The Renters’ Rights Bill marks a pivotal moment in the evolution of England’s private rented sector. Building on the previous Government’s Renters (Reform) Bill, this new legislation proposes sweeping changes to tenancy law – changes that will affect tenants, landlords, and investors alike.

At its core, the Bill aims to enhance security, safety, and fairness for renters. These goals are laudable, particularly in light of recent data showing that tenants in England now spend an average of 36% of their income on rent, well above recognised affordability thresholds.

However, the Government appears to have overlooked key lessons from the rollout of the Building Safety Act, especially around regulatory uncertainty, compliance burdens, and unintended market disruption. Without corresponding supply-side incentives, the Bill risks undermining its own objectives.

Rent Reviews: Now A Structural Risk for BTR?

While the Bill primarily targets traditional buy-to-let and HMO landlords, institutional investors and Build-to-Rent (BTR) operators should take note.

One of the most consequential proposals for the BTR sector is the new rent review mechanism. Under the proposed framework of the Bill, rent increases may only occur annually and must follow a statutory process. If challenged, the increase has to be adjudicated by a tribunal, and crucially, the new rent applies only from the date of the ruling, not retroactively.

This delay introduces a structural risk for institutional investors. Predictable yield growth is essential for modelling asset values and future income. The inability to backdate rent reviews will result in lost income and freeze existing rents during the challenge period. The impact of this is likely to be significant, as the tribunals will inevitably suffer increased backlogs as the volume of rent review challenges increases.

Operators will also face increased administrative costs, requiring additional personnel to manage rent reviews, respond to challenges, and navigate tribunal proceedings. This combination of income volatility and operational drag could jeopardise the economic viability of many BTR projects.

As housing policy again appears to favour demand-side interventions, the importance of meaningful supply-side solutions to incentivise the private sector to deliver the new homes Britain urgently needs is becoming ever more critical.

Learning from the Building Safety Act

It is hard to ignore the striking parallels with the introduction of the Building Safety Act. Again, vital legislation (introducing the Gateway regimes for higher-risk buildings), but implemented through an under-resourced and overworked public body. The result: uncertainty, inflated costs, and reduced investor confidence.

The Renters’ Rights Bill risks repeating this pattern, further exacerbating the supply-side challenges faced by the UK housing market.

Decent Homes Standard: A Missed Opportunity?

Discouraging institutional investment in the rental sector would be a strategic misstep – especially given the Government’s ambition to halve the number of ‘non-decent’ rented homes by 2030.

Achieving this goal requires capital deployment at scale. The Decent Homes Standard introduces new expectations around safety, repair, and energy efficiency. Fortunately, BTR properties are typically built to high specifications and professionally managed, already meeting or exceeding many of these standards.

In this context, the reforms reinforce the BTR value proposition: consistent, compliant, and tenant-focused housing.

Meanwhile, smaller landlords are exiting the market. Rightmove data shows that 15% of homes listed for sale in 2024 were previously rental properties – a figure that continues to rise amid tax hikes, compliance costs, and legislative uncertainty.

Rather than risk burdening professional operators and deterring institutional investment, the Government should enable the BTR sector to innovate, lead supply-side solutions, and deliver the robust compliance demanded by institutional capital.

Instead, the pressure on institutional investors and professional operators is intensifying. Even as demand for high-quality rental housing continues to rise, operational drag and regulatory uncertainty could end up increasing market volatility. As a recent report from Cushman & Wakefield showed, similar policies in Ireland and the Netherlands triggered instability and investor retreat.

PBSA Exemption: A Case for Parity

Purpose-Built Student Accommodation (PBSA) has been granted an exemption from the Bill’s tenancy reforms, provided operators adhere to a government-approved code of practice. This allows PBSA providers to retain fixed-term contracts and avoid the rent review constraints imposed on BTR.

The exemption gives PBSA a strategic advantage – greater operational efficiency and financial predictability. Institutional capital is likely to follow.

In contrast, BTR operators face increasing complexity. The disparity raises a fundamental question: why hasn’t a similar exemption been considered for institutional BTR, given its professional management and alignment with the Government’s housing goals?

Policy Clarity

Unlocking the full potential of the BTR sector will require direct Government engagement with institutional investors, who are best positioned to deliver the volume of high-quality, compliant rental housing demanded by the market and Government policy.

If the Government can strike the right balance between raising standards and maintaining supply, the Renters’ Rights Bill could be a positive turning point for the market. It has the potential to professionalise the sector, attract long-term capital, and deliver the housing Britain truly needs.

BTR operators who invest in tenant experience and sustainability will see the value of their ESG-aligned, professionally managed stock rise in tandem with regulatory standards.

But this outcome depends on policy clarity. The rental sector deserves fair, evidence-based policy – not measures driven by political optics. So far, the signs are not encouraging.