Renters’ Rights Bill: A Scottish Case Study Offers Optimism

As the UK prepares for the Renters’ Rights Bill to gain Royal Assent, a new study suggests that its impact on the rental market may not be as negative as some landlords and agents fear. The analysis, conducted by property software firm SME Professional, looked at the effects of a similar law passed in Scotland in 2016, which also abolished no-fault evictions and ended fixed-term tenancies.

The Scottish Experience

The study found that, far from harming the industry, the changes in Scotland actually boosted business for letting agents.

• Increased Demand for Professional Services: The report highlights a surge in demand from Scottish landlords for professional management services, as the new, more complex regulations made them more reliant on expert guidance.
• Growing Portfolios: The Chief Executive of the Scottish Association of Landlords (SAL), John Blackwood, noted that the increased legislative burden had not led to a reduction in managed properties. Instead, agencies have seen a slight increase in their portfolios, indicating that landlords are choosing to hand over management to professionals.
• Stable and Professional Market: The study concluded that fears of market contraction had not materialized. Instead, the Scottish private rented sector expanded, tenancy lengths increased, and landlord satisfaction remained high.

What This Means for England

With the Renters’ Rights Bill expected to become law in September, the findings from Scotland offer a reassuring outlook for letting agents in England. The bill, which includes the abolition of Section 21 “no-fault” evictions, the creation of a new ombudsman scheme, and the requirement for landlords to join a redress scheme, is likely to lead to similar outcomes. As regulations become more complex, “Let Only” services may become less viable, prompting more landlords to opt for fully managed services, thereby creating new revenue streams for agents.

This presents a clear opportunity for letting agents to position themselves as essential partners for landlords navigating the new landscape, providing peace of mind and professional expertise in an increasingly regulated market.