Good afternoon from New Economy Brief.
Last week was historic for the 12 million people who call England’s private rented sector home. The Renters’ Rights Act became law upon Royal Assent on Monday 27th October and is the biggest reform to the regulations governing renting in a generation.
The government claims that these changes, which come after years of campaigning from tenants’ rights organisations, charities and think tanks, will “ level decisively the playing field between landlord and tenant and transform the experience of private renting”. This week we’re taking a closer look at the Act and whether it lives up to the government’s billing.
The reality of unreformed renting
The passage of the Renters’ Rights Act, and the years of campaigning that preceded it, showed the reality of renting for many of the one in five people in England who live in the private rented sector (PRS): poor-quality homes, spiralling rents and the ever-present risk of eviction.
Sword of Damocles The 1988 Housing Act has defined renters’ experience since the Thatcher era, most notably by introducing ‘Section 21’ no-fault evictions, which meant landlords could force a tenant to leave their home with just two months' notice through no fault of their own. Its removal is the centrepiece of the new Act. Over 32,000 households in England were served with a no-fault eviction last year, and with no mechanism to challenge their notices, 6,640 risked homelessness as a result. Even for those who were not evicted or threatened with eviction, the knowledge that a notice could be issued at any time deterred tenants from complaining about conditions in their homes or landlord behaviour.
English housing’s poor (quality) relation. Renters have a lot to complain about. One in five privately rented homes is “non-decent” (i.e. it does not meet the official standards required of social housing): a far higher proportion than homes of owner occupiers or social tenants. One in eight of these contains a “Category 1” hazard, one that poses “a serious and immediate risk to a person's health and safety”. Most (57%) of private renters live in an energy-inefficient home, meaning higher energy bills.
Cost of rent through the roof. Far from being a cheap alternative to home ownership, being a renter is costly. Average UK monthly private rents increased by 7.7% in the 12 months to March 2025, far outstripping inflation. After more than a decade of such increases, tenants in England spend over 36% of their income on rent – above the 30% threshold to be considered affordable – while in London that rises to 41%. For those on lower incomes, it soars to two thirds.
Levelling the playing field
Successive governments promised action. A white paper was produced under Theresa May; abolishing Section 21 was part of the Conservative 2019 manifesto; and the last government brought its own legislation, the Renters (Reform) Bill, forward in 2023. Amid vocal opposition from landlord groups and landlord-aligned backbenchers, multiple amendments designed to water down renter protections received sufficient support to delay the Bill’s passage. Rental reform remained unresolved when the 2024 general election was called.
Take two. Labour, the Conservatives, the Liberal Democrats and the Greens committed to abolishing Section 21 last summer, and the Labour government introduced the Renters’ Rights Bill in September 2024. The Act that received Royal Assent last week finally delivered this.
The end of no-fault evictions. The new legislation means landlords may only evict their tenants for a legitimate reason. This could be to move themselves or a family member into the property, to sell it or as a result of tenant rent arrears or anti-social behaviour. As well as needing to provide a ‘provable’ reason for eviction, landlords must now give tenants four months to find a new home – double the notice period under Section 21. Overall this means renters are much more secure in their tenancies than before.
No hard stop. The Act also puts a stop to fixed-term tenancies, replacing them with rolling contracts. Instead of the ticking clock of a year-long agreement, the home is yours until you wish to leave, unless the landlord has a legitimate reason as outlined above.
War no more. Infamous rental ‘bidding wars’, where prospective tenants were told to bid significantly above the asking price or supply several months’ rent in advance in order to secure a home, have also been outlawed.
Proper oversight. The opaque nature of the renting process meant that many tenants had no access to basic details about their homes and landlords. Rectifying this has long been a priority for campaigners, who have pushed for a national register for landlords for many years. The new legislation goes some way to addressing this – but it falls short of the demands of the Renters' Reform Coalition (a group of 19 organisations representing private tenants).
Pets welcome. By requiring landlords to accept requests for pets in homes in all “reasonable” circumstances, the Act means tenants with pets are also now much more able to move home or adopt an animal.
Decent homes…in a decade? The government will extend the Decent Homes Standard (currently used for social housing) to privately rented homes. However, in its consultation, the government proposed deadlines of 2035 or 2037 to implement it, which would expose renters to the poor standards that have so long defined the sector for another decade.
Where next for private renters?
The elephant not even in the room. While the new act directly addresses the problems of insecure tenure and bad homes (albeit slowly in the latter case), it does very little to bring rents down. The government says direct measures to counter the affordability crisis in the PRS are off the table.
Uncontrolled rents. In particular, it has rejected proposals for rent controls or caps of any kind, including the Renters’ Reform Coalition’s calls for in-tenancy rent increases to be limited to whichever is lowest of wage growth or inflation. As have the requests from the Mayor of London for devolved powers to cap rents in the capital. It remains to be seen whether these measures will return to the table if rents keep soaring.
Build baby build? When pushed on the lack of measures in the Act to address affordability in the PRS, the government points instead to its plans to increase housing supply. It aims to build 1.5 million homes this parliament, but there are concerns that it’s already off track and too reliant on private developers to meet its targets. In the past, such rates of housebuilding have only been achieved with significantly more construction of social housing. And while more homes are needed to help tackle the housing crisis, Professor Josh Ryan-Collins argues that to address unaffordable house prices and rents “we must make the existing as well as new housing stock more accessible for those most in need by reducing speculative investment”.
Are we at peak renting? Landlord groups have denounced these changes, claiming that further regulation will drive landlords out of the market and reduce supply of homes to rent. But might a rebalancing of the housing market – with more people owning or living in social housing – be part of the plan? The government's own data found that the PRS doubled between 2000 and 2016, reaching an abnormal size by historic British standards. Generation Rent also found that the relative size of the PRS is not an important factor in rental affordability – it can shrink without rents going up.
For those ‘left behind’ in rented homes, this legislation will make them more secure and will in theory improve the standards of their homes in years to come. But without tangible action on affordability, tenants will still feel the squeeze of sky-high rents – and amid an ongoing cost of living crisis, this is what the government is ultimately most likely to be judged on.
An open door for tax rises? Polling by Persuasion, assisted by IPPR, has found that while backing for tax rises across the board at next month's budget is limited, there is more support for taxing the wealthier before taxes on working people are raised. Crucially, the public do not trust the government to spend any raised money effectively, and only support rises “for a purpose.”
Global tax justice. In advance of the Nairobi session of the UN tax convention negotiations, Tax Justice Network has a dedicated webpage tracking country positions. TJN has also launched State of Tax Justice 2025, highlighting the threat of the US’s global gag order on governments reporting which companies are moving profits out of the countries of origin and into tax havens. They have found that US multinational corporations are now shifting “twice as much profit out of the countries where they operate in and into the US, but are paying even less tax in the US than they were before Trump’s tax cuts were introduced” and that these companies are responsible for “29 per cent of all corporate tax losses suffered yearly by all countries”.
Looking beyond the market. To address “two era-defining challenges: climate and environmental breakdown requiring rapid decarbonization, and the growing unaffordability of life’s essentials”, Common Wealth has launched the Green Planning Commission to address what they understand to be the root problem: the failure of market coordination to meet these crises. They cite both the Inflation Reduction Act (IRA) in the US, and the UK’s Clean Power 2030 plan and target of net zero by 2050 as examples of market-led proposals falling short on both counts.
Climate economy gamechanger Meanwhile, ECIU has found that the Paris Climate Agreement has been "transformative" for the economy in the decade since it was adopted. It hasn’t only reduced forecast global heating by 2100 from 4°C to 2.6°C. It has also brought about a surge in green jobs, with clean energy jobs now outnumbering their fossil fuel equivalents globally.
Geopolitics of AI. In a video explainer from The Autonomy Institute, Nick Srnicek, author of 'Silicon Empires' discusses the geopolitics of AI and the influence that the Silicon Valley bosses and corporations world over global affairs.
