Renters' Rights Bill announced

The new Labour government announced a Renters' Rights Bill in the King's Speech in July 2024, establishing regulation of the private rented sector (PRS) as an early priority¹. The announcement followed the previous government's failure to pass its long-promised Renters (Reform) Bill, which had already had its headline measure, the ending of "no fault" evictions, removed following objections from Conservative backbenchers and landlords¹.

The Joseph Rowntree Foundation (JRF), in a briefing published on 11 September 2024, said the PRS had become the "tenure of last resort" for many households as house price growth worsened affordability for first-time buyers and the social rented sector shrank¹. It reported that the PRS is now home to 22% of households with dependent children in England, up from 9% in 2003/04¹. JRF also found that the Assured Shorthold Tenancy agreement most private renters sign allows landlords to terminate the tenancy almost at will, which it said makes renters reluctant to complain about poor conditions or resist rent rises¹.

JRF's briefing set out affordability figures for private renters. It said the English Housing Survey shows private renters spend 33% of their household income on rents on average, while data from Dataloft, based on actual tenancies and published by the Office for National Statistics, puts the figure around 27% for a similar time frame¹. It said this compares with the 22% or so now being spent on mortgage repayments by recent first-time buyers¹. By household type, JRF reported that private rented households headed by someone in full-time employment, two-thirds of all private rented households, spent 25% of their income on rent, those headed by someone in part-time work spent on average 39%, and those in full-time education spent over 80%¹.

On low-income renters, JRF said the proportion of privately renting households in the bottom 40% of gross incomes was 41% across England, ranging from 24% in London to 60% in North West England¹. It said 88% of all private renters in the capital were paying more than 30% of their income on rent, so that 21% of London households in the PRS were both on the lowest incomes and experiencing stretched affordability, while 34% of households renting privately in Manchester had both low incomes and stretched rental affordability¹. JRF's cost of living survey found that 89% of privately renting households in England who are also in the bottom two income quintiles are spending more than 30% of net income on rent¹.

On government support, JRF said the previous government raised Local Housing Allowance (LHA) rates in April 2024 compared with the April 2020 levels at which they had been frozen, but that the new rates were based on rents in the 12 months up to September 2023¹. JRF's analysis of local reference rents from September 2023 to April 2024 showed most markets had seen significant further rental growth since then, creating a new disconnect between rents and support¹. It also noted that the previous government's Household Support Fund is due to end in September 2024¹.

Why it matters for households

The Bill as announced would bring regulation of the private rented sector into scope as an early priority for the new government¹. For renters, the practical questions are what the legislation ends up containing and when it takes effect; JRF said it is essential that Section 21 "no fault" evictions are banned and that renters are empowered to raise concerns about standards without fear of eviction¹. The briefing does not set out the Bill's detailed provisions, and those have not been reported here.

On money, the affordability figures describe how much of household income goes on rent for different groups, and the LHA point concerns the gap between the support paid to low-income renters and market rents. JRF said that without action to keep LHA rates pegged to market rents, the gap between the rents landlords charge and what low-income households can pay is likely to continue to grow rapidly¹. The Household Support Fund's scheduled end in September 2024 is also a dated change affecting households receiving that support¹.

What happens next

The Bill was announced in the King's Speech in July 2024¹. JRF's briefing, published on 11 September 2024, calls for the planned Renters' Rights Bill to be passed at the earliest opportunity¹. The previous government's Household Support Fund is due to end in September 2024¹. No further timetable for the Bill's passage is set out in the briefing.