director at Scotts Hall & Birtles, which has offices in Leyburn, Hawes and Richmond, North Yorkshire, said the plans would be a further blow to landlords following the introduction of the Renters’ Rights Act on May 1st.

The Renters’ Rights Act aims to improve security and stability for tenants through various measures including the abolition of the ‘no-fault’ eviction and limitation on rent increases. 

Mr Birtles said: “A freeze clearly affects the income to a landlord in a difficult climate where they are already facing higher mortgage costs, energy efficiency upgrade and maintenance expenses, and inflation.  

“Couple this with the Renters' Rights Act coming into force, a freeze could cause many landlords to look to sell their properties and leave the rental market.”

But Mr Birtles said it was not only landlords that could end up out of pocket - tenants could ultimately be hit too. 

He said: “This would only benefit tenants from stable rent payments for 12 months, avoiding immediate rent increases. However, as the landlords’ rental income is squeezed, they may invest less in property upkeep, leading to lower standards of living.

“If the fear and financial pressures on landlords, and the additional securities that tenants have acquired under the new Renters’ Rights Act, results in landlords leaving the rental market, there will be less rental properties in the market.

“As the Renters’ Rights Act only allows for one annual increase to the rent, once the freeze is lifted, landlords may decide to impose a sharper rent increase to make up for lost time.”

To speak to the team at Scotts Hall & Birtles about property matters, or any other legal assistance you require, contact us online or call 01969 622227.